Why Aren't There More Private Schools? This is a conversation my dad and I have had any number of times - as he has sat on the board of a number of public and private schools / districts and I have, given frequent moves, oven shopped for schooling for my kids.
The first, perhaps most obvious answer is that there is not that large of a market, because few people can afford to pay two tuitions for their kids (i.e. public school tuition via property taxes and then a separate private school payment). But, I think that that answer is wrong. This country is tremendously wealthy, both on average and at the top end. Most really good private k-12 schools are oversubscribed -- with competitive entry requirements and long waiting lists. We have all heard stories about New York City schools where you have to practically go straight from the act of conception to the admissions office to have a chance to get the kid in.
I have my own experience with this, in many cities, but take Seattle for example. In the east side suburbs, their are 3-5 high quality private elementary schools, and for the most part, they are all way oversubscribed. One of them admits something like 6% of applicants. And charges $10,000+ a year for kindergarten and more for later years.
What other industries are there where 94% of the demand for a $10,000+ product goes unmet by new entrants? And unmet for decades, not just in a short period of mismatched capacity? Just look at iPods - how many people jumped into the market with copycat products when they saw the popularity of this product, and Apple's inability to keep up with demand?
But what really got me thinking about this problem was when I moved back to Phoenix. Despite having my kids in some of the best schools in every city we have lived in, the absolute best is, of all places, here in Phoenix. How do I know it is the best? Well, my son went to kindergarten at this Phoenix school, and then we moved to Seattle for two years. In Seattle, we went to what was supposed to be about the best elementary school on the east side - Gates sent some of his kids here, as did the McCaws, and many other people who could afford any place they wanted. At the end of second grade, the school told me my son could have skipped second grade, which means he could have skipped first grade there too. In two years, he never learned anything more than he learned in one year of kindergarten in Phoenix.
There are two other interesting things about this Phoenix-area private school, beyond just its excellence:
- It is by far the cheapest we have ever attended, less than half what we paid in Seattle and well under the average per-pupil spending in public schools
- It is for profit - not a charity or foundation. It has no donations, government grants, endowments, etc. It runs itself for profit, it is inexpensive, and the education is great.
The school is not perfect -- it has a strong focus on academics, without the big theater programs or art programs or photography classes you might find in a large public school, so we have to supplement that stuff outside of school. But my point is, why aren't there more schools like this? Why aren't people jumping in to fill this market? This is more than of academic interest to me. I am a big supporter of school choice, but to support choice you have to believe that private schools will be created to meet the new demand vouchers would open up.
Thus it is with great interest that I saw this post at Marginal Revolution about the barriers to starting a private school. They link this article from the Reason foundation. The Reason Foundation argues that a lot of micro-regulation, particularly zoning, limits private schools, especially when zoning boards are dominated by people who have an interest in protecting public schools from competition.
In the context of my Seattle story earlier, by the way, note this proposal that came out a while back to actually ban private school (and church) construction in large parts of the county that Seattle is in.
There were several responses to this along the lines of 'so what - everyone has to navigate basic permitting processes'. That may be, but my experience is that zoning is stacked against private schools, even before you consider the proposed total ban on private school construction described in the article I linked above. For example, in the Seattle eastside suburbs, one private school that needed to move to larger quarters was unable to find a site within a 20 mile radius where they were allowed to build a private school. Residential zoned tracks did not want more traffic from a school, and they were not allowed to have a school with little kids in most commercial zoned tracks. The point is that private schools face permitting hurdles that go beyond what most businesses face, and, as I mentioned earlier, most zoning boards are packed with people who have a vested interest in not allowing new private schools to be built anywhere.