Wednesday, March 22, 2023

Marijuana legalization linked to higher home values

TUCSON, Ariz. (KOLD News 13) -It’s been legal for half a year now bringing in tens of millions of dollars in taxes, but the State of Arizona isn’t the only one benefiting from recreational marijuana sales.

A recent study suggests the more green people consume, the more green homeowners pocket.

“Early on, [people] didn’t want to live near dispensaries, [they thought] it was going bring in drugs and maybe crime,” said Dr. Francesca Ortegren. “I do think we have seen the opposite of what people expected.”

Dr. Ortegren is a data scientist with Clever Real Estate. She is studying how recreational marijuana legalization impacts the housing market.

“We did find that areas where marijuana recreationally is legal, home values increased at faster rate than in states where marijuana wasn’t legalized,” Dr. Ortegren said.

Clever Real Estate found the following:

  • From 2017 to 2019, home values increased $6,338 more in states where marijuana is legal compared to states that haven’t legalized marijuana
  • Recreational dispensaries drive home values up by $22,090 more than cities that do not have recreational dispensaries
  • Home values increase by an average of $470 for every $1 million increase in tax revenue

The Arizona Department of Revenue provided KOLD News 13 with the latest numbers on marijuana tax revenue:

Taxes generated by marijuana sales
Taxes generated by marijuana sales(Arizona Department of Revenue)

“That’s a pretty significant amount,” Dr. Ortegren said.

There are many factors to consider with the rising rates.

“Some states just have higher home values than others or some cities are just more expensive than others, so we wanted to control for that factor and population,” said Dr. Ortegren. “There is some portion of that increase that we can attribute to marijuana sales alone.”

Dr. Ortegren says the increase mainly comes down to the jobs created by recreational marijuana legalization (attracting more people to the state) and the taxes filtered back into the economy.

“We should see within the next couple of years faster increases than we would have seen in Arizona without those sales,” she said.

Clever Real Estate reports similar findings with the legalization of alcohol. Dr. Ortegren says counties with liquor stores tend to have higher property value increases than dry counties.

Copyright 2021 KOLD News 13. All rights reserved.

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