One of my closest friends in middle school lived so close to school (and was so low-maintenance) that he would use the first period warning bell (3 minutes before class started) as his alarm clock. Since I had to walk a whole 12 minutes myself, I hated him for that.
Our kids don't live that close but 2 city blocks is hard to beat. And, obviously, even more important than the proximity of the school is its quality: it is far and away the city's best public K-8 school. It's also incredibly diverse, in terms of race/ethnicity and income level, which is important to us.
In other words, we lucked into a great situation in terms of quality, convenience, and diversity. Especially when you consider that we bought our house before the school existed and therefore before house prices ran up in response to access to this great neighborhood amenity.
Of course, the school isn't perfect. But neither are schools near where I grew up, even though their high quality is an important determinant in driving prices to stratospheric levels. (I had to tell my dad, who was surprised at a $1.6 million listing in the neighborhood, that in fact that was a steal since other comparable houses were going for $2.5 million. These are not typos.)
It seems that, as with many things, with schools you can have close, cheap, or good, but usually not two out of three and definitely not three out of three. Unless you're us.