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HomeMy WebLinkAbout030Maruuana and Re A Buddirg Is a a Novcmber 201 B ts NATIONAL ASSOCIATIONT/ REALTORS' I T National Associ a on of roup / 7 a \ \ t \ \ I \ \ \ \ 7 /3/ ,/1l --;r I i \ lt'l TI 77'./a \ / t --/ Residential Real Estate Residential Real Estate Trends NAR surueyed its membership regarding their interaction with marijuana and the rea! estate sector in states where marijuana is legal. This report is a summary of the findings. One percent of members were marijuana specialists in residential real estate. As marijuana intersects with real estate, the demand for both residential and commercial properties is a growing market Currently, only one to two percent of residential respondents where marijuana is legalfor medical or for medical and recreational use were aware of their MLS containing a specifi c marijuana fi eld. The highest share of respondents reported they currently have residential inventory available in their market Between I I and 15 percent of respondents in states where marijuana is legalto some extent believe inventory was tight for multiple reasons, including all-cash purchases from the mariluana industry. More than three-quarters of members have not seen a change in residentia! ProPert)' values near dispensaries. One- tenth have seen an increase and 12 to l4 percent have seen a decrease in residential property values near dispensaries. Approxi mately two-thirds of respondents said that homeowner associations often have rules and restrictions against smoking and growing in home or common areas. Six percent report that homeowner associations did allow growing or smoking in home or common areas. Selling a Grow House Approxi mately three-quarters of members in states where marijuana is legal had never tried selling a grow house. One in twenq/ of these residential members had sold a grow house in the past Among residential members who have sold a grow house,27 percent in states where medical marijuana is legal had a difficult time selling a grow house. Thirty-three percent of members in sates where both medical and recreational marijuana is legal had difficulty selling a grow house. Among members who had sold a grow house, seven in l0 did disclose the house was used as a grow house. Among those who sold a grow house in the pasg nine in l0 had no title issues selling the grow house. Three percent of members who had sold a grow house in states where medical marijuana is lega! and one percent where medical and prescription use is legal used a specialized company for the title. Five percent of members who had sold a grow house in states where medical marijuana is legal and one percent where medical and prescription use is !ega! were not able to find a title company forthe home sale. NAR 2018 - Morijuano ond Reol Estote: A Budding lssue lr l, Residential Real Estate Property Management About one-third of members had seen addendums added to leases which restrict growingor smokint on properties. Fo,ty- three percent of members in states where medical marijuana is legal and 36 percent of members in states where both medical and recreation marijuana is lega! had no issues leasing a property after the growth or use of marijuana in a property. The most common issue was the smell,which nearly one in five members had encountered. Moisture issues were more common in areas where only prescription use is legal. Some states allow growing on personal propeq/. When a tenant is allowed to trow marijuana in their rental property, it was most common for the tenant to pay the utility costs. When tenants were allowed to trow marijuana in their rental units, nine percent of those in states with legal medical marijuana said self-contained machi ne/boxes were requi red. Thi s was also the case among six percent of those in states where both medical and recreational marijuana is legal. As marijuana is an all-cash business, earnings from those in the business were cash proceeds. About one-quarter of landlords were unwilling to take cash for rent. About one-quarter of those in states where prescription marijuana is legal would take cash for rent, and about one- fifth of those where mari.iuana is lega! for both prescription and recreational use would take cash for rent. NAR 2018 - Morijuono ond Reol Estote.' A Budding lssue I, I 4 I \\\ Residential Re aL Estate T NAR 2018 - Morijuono ond Reol Estote.' A Budding lssue (.- 'J!\,ti \l : \-_c N:tr- Vd -=\a \, \:L --r L 7)rr \- MLS Contains Nlaruuana Fields As marijuana in real estate is a growing marke! currently only one to two percent of residential respondents were aware of their MLS containing a specifi c marijuana fi eld. MLS Contains Marijuana Fields DOES NOT CONTAIN MI.S FIELD 6l% 26% DON'T KNOW t% DOES CONTAIN MLS FIELD 0% 20% 4% 60% r Only hescription is Legal x Both Recreational & Prescription Are Legal NAR 2018 - Marijuana ond Reol Estote: A Budding lssue a o//o 80% I 2% 37% Residential Inventory Due to Il-Cash Purchases a a The highest share of respondents reported they currently had residential inventory available in their market One percent each of respondents in states where only medical marijuana is legal and in states where both medical and recreational marijuana is legal had seen tightened housing inventorT entirely from all-cash purchases. Between I4 and l0 percent of respondents believed inventory was tight for multiple reasons, including as a result from this industrT. Res id enti al I nve nto ry Ti ghte ned Du e to Al l-Cash Purchases from Mariiuana lndustry NO, HAVE INVENTORY NOT SURE YES, TIGHTENED, BUT THIS IS JUST ONE ASPECT YES, TIGHTENED, AND ENTIRELY DUE TO THIS t% t% 0% t0% 20% 30% 40% Both Recreational & Prescription Are Legal 50% r Only Prescription is Legal NAR 20r8 - Morijuono ond Reol Estote; A Budding lssue \ \ t \ \. 47% 43% t0% 4t% 44o/" t4% Residential Property Values Near Dispensaries More than three-quarters of members in states where marijuana is legal to some extent had not seen a change in residential property values near dispensaries. One-tenth of members inthese states had seen an increase and 12to 14 percent had seen a decrease in residential property values near dispensaries. Res i d e n ti al P ro perty Val ues N ear Di s pen sari es o//o I N C REASE D SU BSTANTIALLY o,//o INCREASED SLIGHTLY NO CHANGE DECREASED SLIGHTLY DEC REASE D SU BSTANTIALLY a 0% I Only Prescription is Legal 20% 40% 60% aa Both Recreational & Prescription Are Legal NAR 2018 - Morijuona and Reol Estote.' A Budding lssue 80% rl lr 6% 76% lo% a 7% lr '',. Homeou/ner As sociation Rules and R.gulations a a Just under two-thirds of respondents reported that homeowner associations often had rules and restrictions against smoking and growing in home or common areas. Six percent of respondents said that homeowner associations did allow growing or smoking in home or common areas. HomeownerAssociation Ru les an d Regu lations HAVE RESTRICTIONS SMOKING IN COMMON AREAS HAVE RESTRICTIONS GROWING IN COMMON AREAS HAVE RESTRICTIONS GROWING IN EXPOSED AREAS (PRTVATE YARDS W/OUT FENCES) HAVE RESTRICTIONS GROWING INSIDE HOME ALLOW GROWING INSIDE HOME ALLOW SMOKING IN COMMON AREAS ALLOW GROWTNG tN EXPOSED AREAS (PR|VATE YARDS W/OUT FENCES) ALLOW GROWING IN COMMON AREAS NONE OF THESE NOTED t% 0% 0% 0% Common Answer to Other:HOAs moy be relying on "privoq" restriction in lows to contoin uselgrowth inside of home. OTHER 0%20% r Only hescription is Legal r Both Recreational & Prescription Are Legal NAR 2018 - Morijuono ond Reol Estote: A Budding lssue 40% 2s% t6% t3% to% 3% 45% 26% I t4% t! 45% 29% Selling aGrow House NAR 2018 - Morijuano ond Reol Estote.' A Budding lssue l h-J ffi \r \ Z r'\ hu*.t 17 :i :. \. />- lr rJta \v ,ntr,; *x& / 7 F E c rrk F -i! /I /-sil F (r sr t Grow House: E*perience Sellitg Approximately three-quarters of respondents had never tried selling a grow house. One in twenty of these residential members had sold a grow house in the past. Experience Sel ! ing a G row House NO, HAVE NEVERTRIED HAVE SOLD GROW HOUSE NO, TRIED BUT UNABLE t% DON'T KNOW a 0% r Only Prescription is Legal 20% 40% 60% Both Recreational & Prescription Are Legal NAR 2018 - Morijuono and Reol Estote: A Budding lssue 80% 't \ \ 78% t7% 73% l8% Grow House: Difficulty Selling Among residential members who had sold a grow house,27 percent in states where medical mariiuana is legal had a difficult time sellinga grow house.Thirty-three percent of members in states where both medical and recreational marijuana is legal had difficulty selling a grow house. Difficulty Selling a Grow House NOT HARD TO SELL HARD TO SELL a 0% r Only Prescription is Legal 20% 40% 60% r Both Recreational & Prescription Are Legal NAR 2018 - Morijuono ond Reol Estote.. A Budding lssue 80% 57% 33% 27% { Grow House: Disclosed Home Sale Among members who had sold a grow house, seven in l0 did disclose that the house was used as a grow house. Disclosed Home Sale as a Grow House YES, DISCLOSED NO, DID NOT DISCLOSE DON'T KNOW a 0% I Only hescription is Legal 20% 40% 60% s Both Recreational & Prescription Are Legal 80% NAR 2018 - Morijuona ond Reol Estote: A Budding lssue I \ \ \ L \ I \ \.\l 75% | 17" l4% 7t% t8% o//o Grow House: Title Issues a a Among those who sold a grow house in the past, nine in l0 had no title issues sellingthe grow house. Three percent of members who had sold a grow house in states where medical marijuana is Iegal and one percent where medical and prescription use is legal used a specialized company for the title. Five percent of members who had sold a grow house in states where medical marijuana is legal and one percent where medica! and prescription use is legalwere not able to find a title company for the home sale. a Title lssues Selling a Grow House NO ISSUES YES, USEDA SPECIALIZED TITLE COMPANY t% YES, COULD NOT FIND A TITLE COMPANY t% Common Answer to O Some sellers do not disclose it is o grow house. 0% 20% 40% 60% 80% r Only Prescription is Legal a Both Recreationa! & Prescription Are Legal NAR 2018-Morijuono ond ReolEstotet A Budding lssue ThePTHER 100% 7 \ \\ \ 90% Residential Property Management E*perience I I I NAR 2018 - Morijuono ond Reol Estoter A Budding lssue \ 7 \ 7 C \ hI i \ t-4 ? I .\ Addendum or Provisions in Leases: Restricting Growing or Smoking The majority of residential properuy managers had not seen addendums added to leases which restrict growingor smokint on properties. About one-third had seen addendums added to leases which restrict growing or smoking on properties. Addendum or ProvisionsAdded to Leases Restricting Growing or Smoking NO ADDENDUMS ADDED ADDENDUMS ADDED OTHER Common Answer to Other: No smokrn g of ony type ollowed. DON'T KNOW a a 0% r Only Prescription is Legal 20% 40% x Both Recreational & Prescription Are Legal NAR 2018 - Madjuano and Reol Estote: A Budding lssue 60% \ \\\ \\ N \ s5% 32% 6% 7% 52o/" 36% 7% Difficulty Leasing Property After Grornth or [Jse of Vlariju ana Forty-three percent of members in states where medical marijuana is legal and 36 percent of members in states where both medical and recreation marijuana is legal had no issues leasing a property after the growth or use of marijuana in a property. The most common issue was the smel!, which nearly one in five of these members had encountered. Moisture issues were more common in areas where only prescription use is legal. Difficulty Leasing PropertyAfter Growth or Use of Marijuana YES, SMELL IS DIFFICULT TO REMOVE YES, MOISTURE ISSUES NO ISSUES 0% 20% 4% r Only Prescription is Legal n Both Recreational & Prescription Are Lega! a a NAR 2018 - Morijuono ond Reol Estote: A Budding lssue \\ \ \ \ \ t8% 3% 36% t8% 43% Tenant Growing: Utility Costs a When a tenant was allowed to trow marijuana in their rental property, it was most common forthe tenant to pay the utility costs. Utilit), CostsWhenTenant isAIIowed to Grow TENANT PAYS UTILIT!ES a% LANDLORD PAYS UTILITIES t% DON'T KNOW 0% r Only Prescription is Legal 20% 40% ' Both Recreational & Prescription Are Legal NAR 2018 - Morijuono ond Reol Estotel A Budding lssue 36% 35% 4t% 33% Tenant Growing: Self-Contained Gro*irg BoxllWachine a YES, SELF.CONTAI N ED MAC H I N E/BOX REQUIRED NO BOX NEEDED DON'T KNOW When tenants were allowed to grow marijuana in their rental units, nine percent of those in states with legal medical marijuana said self-contained machine/boxes were required.This was also the case among six percent of those in states where both medical and recreational marijuana is legal. Self-C o ntained G rowi ng Box/M achi ne When Ten ant i s Allowed to Grow r Only Prescription is Legal 0% 20% 40% 60% Both Recreational & Prescription Are Legal NAR 2018 - Morijuano ond Reol Estote: A Budding lssue \ t \.t \ \ \ 6% 3o/" 68% 63% Landlords Willing to Take Cash from Vlariju ana Proceeds for Rent a a As marijuana is an all-cash business, earnings from people in the business are cash proceeds. About one-quarter of landlords were unwillingto take cash for rent. About one-quarter of those in states where prescription marijuana is legal would take cash for rent, and about one-fifth of those where marijuana is legalfor both prescription and recreational use would take cash for rent. Landlords Willing to Take Cash from Marijuana Proceeds for Rent No, MOSr wtLL I3'rAKE CASH Ar MOST LANDLORDS WILL TAKE CASH AND DON'T ASK WHERE CASH COMES FROM NO, MOST WILL NOT TAKE CASH FROM ILLEGAL FEDERAL ACTIVITY YES, SOME TAKE CASH YES, NEARLY ALL ARE t7% to% 0% 20% .'. Both Recreational & Prescription Are Legalr Only Prescription is Legal NAR 2018 - Morijuono ond Reol Estote: A Budding lssue 5"/o 29% t4% 2% 23% 22% 5% :)> I ffi \\t I 'l NAR 2018 - Morijuono ond Reol Estoter A Budding lssue Ir Commercial ReaI Estate Tr Z- 'I / ( Ersr Commercial Real Estate lnventory and Demand ln states where prescription marijuana use is legal,34 percent of commercia! members had seen an increased demand in warehouses, 3l percent in storefronts, and l8 percent in land. ln states where prescription and recreational marijuana use is legal,27 percent of these members had seen an increased demand in warehouses, !7 percent in storefronts, and l4 percent in land. One-fifth of members had seen an increase and !0 to l3 percent had seen a decrease in commercia! property values near dispensaries. Nearly one-quafter of members had seen an increase and six percent have seen a decrease in commercial property values near growing lands. About three in l0 commercial members noted some tenants did not want to be near a dispensary; howeventhe highest share did not know. states where both prescription and recreational marijuana is legal,3l percent of commercial members reported no change in the perception of crime and l8 percent cited an increase in the perception of crime. While the perception of crime seemed to increase, actual crime had only marginally risen in respondents' opinions.ln states where only prescription marijuana is legal, 43 percent of commercial members cited no change in crime and seven percent reported an increase in crime. ln comparison, in states where both prescription and recreational marijuana are lega!,28 percent of commercial members cited no change in crime and eight percent said there was an increase in crime. Perception of Crime ln states where only prescription marijuana is legal,39 percent of commercial members said there was no change in the perception of crime, while l6 percent reported an increase in the perception of crime. !n comparison, in NAR 2018 - Morijuano ond Reol Estote: A Budding lssue I I |' t-., \-t1/, Commercial Real Estate Commercial Leasing The majority of commercial members were not currently leasing to marijuana related businesses. Seventeen percent of commercial members in states where prescription marijuana is legalwere leasing to marijuana businesses. ln states where both recreational and prescription mari.iuana is legal,six percent were leasing to marijuana related businesses. Half of commercial members said that no additional addendums were added to leases when the business was related to mari.iuana. More than one-quafter of commercial members in medical marijuana states and one-fifth of in medica! and recreationa! marijuana states did have lease addendums. The most frequently cited concern of commercial members was the smell when leasing to marijuana related businesses, followed by theft of cash on property, fire hazards, and moisture issues. About half of commercial members cited landlords were unwillingto accept cash for rent. About one-quarter cited some landlords would take cash for rent, but a small portion would not ask where the cash came from. NAR 2018 - Morijuono ond Reol Estote: A Budding lssue \ \ !t E /, //