The Effect of MJ Legalization on the Denver Housing Market (how much, construction jobs)

[TCHP]

Originally Posted by kevin_in_Denver

Anecdotally, telecommuters usually opt for a house "away from it all" in CO.

Yes, but too far away form it all can compromise telecommuting speeds, so some vestige of urban access is still at least somewhat necessary.

[illinoisphotographer]

Originally Posted by kevin_in_Denver

Anecdotally, telecommuters usually opt for a house "away from it all" in CO.

I work remotely and would never get a primary house in the middle of nowhere. I work from home with our cat.... so I NEED to get out after work and meet up with friends and do stuff.

It was when I went into the office and dealt with traffic that I wish I had land away from everything.

[SkyDog77]

Originally Posted by kevin_in_Denver

Anecdotally, telecommuters usually opt for a house "away from it all" in CO.

But you have identified a trend that could certainly grow. I personally chose Platt Park over Evergreen because of the diversions of the city.

I work from home when I'm not traveling. I like being in the city.

[kevin_in_Denver]

I started this thread based on a hunch generated from my experience -- that the MJ industry is the single largest driving force for the recent increase in rents for single family homes in the city.

I had no proof, so now I'm trying to find some studies that might have facts that support my thesis.

But first, some basic cause and effect:

Prices go up when supply is tight, due to consumer competition. The supply of housing gets tighter when there is more demand, and supply (construction) doesn't keep up. Population growth causes more demand, and increased jobs bring the increased population. Construction can't keep up because it's a much slower process than someone just moving to Denver.

Therefore job growth is the cause of rent growth.

"Metro Denver and Northern Colorado Industry Clusters - Competitive Advantages
(one-year/five-year employment growth in parentheses):

(#1): Aerospace - Colorado had the nation’s second-largest aerospace economy (behind California) in 2016 with 25,500 workers. Companies in the nine-county region employed about 79 percent of these workers, ranking the region second in private-sector aerospace employment concentration out of the 50 largest metropolitan areas. (1.9%/2.3%)" from (1)

"As of December 2015, the state had issued 26,929 occupational licenses to workers employed at medical and recreational cannabis companies – a whopping 68% increase from December 2014, according to data provided by the Colorado Department of Revenue."
from (2)

So the marijuana industry apparently has the highest number of jobs in the state and is still growing incredibly fast. So I think this proves my original point.

[illinoisphotographer]

Originally Posted by kevin_in_Denver

I started this thread based on a hunch generated from my experience -- that the MJ industry is the single largest driving force for the recent increase in rents for single family homes in the city.


So the marijuana industry apparently has the highest number of jobs in the state and is still growing incredibly fast. So I think this proves my original point.

People working retail MMJ aren't making enough to afford a house. In addition, that increase for the MMJ industry is state-wide, not just Denver metro like the aerospace jobs you also linked.

The increase in pricing mirrors what other secondary cities have gone through like Seattle, Portland and Austin.

[kevin_in_Denver]

Four roommates in retail MMJ can easily afford a rental house.

[illinoisphotographer]

Originally Posted by kevin_in_Denver

Four roommates in retail MMJ can easily afford a rental house.

So now we're back to college living. So if you're claiming that, then divide the 25,000 number by 4 and you've got a total of 6,250 units throughout the entire state.

Vs: 25,500 aerospace workers, mostly in the metro who are probably making $50-60k + salaries.

Some people moved here for weed. Sure. But retail budtenders aren't making enough to have a significant impact in single family housing.

Again, Denver is experiencing the same boom as Austin, Portland and Seattle (among other cities). Care to explain that?

[Raddo]

Originally Posted by illinoisphotographer

People working retail MMJ aren't making enough to afford a house.

It goes way beyond that. For example, there has been a huge influx of people who work in high tech, and cannabis is quite popular in the high tech sector. A large chunk of that $1.3 billion in sales (in 2016 alone) came from those folks, ones who can easily afford it. And they can afford housing too.

How many of those who have moved to the front range since 2012, with legal cannabis being a factor in their decision to move, is unknown and hard to pin down.

I know in my case, since I have my own business that I can operate from anywhere, my decision of where to flee to from Oklahoma was heavily influenced by Colorado's legal cannabis laws. I was lucky enough that I could move here without having to live in a front range city.

I wonder how many thousands of others are like me, but would never admit that legal cannabis influenced their decisions?

BTW, Portland and Seattle have legal cannabis too, just sayin'. Austin is an anomaly just because it's Austin and is quite unique.

[Timmyy]

Originally Posted by kevin_in_Denver

I'll admit that most of my rental houses are in a "pot-friendly" neighborhood.

Rents have increased 25% in about a year and a half.

The single most important factor in this increase is legalization, but I seem to be one of the few landlords reporting this.

CNN has caught on:

How legal marijuana biz is boosting Denver's housing market - Jun. 4, 2015

Originally Posted by kevin_in_Denver

I started this thread based on a hunch generated from my experience -- that the MJ industry is the single largest driving force for the recent increase in rents for single family homes in the city.

I had no proof, so now I'm trying to find some studies that might have facts that support my thesis.

But first, some basic cause and effect:

Prices go up when supply is tight, due to consumer competition. The supply of housing gets tighter when there is more demand, and supply (construction) doesn't keep up. Population growth causes more demand, and increased jobs bring the increased population. Construction can't keep up because it's a much slower process than someone just moving to Denver.

Therefore job growth is the cause of rent growth.

"Metro Denver and Northern Colorado Industry Clusters - Competitive Advantages
(one-year/five-year employment growth in parentheses):

(#1): Aerospace - Colorado had the nation’s second-largest aerospace economy (behind California) in 2016 with 25,500 workers. Companies in the nine-county region employed about 79 percent of these workers, ranking the region second in private-sector aerospace employment concentration out of the 50 largest metropolitan areas. (1.9%/2.3%)" from (1)

"As of December 2015, the state had issued 26,929 occupational licenses to workers employed at medical and recreational cannabis companies – a whopping 68% increase from December 2014, according to data provided by the Colorado Department of Revenue."
from (2)

So the marijuana industry apparently has the highest number of jobs in the state and is still growing incredibly fast. So I think this proves my original point.

How does that approve your original point?

Yes, the pot industry has had some impact on the housing here in the Denver metro area but it is tiny compared to other reasons for the growth of this city and state.

Out of those 26,929 occupational licenses issued how many actually work in the industry and how many actually live here now?

[Timmyy]

Originally Posted by kevin_in_Denver

I started this thread based on a hunch generated from my experience -- that the MJ industry is the single largest driving force for the recent increase in rents for single family homes in the city.

I had no proof, so now I'm trying to find some studies that might have facts that support my thesis.

But first, some basic cause and effect:

Prices go up when supply is tight, due to consumer competition. The supply of housing gets tighter when there is more demand, and supply (construction) doesn't keep up. Population growth causes more demand, and increased jobs bring the increased population. Construction can't keep up because it's a much slower process than someone just moving to Denver.

Therefore job growth is the cause of rent growth.

"Metro Denver and Northern Colorado Industry Clusters - Competitive Advantages
(one-year/five-year employment growth in parentheses):

(#1): Aerospace - Colorado had the nation’s second-largest aerospace economy (behind California) in 2016 with 25,500 workers. Companies in the nine-county region employed about 79 percent of these workers, ranking the region second in private-sector aerospace employment concentration out of the 50 largest metropolitan areas. (1.9%/2.3%)" from (1)

"As of December 2015, the state had issued 26,929 occupational licenses to workers employed at medical and recreational cannabis companies – a whopping 68% increase from December 2014, according to data provided by the Colorado Department of Revenue."
from (2)

So the marijuana industry apparently has the highest number of jobs in the state and is still growing incredibly fast. So I think this proves my original point.

Why is this topic so important to you? I am being serious with this question. You seem bent on proving to us that marijuana is the main reason for the boom here.