Legal cannabis shops could boost nearby property values: experts, study
Quebec landlords are expressing concern over the effects legalizing marijuana will have on their rental units.
While same Canadian landlords are looking to ban marijuana use in their rental units and several municipalities don't want legal cannabis stores in their neighbourhoods, a U.S. study suggests that pot could lift property values.
Property prices for homes in Colorado close to shops that converted to recreational marijuana from medical marijuana in 2014 saw a roughly eight per cent boost, the study by professors based in Wisconsin, Georgia, and California found.
Experts say it's too early to tell if Canadian homeowners can expect a similar effect, but note that retail locations could benefit neighbourhoods by driving foot traffic to merchants, as well as reducing crime.
The president of the Canadian Federation of Apartment Associations said Monday that landlords should be allowed to prohibit marijuana usage in their properties in Ontario, where proposed provincial law will limit pot consumption to private residences.
The Corporation of real estate owners of Quebec (CORPIQ) told a parliamentary committee hearing last week that their members are concerned about the effect of marijuana smoke on rental properties and on tenants, saying they want the ability to unilaterally alter leases.
Quebec is not going to permit individuals to grow cannabis at home, but Health Canada has been issuing permits allowing people to grow medical marijuana
Queen's University real estate professor John Andrew says a legal cannabis store could potentially drive more customer traffic to nearby retailers, boosting interest in the surrounding area that may eventually spillover into the residential neighbourhood.
The U.S. study's authors say the impact of a store's conversion from medical marijuana to recreational pot on house prices was "highly localized." The study used publicly available data to compare the prices of single-family homes within a 160-metre radius of the cannabis shop, compared to those slightly further away, before and after recreational pot became legal in Colorado in 2014.
"While we hypothesize that some contributing factors may have included an increase in housing demand as a result of an increase in marijuana-related employment, lower crime rates, and additional amenities locating in close proximity to retail conversions, finding the specific channels that explain our results is an open puzzle that we leave for future research," the authors wrote.
- With files from CTV Montreal