Effect of school in valuing real estate.

http://www.nytimes.com/2010/07/13/nyregion/13appraisal.html?src=mv When Ann and Jonathan Binstock started shopping for an apartment in Manhattan in 2007, their first call was not to a real estate broker. Instead, they hired an educational consultant, to show them the best schools for their daughter, Ellen. After the consultant suggested the most desirable zones, they chose a two-bedroom apartment... [more]

http://www.nytimes.com/2010/07/13/nyregion/13appraisal.html?src=mv When Ann and Jonathan Binstock started shopping for an apartment in Manhattan in 2007, their first call was not to a real estate broker. Instead, they hired an educational consultant, to show them the best schools for their daughter, Ellen. After the consultant suggested the most desirable zones, they chose a two-bedroom apartment near Public School 87 on the Upper West Side that public records show cost $1.975 million. It was a stretch financially,” Ms. Binstock said. “We ended up buying the apartment that we live in now based on the schools. All of our money is in our little two-bedroom apartment.” Now Ellen is entering second grade, and the Binstocks are finding that plenty of other parents shared their real estate strategy: P.S. 87 has become so overcrowded with students that, in first grade, Ellen had no gym class, and her lunch started before 11 a.m. It has a waiting list. The Binstocks heard that a neighboring school, P.S. 199, was also in bad shape, with its own list of those waiting to get in. Families like the Binstocks helped raise the tide of New York real estate prices in recent years by bypassing the suburbs and, instead, paying premiums for apartments near high-performing public schools in places like TriBeCa and the Upper West Side in Manhattan, and Park Slope in Brooklyn. Developers, in turn, built costly family-sized apartments near the same schools, knowing they would draw parents hoping to avoid the cost of a private education. All of these issues are wrapped up in a struggle on the Upper West Side between parents like the Binstocks who want more classrooms — many more — and the developer of a new project who is offering to build a school that some feel is not big enough. The issue — and the emotional and financial repercussions that go with it — resonates with families across the city. The parents are pushing Extell Development, which is in the process of getting approval for its Riverside Center Development, to build an even larger school than the one that was promised. The local community board plans to vote on this project, which includes the push for the larger school, on July 22. While the school may not even be completed for six to eight years, parents want it to accommodate the young families they expect to move to the neighborhood over that time. They argue that a developer who profits financially from selling apartments to families who live there for the schools should chip in more. “This overcrowding has been caused to a fair extent by overbuilding,” said Noah E. Gotbaum, president of District 3’s Community Education Council, which approves zoning lines for West Side schools including the proposed Riverside Center school. “This school has got to be big. It’s got to be paid for by the developer and it’s got to be among the first buildings built.” Extell Development has already offered to construct a 75,000-square-foot school for 480 students for children in kindergarten through eighth grade, according to a May 3 letter between Extell and the School Construction Authority. The developer will pay to build the “core and shell” of the school, which is standard; the interiors and classroom are paid for by the School Construction Authority. Gary Barnett, Extell’s president, agreed that schools have become a “very important consideration citywide” and that city-dwelling families value schools “almost like the suburbs.” But he said that the School Construction Authority is “where we take our direction from.” [less]