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Marijuana and Real Estate Are Gradually Becoming Intertwined

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"According to a new study by the National Association of Realtors, some members report an increase in residential property values near dispensaries in states where marijuana is legal."
Marijuana and Real Estate Are Gradually Becoming Intertwined

As Illinoisans continue to adjust to life in a state with legalized recreational marijuana, some real estate agents have their eye on how the 2020 change will impact home sales.

A report from the National Association of Realtors released Tuesday assessed that impact in states where marijuana is legal for medical or recreational use, which now includes 47 states and the District of Columbia. In addition to Illinois, 10 other states have legalized recreational cannabis use.

The study, which surveyed about 3,600 members who practice commercial and residential real estate, asked whether members thought to legalize marijuana had impacted various aspects of the housing market.

“From property owners to manufacturers, to those who simply want to engage for leisure, it all touches real estate in some form.”

Jessica Lautz, NAR vice president of demographics and behavioral insights, in a statement.

Residential property values near dispensaries were not substantially affected, according to a majority of the members surveyed. Between 7% to 12% said they actually noticed an increase in values, while 8% to 27% said they saw a decrease.

For those trying to rent to a new occupant after a previous one grew marijuana, the most common problems were lingering odors and moisture issues.

A broker would have a responsibility to disclose anything with an impact on the physical condition of a property, such as a mold everywhere from too much moisture, said Betsy Urbance, general counsel for Illinois Realtors.

And once a home has been used as a setting to grow marijuana, it might be tough to resell. Among surveyed NAR members who have sold a grow house, 29% had a difficult time.

Previous studies have assessed whether legalization increases property values. As legislators considered legalization last year, Chicago real estate agents had mixed assessments on whether they thought the measure could improve the market.

Betsy Urbance noted that the association has been fielding phone calls from real estate agents with marijuana-related questions, like what agents are required to disclose about a property where marijuana is smoked or grown, and how homeowners associations are handling the new law.

According to the NAR report, many homeowner associations have rules in place that restrict smoking or growing marijuana, in both homes and common areas. Within such restrictions, the most common were against smoking and growing in common areas or exposed spaces, like private yards without fencing.

In Illinois, the bill legalizing marijuana allows condo associations to restrict smoking; homeowners associations were considering how to handle the issue ahead of the Jan. 1 change.

States, where marijuana has been legal the longest, saw the largest impact, the report said. In states where medical and recreational marijuana has been legal for at least three years — such as Colorado, Washington, and Oregon — respondents more commonly experienced issues over lingering odors and moisture.

Those who work in real estate are making shifts in response to new challenges. Some landlords are adding addendums to leases that restrict growing on properties.

If condo building documents have no smoke specifications, “Then you’d have to deal with it on a case-by-case basis if the smoke seeped into the neighboring unit or something,” Urbance said.

And if a lease has no specifications about a property being smoke-free, “then presumably a tenant would be able to smoke whatever would be legal in that person’s home, whether it’s rented or owned,” she said.

More about Cannabis legal:

Source: ChicagoTribune

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Christine@Vapebiz.net
VAPEBIZ’s news editor, keep up-to-date with daily news policies regarding Cannabis and Vape. Share some basic knowledge of cannabis, mainly focusing on the daily use of CBD products.

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