Study Now Finds Marijuana Legalization Decreases Property Value
Marijuana legalization is taking place in the United States. Naysayers have predicted that the movement is a true apocalyptic moment on its heels, shouting about how ending the marijuana ban would increase crime and low consumption rates, and contribute to the general decline of civil society. The only thing most of these people have proven is that they are not a nostradamus.
The legalization of marijuana works for the most part and has not resulted in a drastic revolt of fear and repression. However, when this advance has shrunk, it appears to be lowering property values in neighborhoods where pharmacies are open.
A recent study in the journal Regional science and urban economics noted that Washington State, one of the first jurisdictions to be legalized for recreational use, saw a decline in property values in districts with cannabis dispensaries. The researchers found a 3-4% decrease in property values in homes 0.36 miles from retail stores. Although the study focused specifically on Washington State, it does offer some insight into what to expect as legalization spreads across the country.
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The crime potential is why real estate values take a hit. Although the study’s authors found no evidence of increased criminal activity due to the legalization of marijuana, they found more crime in places where pot was sold. “While we find no evidence of an overall increase in crime in Seattle, WA, there is a significant increase in harassment-related crime in census areas with marijuana dispensaries compared to other Seattle census areas.” they write.
The latest study contradicts previous research showing how property values increase as legalization begins. In 2017, the University of Wisconsin found that real estate values in parts of Denver, Colorado were up around 8% (about $ 6,000 more) within a mile of a pot pharmacy.
“Our results show that retail property conversion has a large positive impact on neighboring property values after property attributes and neighborhood features are controlled.” Researchers wrote.
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Two years later, a study by Clever Real Estate also found that property values in constitutional states were worth over USD 6,000 more than in prohibited states. The conclusion was that legal weeds were positive for landowners. “States that legalize recreational cannabis see an immediate spike in home values after legalization, even without retail pharmacies opening up.” The report reads.
Why should property values suddenly plummet in states where weed has been legal for years?
Presumably this is because property values only increased in those parts of the country after legalization, as overall it is attractive to live in an area where marijuana can be bought like beer.
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There’s no denying that there has been a novelty in the legalization of marijuana that has led the Stoner culture to relocate to states where their drug of choice has no legal implications. But now the novelty might wear off as legal weeds are just a way of life in some states. The excitement of buying weeds without the cops jumping out of the bushes and jailing everyone has subsided, and cannabis deals like everyone else are viewed as normal. Additionally, citizens have likely chosen not to live too close to the marijuana scene.
RELATED: Why Investors Take A Closer Look At Cannabis Real Estate Nationwide
Sometimes normal is enough to damage property. A 2016 report from Realtor.com shows that all kinds of typical neighborhood features can decrease the value of a home by several points. Hospitals, shooting ranges, power plants, funeral homes, cemeteries, homeless shelters, strip clubs and poor schools have been blamed for the destruction of property values. Most people don’t want to live alongside gruesome memories of immorality, their own mortality, or the combination of the two.
Other Studies found that liquor stores, drug treatment centers, and even convenience stores are also driving down property values. These operations are often viewed as magnets for crime, making them less attractive if someone is looking in the area to buy a home.
There are a few things that communities with pot pharmacies can do to keep property values from fueling. The main thing is to work together to create an environment that benefits the entire neighborhood. Mowing the lawn, keeping it clean and beautifully landscaped is a good place to start. It also doesn’t hurt to work with local law enforcement agencies to figure out what can be done to provide extra security. Pushing the city into repairs to infrastructure (repairing broken sidewalks and potholes) can also increase property values. Communities need to work together to ensure that everyone’s interests are taken into account. Only then can they begin to balance negative connotations.