Charter schools, once seen as a laboratory to explore new methods of pedagogy, have become a gateway for the privatization of education. While some charters are driven by social or political forces, the growth of the sector has also been driven by profit, with investors more interested in the balance sheet than the report card. This has been especially true with the variety of arrangements and schemes related to real estate, where investors have taken advantage of loose oversight and regulation to build hefty portfolios for themselves.

Real Estate and Charter Schools, a new brief from In the Public Interest, takes a look at the growth of the industry surrounding charter schools, and how investors convert public funds into private profit.

From the introduction:

In the 1990s, some people viewed charter schools as a way to experiment with teacher-led and/or non-traditional educational strategies. But others saw charter schooling as an initial step towards opening the nation’s largest public institution to free market forces. In many—if not most—states that allow the private ownership and operation of “chartered” schools, policymaking has been dominated by those who subscribe to this free market agenda.

Newly created businesses now offer every imaginable service or product to charter schools, including staffing, transportation, food services, curriculum, and more. As charter schools purchase from these entities, public dollars provided to schools are diverted to private, for-profit businesses and entrepreneurs. And because many state legislatures have exempted charter schools from regulations and oversight designed to guard against profiteering, the charter school marketplace is thriving.

One of the largest opportunities for profit is in real estate. The purchase, development, and financing of facilities for charter schools has become a lucrative industry, buoyed by public financing and the preferential credit lines and interest rates that come from the semi-public status of charter schools.

Today, while public messaging may tout the alleged popularity of charter schools and supposedly long waiting lists for charter seats, many believe that the profitability of the market—not parent demand—is driving charter school growth.

Read the full brief Real Estate and Public Schools.