It’s no secret that medical and recreational marijuana have a striking amount consumer benefits, but here’s a surprising benefit you might not be aware of — increased home values! A recent study published in the academic journal Real Estate Economics concluded that homes within 0.1 miles of Denver’s 103 marijuana dispensaries saw increased home valuations by up to 8.4%. Based on average housing prices in those areas, the value was estimated to be $27,000 for a typical, single-family home.
Conducted by researchers from the University of Wisconsin, the University of Georgia, and California State University, these claims are based on real estate appreciation since January 1, 2014, when recreational marijuana became legal in Colorado.
What This Means For State Governments
Researchers and politicians from states that have enacted or are looking to pass marijuana legalization bills are now looking to factual, statistical evidence from cities like Denver on the benefits of having a local dispensary. For example, local San Francisco lawmakers have been making great strides to keep marijuana retailers in already zoned locations, despite the plea of the city’s Chamber of Commerce to do just the opposite.
Moussa Diop, a leading researcher of the study states, “The presence of retail marijuana establishments clearly had a short-term positive impact on nearby properties in Denver. This suggests that in addition to the sales and business taxes generated from the retail marijuana industry, municipalities may experience an increase in property taxes.”
Others suggest that it’s not only the prospect of growing and legally using marijuana that is causing the increased demand for housing but the job prospects associated in those legalized states.
“The legalization affects both the demand and the supply in the residential housing market,” says economics professor Cheng Cheng, an author on the study. “Areas where it’s legal are “going to attract more home buyers, including marijuana users as well as entrepreneurs and job seekers.”
What This Means for Politicians
Many of our current lawmakers (and some real estate investors with serious cash) have feigned concern over whether marijuana dispensaries will damage local property values. But, with these long-term, factual based statistics proving just the opposite, politicians and lobbyists alike have the opportunity to spin what constituents are already asking for into a positive for them — “I’m pushing for legalization because it’s good for my community.”
If you live close to a legal dispensary and have seen first hand the increase of your home valuation, we’d love to hear from you!