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Abstract
Amenity values, development potential, commodity prices and productive capacity largely determine rural land prices. For rural lands used in timber and agricultural production, capacity and expected future commodity prices play primary roles. For rural lands that are used as second homes or recreational properties, amenities— such as being near lakes or having scenic views—drive pricing. Here, we examine the impact of cannabis production on rural property values in Humboldt County, California, the largest cannabis producing county in the country and also home to both productive and recreational rural lands. We hypothesize that lands that are best for cannabis production will be impacted by two competing forces. On one hand, areas with high cannabis capacity should have higher prices if potential returns to growing cannabis are highest in these areas. On the other, these areas may have social disamentities that provide downward pressure on property values (e.g., higher levels of crime, transient workers, etc.). Using a hedonic model that accounts for land’s productive capacity as well as the presence of potential disamenties, we find the density of cannabis production has a positive relationship with property prices. Our results suggest that a doubling of the median existing cannabis density in a watershed is associated with a 3 to 4 percent increase in the sales price of undeveloped land in Humboldt County.
Parent Publication
Citation
Schwab, Benjamin; Butsic, Van. 2017. Estimating the impact of cannabis production on rural land prices in Humboldt County, CA. In: Standiford, Richard B.; Valachovic, Yana, tech cords. Coast redwood science symposium—2016: Past successes and future direction. Proceedings of a workshop. Gen. Tech. Rep. PSW-GTR-258. Albany, CA: U.S. Department of Agriculture, Forest Service, Pacific Southwest Research Station: 395-402.
