According to The Sacramento Bee, the city of Sacramento is taking a hard look at how incoming marijuana warehouses may affect neighborhoods and homes in the coming months as the commercial production and sale of recreational marijuana becomes legal in California this January. 

Sacramento’s large amount of cheap industrial space has attracted over 100 businesses to the area — all seeking special permits to run indoor marijuana growing operations.

While most of the permits are for locations in the industrial part of town (the Brookville area), nearly one-third of the potential warehouses are in residential regions such as North Sacramento, Curtis Park, and South Land Park.

Current homeowners are wondering if these new arrivals to the neighborhood will decrease their home value. Looking at Colorado home prices, statically, homes within a half-mile radius of a marijuana business have a lower property value than homes further out in the same county.

Smell, legality, and disclosure to new homebuyers may all factor into potential price drops. The city and local Realtor organizations are currently trying to decide whether or not it should be legally required to disclose the warehouse locations to new homeowners. The California Association of Realtors and the Sacramento Association of Realtors haven’t taken an official position on whether they will require location disclosure yet. 

It will be a while before the value of homes takes a clear plunge or stays neutral — the city has about three months until commercial production becomes legal, and many more months until a price change will be evident.