These are high times indeed: legal recreational cannabis use is now a reality in Canada. Long-awaited federal legislation Bill C-45 – the Cannabis Act – mandates that Canadians are now able to consume the drug, grow their own plants, and purchase it from a provincially-regulated retailer.
However, while the future may be green, just how legal cannabis will impact the real estate industry – including homeowners, prospective buyers, renters and landlords – remains one big grey area. That’s because, despite the drug’s newly-minted legal status, questions linger over how personal use and cultivation may impact the value, desirability, and even the insurable status of homes for sale.
With such areas remaining, well, hazy, it’s no surprise that stigma pervades among current and prospective homeowners, as well as those renting out their property. According to a new national survey conducted by Zoocasa that polled over 1,300 Canadians, sentiments remain largely negative regarding the following issues:
- Consumption and cultivation in private residences
- Living in close proximity to where legal cannabis is sold
- Tenant and landlord rights when it comes to the presence of legal cannabis in a rental unit
Behind Closed Doors
According to the survey data, most Canadians feel that smoking cannabis inside their homes is a generally bad idea. A full 64% of those who indicated they were homeowners felt doing so would harm its resale value, an increase from the 39% who indicated as such in Zoocasa’s previous Housing Trends Report.
As well, over half of homeowners – 57% – felt that growing even the legal amount of cannabis (up to four plants under the Cannabis Act), would have a negative impact on a home’s value. This stigma extends to prospective home buyers, too: A total of 52% respondents say they’d be less likely to consider specific houses for sale if they knew even a legal amount of cannabis had been grown in them.
- 57% of homeowners feel that cultivating even a legal amount of cannabis inside a home will negatively impact the home’s resale value; 26% disagree, while 18% are neutral.
- Of homeowners who agree home cultivation would harm home values, only 6% would take the risk of doing so. However, of the of respondents who rent and indicated they felt home cultivation would negatively impact values, 19% said they would still consider home cultivation.
- 64% of respondents who indicated they are homeowners believe smoking cannabis inside the home will devalue it; 21% of respondents disagree, while 15% are neutral.
- In contrast, 46% of respondents who indicated they are renters agree smoking cannabis would devalue their unit; 33% disagree, while 20% are neutral.
- 15% of all respondents indicated they would consider home cannabis cultivation.
- Millennials are demographically least likely to consider home cultivation stigmatizing, with only 38% indicating that a legal amount of cannabis grown in a home would reduce their desire to buy that property, compared to 58% of Gen Xers and 59% of Boomers.
Not in My Backyard
While Bill C-45 is federal legislation, the retail distribution of cannabis, whether via a physical outlet or online source, is under the jurisdiction of the individual provinces. While this means Canadians will now be able to purchase the drug legally from a provincially-regulated retailer, homeowners aren’t exactly welcoming dispensaries to the neighbourhood with open arms.
Zoocasa’s findings reveal nearly half of all respondents (42%) feel having a cannabis dispensary in the neighbourhood would harm the value of nearby homes. As well, 48% of respondents stated the presence of a dispensary nearby would reduce their desire to purchase a specific property.
However, those who already live by a local dispensary (16% of all respondents) are more likely to be comfortable with the presence of one (58%). By contrast, of those who don’t currently live close to a dispensary or are not sure if there is a dispensary nearby (84% of all respondents), 54% feel strongly that they would not be comfortable with one coming to their neighbourhood.
These sentiments appear to be cannabis specific, however – only 14% of all respondents stated they would feel uncomfortable with a new liquor store opening in their neighbourhood.
- 42% of all respondents say having a cannabis dispensary in the neighbourhood would reduce nearby home values; 34% disagree, while 23% are neutral.
- Only 11% of all respondents feel a new liquor store would reduce the value of nearby homes; 63% disagree, with 26% neutral.
- 58% of respondents who currently live close to a dispensary are comfortable with its presence. Of those respondents, 71% of respondents who currently live close to a liquor store are comfortable having that store in their proximity.
- 54% of respondents who do not currently live close to a dispensary would be uncomfortable with one opening nearby, while 26% would feel comfortable, and 20% are neutral. Out of respondents who do not currently live near a liquor store, only 29% are uncomfortable with having a liquor store in the neighbourhood, while 34% would be comfortable, and 37% are neutral.
- Millennials are least likely to be pessimistic about the presence of a dispensary, with only 31% indicating they’d feel a dispensary would reduce the value of homes nearby, compared to 50% of Xers and 47% of Boomers.
One of the most hotly debated pre-legalization topics is whether those who live in close proximity to their neighbours – such as condo unit owners and renters – should have the same ability to consume cannabis as those who live in detached homes, as condo boards and rental management have fought to control or ban use prior to legalization.
According to the data, the majority of Canadians aren’t in favour of condo or apartment consumption, with 61% of all respondents disagreeing residents should be able to smoke cannabis within their units, and 64% believing boards and property managers should be able to ban the drug’s use in residents’ units.
However, when it came to understanding what those consumption and cultivation rights actually are, renters are less clear: just 32% of tenants polled say they don’t know, while an additional 32% say they’re unsure, with only 36% stating they understand their home cannabis consumption rights. In comparison, 67% of landlords agreed they understand their rights regarding what can and can’t be enforced when it comes to tenants smoking or cultivating the drug on their property.
As well, refraining from smoking within a rental unit appears to pay off: 65% of landlords say they would consider lowering rent for tenants who do not smoke cannabis.
- Of those who indicated they are renters, 35% agree that tenants should be able to smoke cannabis inside their homes; 46% do not agree, while 19% are neutral.
- 88% of those who indicated they are landlords said they want, or plan, to ban smoking within their rental properties; 7% do not want to or plan to, while 5% are neutral.
- 13% of renters who currently smoke cannabis inside their homes (whether it’s a few times a year to daily) say they would be willing to pay a higher rent for the ability to smoke in their homes; 74% would not be willing to, while 13% are neutral.
- 47% of landlords say they plan to, or would want to, charge higher rent due to cannabis smoking becoming legal; 24% do not plan to or want to, while 29% are neutral.
- 43% of renters who do not smoke cannabis feel landlords should lower rent for tenants who don’t smoke in their homes; 65% of landlords would actually consider doing this, while 27% of landlords would not, and 7% are neutral.
About This Report
The findings are based on an online survey conducted by Zoocasa.com from Sep 27, 2018 to Oct 3, 2018 of over 1,380 respondents who live in Canada. The estimated margin of error is +/- 2.6 percentage points, 19 times out of 20.
Zoocasa.com is a real estate company that combines online search tools and a full-service brokerage to empower Canadians to buy or sell their homes faster, easier and more successfully. Homebuyers can browse real estate listings on the website or the free Zoocasa iOS app.
For more information about survey findings or to set up a media interview please contact [email protected]