Home Front

A blog about the economy and the Sacramento-area real estate market.

August 5, 2010
Legalized pot cultivation may rock the world of landlords

FRIDAY UPDATE: Here is the full column running in today's Bee and Sacbee.com.

I stumbled this week onto a really interesting policy intersection, the corner of legalized pot cultivation and real estate. Landlords and property managers are waking up to the idea that people will want to grow and consume legal pot in their rental properties. That's if Proposition 19 passes this November.

Being ever intrigued by how real estate is intertwined with everything I talked with legal pot proponents and real estate industry groups about the big questions:

What's the game plan when a tenant sets aside 25 square feet in the back yard or inside the house and begins to grow his or her own marijuana for personal consumption?

Can the owner say no? Does the tenant have to ask?

Key backers of Prop. 19 say it's their understanding that tenants will have to ask. One said it's like a dog. Dogs are legal. But landlords don't have to allow them.

The apartment industry isn't so sure. This is big month for industry meetings about what legalized pot in California might mean.

Homeowner associations are a whole new question, as well. I talked yesterday with Karen Conlon, director of the California Association of Community Managers. That is a trade group for association property managers. She thought homeowner association boards would be well in their rights to tell residents: You cannot grow pot, even if it's legal, in this neighborhood.

That raised the question then: will a real estate agent be legally obligated then to disclose that a particular neighborhood does or doesn't allow pot cultivation?

Fascinating stuff. Read the full Home Front column in Friday's paper and on sacbee.com.

By no means is the rental industry totally united against Prop. 19's passage. I talked with one Sacramento property manager who said legalizing pot would make it easier for managers like him. He can't check everybody, he said, to see who is doing what.

"If they make it legal to grow, it becomes a non-issue," he said. Like brewing beer in the basement.

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