Physical Capital

This article synthesizes research on K-12 school capital spending — how much is spent, who pays for it, and what it actually accomplishes. It shows that spending remains highly uneven across and within states (with local districts financing over 75% of capital costs, primarily through voter-approved bonds), and that the historical gap favoring wealthier districts has narrowed since the Great Recession but hasn’t disappeared. It also documents a persistent national investment gap, noting that more than half of districts still need major repairs despite substantial spending.

The most actionable finding for planning and prioritization purposes is that not all capital projects generate the same returns. Investments that improve the instructional environment — HVAC replacement, added classroom space, pollutant removal — show the strongest links to improved student test scores, while spending on athletic facilities, transportation, and land purchases shows limited academic impact but larger effects on surrounding housing prices. The research also finds that capital investment effects on both test scores and housing values are consistently larger when directed toward students facing socioeconomic disadvantage, suggesting that facility spending is currently below the level that would be most efficient in lower-income districts. The article flags several open questions, including exactly why building improvements affect academic outcomes, how policies should be designed to improve the efficiency of school capital investments, and why the project types that raise test scores aren’t always the ones homeowners value.