A recent report shows that property values increase in areas where dispensaries are located
The numbers don’t lie. Although some individuals have tried to fight against marijuana dispensaries over concerns that they could hurt property values in their vicinity, a recent study shows that the exact opposite is true. In those areas that have marijuana dispensaries, property values are on the rise.
The study was published in the Contemporary Economic Policy journal and explored how new home prices in Denver, CO changed as a result of dispensaries being added to the landscape. The researchers looked at the prices of homes before and after each dispensary opened its doors, considering a radius of 0.25, 0.25-0,5 and 0.5-0.75 miles from the dispensary.
For the properties that were located within 0.25 miles of a new dispensary, home prices had increased an average of 7.7%. Out to 0.5%, the increase was 4.7%, but, outside of that, there was zero increase. The researchers concluded, “Our results suggest that despite potential costs, legalization is capitalized as a net benefit in housing prices.”
The research determined that a dispensary causes about the same effect on real estate values as do new supermarkets. They explained, “If public sentiment surrounding marijuana is positive, homebuyers may also prefer to select into neighborhoods with more dispensaries for convenience. Ultimately, however, our data do not allow us to directly determine the underlying mechanisms driving this result, so these potential explanations should be considered speculative.”
In some instances, the inverse is true, as well. In Amsterdam, a study was conducted that showed that rental prices in the city dropped by 3% for homes that were within 820 feet of a dispensary after the dispensary closed.