To Add a Property to Your Zeemaps Map



Home (and School) Buying Simulation Name __________________

Ed 308: Cities, Suburbs & Schools by Jack Dougherty and Rachael Barlow, Fall 2011

Objective:

Given a demographic profile of a Hartford family, how would you obtain information and make decisions about buying versus renting in the city or surrounding suburbs, and the type of school your child would attend?

This simplified role-playing scenario is designed to simulate the experience of buying a home (and therefore buying access into certain public schools), and to deepen our understanding of the relationship between housing policy and educational policy in the United States.

Questions you will face in this simulation:

1) Based on your family economic profile, can you afford to buy a home in the suburbs? Specifically, how much of a home mortgage can you afford? If not, how much rent is affordable?

2) In which towns and neighborhoods does your income allow you to buy or rent?

3) Given your housing options, what types of schools can your children attend?

4) If you moved to a suburban residence, what additional challenges might you face?

5) If you buy a home, how much will the purchase actually cost (compared to your estimate)?

6) Who wins and who loses under current US housing policies and practices?

Random Assignment of Family Economic Profiles

Each team consists of a family with the following scenario:

-- the parent(s) currently work and rent an apartment (or live with relatives) in Hartford

-- each family has two children (grades 3 & 6), currently in Hartford Public Schools

-- you have heard that “life will be better if you move to the suburbs”

|Family profile |Annual Gross |Monthly Gross |Savings (for down |Own a car? |Monthly debt payments |

| |Income |Income |payment) | | |

|1 |$ 24,000 | |$ 5,000 |No |none |

|2 |$ 30,000 | |$ 2,000 |No |none |

|3 |$ 30,000 | |$ 5,000 |Yes |$ 100 car payment |

|4 |$ 30,000 | |$ 5,000 |Yes |$ 200 student loan |

|5 |$ 42,000 | |$ 2,000 |No |none |

|6 |$ 42,000 | |$ 5,000 |Yes |$ 200 car payment |

|7 |$ 42,000 | |$10,000 |Yes |$ 200 car + $200 student |

|8 |$ 54,000 | |$ 2,000 |No |none |

|9 |$ 54,000 | |$ 5,000 |Yes |$ 200 car payment |

|10 |$ 54,000 | |$10,000 |Yes |$ 200 car + $200 student |

|11 |$ 66,000 | |$ 5,000 |Yes |$ 500 student loan |

|12 |$ 66,000 | |$10,000 |Yes |$ 200 car +500 student loan |

Note: See current median family income for Hartford data at

Step 1: Can you afford to buy a home? How much of a mortgage can you afford?

Use an internet mortgage site to find the current rate for a conventional 30-year fixed mortgage

For example, go to: Current rate __________

Use an internet mortgage affordability calculator to estimate the purchase price of a home you can afford, based on lenders’ income and debt guidelines for a conventional 30-year mortgage at the current interest rate (see above). For example, go to this CNN Money affordability calculator:



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Write your answers in the boxes above. For additional reading, see US Department of Housing and Urban Development (HUD) “Buying a Home” website:

Also, calculate your rent affordability as 33% of your monthly gross income: ____________

Step 2: After you have identified your affordable price range for buying and renting, start hunting on the internet or newspapers for actual residences in suburban towns. Remember that the space must house parent(s) plus two children (meaning 2 bedrooms minimum, 3 ideal).

Residences for sale that you can afford:

|Town |Address |Purchase price (asking) |

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Rental homes or apartments that you can afford:

|Town |Address |Rental price (monthly) |

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Step 3: Mortgage payments and Amortization schedule

Select a home for sale for which a conventional 30-year mortgage would be affordable for you.

Use an amortization calculator on the internet to calculate the following info:



a) What will be the estimated total of your monthly house payment? __________________

Note: This calculator shows principal + interest only. A more accurate estimate also would include property taxes and insurance.

b) Click on the “Show Amortization Table” button. How much interest would you pay the lender during the first year (12 months) of your mortgage? _____________________

c) What would be the total interest paid during the 30-year life of your mortgage? _________________

d) Compare the total interest paid over 30 years to the actual cost of the home (the principal). How much more interest would you pay than principal? ___________________

Step 4: Buying a Home means Buying Access to a Public School

Look back at all of your options for buying or renting that you identified in step 2.

Given your housing options, what types of schools can your child attend?

Select 4 different school districts where you can afford to live, and using all of the resources available to you, describe what you know about the “quality” of education there.

|District |Info about Quality of Ed |Source |

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