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Building on a suggestion by Adam Yarmolinsky that the Federal American government insure the equity that homeowners have developed in their property, we suggest some additional elements which would make a more complete urban policy package. Educational opportunity is seen as a critical element in property value within the American context and any scheme such as Yarmolinsky suggests needs to take into account the fact that “house price” reflects heavily the general judgment of the quality of the school to which that residence has access. Hence, a stabilization of the housing market is heavily dependent upon an equalization of educational opportunity. Two ideas to this end are suggested. One, the “school parity adjustment,” would grant funds directly to the school district, generally in inverse proportion to the assessed property valuation, and consistent with the funding required for a quality education. The second notion, the “urban tax credit” would help to rectify the desirability of suburban locations for parents of school age children by giving them tax credits for living in the city, and in effect, equalizing the subsidy which the government already provides suburban dwellers through insuring the school-inflated value of their property through Mortgage Insurance

Urban policy perspectives in the U.S.A.: An extension of the Yarmolinsky option