This article examines the implications of competition between school districts in a mid-Michigan metropolitan area. Over the 10-year period after Michigan's major school-funding reform in 1994, many urban and suburban districts found themselves competing for per-pupil state funding. Suburban districts need extra students to make up budgetary shortfalls and protect instructional programs that are essential in today's political climate of school accountability. Several districts in this study built new or substantially renovated state-of-the-art high schools, possibly illustrating a space race between the districts to build bigger, better, newer capital assets that attract pupils and residential development. The central city district, surrounded by growing suburbs with higher-value taxable property, is at a disadvantage in this competition. (Contains 4 figures, 6 notes and 3 tables.)