Nav: Home

Craft breweries increase residential property values

March 25, 2019

The craft brewery boom is good for home values.

Using Charlotte, North Carolina, as a case study, researchers at The University of Toledo and the University of North Carolina at Charlotte found that craft breweries have a positive impact on residential property values.

Condominiums in center-city neighborhoods show a nearly 3-percent increase on sales price after a brewery opened within a half mile.

Single family homes in center-city neighborhoods saw a nearly 10-percent increase after a brewery opened within a half mile.

The study, which is published in Growth and Change: A Journal of Urban and Regional Policy, found no significant impacts on commercial property values.

"Being able to walk to a craft brewery in the evening or late afternoon on the weekend is considered a positive amenity that would - for some people - be attractive when looking at a house," said Dr. Neil Reid, professor of geography and planning at The University of Toledo who is affectionately known as the "Beer Professor." "There is a different attitude toward a craft brewery. It's perceived differently than a liquor store or bar."

In Charlotte, a relatively large and growing city with an increasing competition for land and housing, 21 breweries opened between March 2009 and October 2016.

For the study, researchers focused on properties sold between 2002 and 2017 within a half mile buffer of a brewery and found that while many areas in close proximity to a craft brewery appear to have been associated with relatively higher price premiums even before the opening of the brewery, breweries tend to add to this premium.

"These results are informative to policymakers considering revising zoning laws and other regulations in efforts to promote the growth of craft breweries and spur economic development in their local economies," said Dr. Isabelle Nilsson, assistant professor in the Department of Geography and Earth Sciences at the University of North Carolina at Charlotte.

Nilsson earned a Ph.D. in spatially integrated social science at UToledo in 2015 and her master's in economics at UToledo in 2011.

Reid's previous research has shown that craft breweries often tend to be located in neighborhoods that have recently experienced economic distress, and craft breweries have played a key part in revitalization efforts in many urban areas by restoring old, abandoned buildings.

Craft breweries contributed $76.2 billion in economic impacts to the U.S. economy in 2017, including more than 500,000 total jobs with more than 135,000 jobs directly at breweries or brewpubs, according to the Brewers Association.

"This new research shows that craft breweries contribute to increased property tax revenues for local governments, in addition to job creation and aiding neighborhood revitalization efforts," Reid said. "However, the effects to residential property values may not be as significant in places with higher rates of vacancies and lower population growth, as well as in more established cities such as Chicago or New York."

In a separate study recently published in Papers in Regional Science, the researchers took a close look at craft brewery closures in Chicago, Denver and Portland from 2012 through 2016 after a decade of rapid industry growth.

In those four years, 27 craft breweries closed and 225 opened for business.

Peak growth in all three cities took place in 2013 and 2014, and since then the number of entries into the market have declined while the number of closures has increased.

"I think that the craft brewing industry is following a natural progression, with rapid growth at the onset followed by diminishing growth rates as it matures," Nilsson said. "As it continues to mature, we will see shakeouts involving closures of less competitive breweries."

The economic geographers found that being in a cluster does not have a significant effect on brewery survival.

"Many craft brewers who open a business choose to locate close to the competition to draw more people in for brewery hopping, though it also is partly driven by zoning restrictions, too," Reid said. "However, clustering also creates a more competitive environment, which can make it harder for one to remain open."

Although closures do not appear to occur in brewery districts or in areas with a high concentration of breweries, closures tend to occur in more residential areas outside of downtowns.

Closed breweries had an average of one other brewery within one mile, while those that were still open as of 2016 had around 2.5 other breweries surrounding them.

The researchers also identified other trends related to business survival:
  • Being in a neighborhood where incomes are higher is positively related to brewery survival.

  • As the population of white and Millennials in a neighborhood increases, the probability of a brewery surviving decreases.

  • Higher population density also is associated with greater likelihood of closure.
"Even though Millennials are driving the industry and craft beer drinkers are predominantly white, income is more important than racial composition or age composition," Reid said.
-end-
Dr. Oleg Smirnov, associate professor of economics at UToledo, and UToledo doctoral student Matt Lehnert also served as co-authors on the study of closures in the craft brewing industry.

To learn more about the evolving appetite of craft beer drinkers and the experimentation of craft brewers, read Reid's blog about the beer industry.

University of Toledo

Related Neighborhoods Articles:

Crowded homes, poor neighborhoods linked to COVID-19
A study of nearly 400 pregnant women is among the first to show that socioeconomic status and household crowding increase the risk of getting COVID-19.
New evidence on bed bug burden in urban neighborhoods
In the first study to use systematically collected data from multifamily housing inspections to track bed bug infestation, investigators including Christopher Sutherland at UMass Amherst 'confirm what has long been suspected for bed bugs, but also for public health issues in general' -- infestations are strongly associated with socioeconomic factors, including neighborhood income, eviction rates and crowding.
Gap between rich, poor neighborhoods growing in some cities
New research provides insight into how housing prices and neighborhood values have become polarized in some urban areas, with the rich getting richer and the poor becoming poorer.
Bystander CPR less likely for people living in Hispanic neighborhoods
People living in predominately Hispanic neighborhoods are less likely to receive CPR from a bystander following an out-of-hospital cardiac arrest compared to people living in non-Hispanic neighborhoods, researchers from Penn Medicine and the Duke University of School of Medicine reported in the journal Circulation.
In Baltimore, lower income neighborhoods have bigger mosquitoes
Low-income urban neighborhoods not only have more mosquitoes, but they are larger-bodied, indicating that they could be more efficient at transmitting diseases.
Kids from disadvantaged neighborhoods more likely to be obese as adults
Children who grow up in disadvantaged neighborhoods are nearly one-third more likely to experience obesity as adults, according to new research from Cornell University.
Bystander CPR less likely for black kids in poorest neighborhoods
African-American kids from the most disadvantaged areas are about half as likely to receive emergency bystander CPR following an out-of-hospital cardiac arrest than white children in disadvantaged or more prosperous neighborhoods.
To increase bike commuters, look to neighborhoods
People agree that bike commuting improves health, reduces air pollution and eases traffic, a recent survey suggests.
Sellers on classified ad websites favor buyers from affluent neighborhoods
New Rice University research has found that people selling stuff on classified ad websites prefer dealing with buyers from affluent neighborhoods.
Neighborhoods with more green space may mean less heart disease
People who live in neighborhoods with more green spaces may have better blood vessel health and lower levels of stress, and a lower risk of cardiovascular diseases such as heart attacks, strokes and others.
More Neighborhoods News and Neighborhoods Current Events

Trending Science News

Current Coronavirus (COVID-19) News

Top Science Podcasts

We have hand picked the top science podcasts of 2020.
Now Playing: TED Radio Hour

Listen Again: The Power Of Spaces
How do spaces shape the human experience? In what ways do our rooms, homes, and buildings give us meaning and purpose? This hour, TED speakers explore the power of the spaces we make and inhabit. Guests include architect Michael Murphy, musician David Byrne, artist Es Devlin, and architect Siamak Hariri.
Now Playing: Science for the People

#576 Science Communication in Creative Places
When you think of science communication, you might think of TED talks or museum talks or video talks, or... people giving lectures. It's a lot of people talking. But there's more to sci comm than that. This week host Bethany Brookshire talks to three people who have looked at science communication in places you might not expect it. We'll speak with Mauna Dasari, a graduate student at Notre Dame, about making mammals into a March Madness match. We'll talk with Sarah Garner, director of the Pathologists Assistant Program at Tulane University School of Medicine, who takes pathology instruction out of...
Now Playing: Radiolab

What If?
There's plenty of speculation about what Donald Trump might do in the wake of the election. Would he dispute the results if he loses? Would he simply refuse to leave office, or even try to use the military to maintain control? Last summer, Rosa Brooks got together a team of experts and political operatives from both sides of the aisle to ask a slightly different question. Rather than arguing about whether he'd do those things, they dug into what exactly would happen if he did. Part war game part choose your own adventure, Rosa's Transition Integrity Project doesn't give us any predictions, and it isn't a referendum on Trump. Instead, it's a deeply illuminating stress test on our laws, our institutions, and on the commitment to democracy written into the constitution. This episode was reported by Bethel Habte, with help from Tracie Hunte, and produced by Bethel Habte. Jeremy Bloom provided original music. Support Radiolab by becoming a member today at Radiolab.org/donate.     You can read The Transition Integrity Project's report here.