Along with my colleague, Isabelle Nilsson of the University of North Carolina in Charlotte, I recently published a study that examined the impact of craft breweries on property values in the city of Charlotte, NC. In the study we looked a properties sold between 2002 and 2017 . To summarize our findings, we discovered that the opening of a craft brewery in Charlotte resulted in a 9.8 percent increase in the value of single-family homes and a 3.2 percent increase in the value of condominiums. Interestingly, the opening of a craft brewery had no impact on the value of commercial properties. Charlotte is a fast growing city with a vibrant craft brewing scene – twenty-one craft breweries opened in the city between March 2009 and October 2016.
Our explanation for our findings is relatively straightforward. A craft brewery is, for many people, a neighborhood amenity. Imagine it is a warm June evening, and you decide that you would like to pop out for a couple of pints of craft beer. What could be better than being able to walk to the neighborhood craft brewery and doing just that. In a previous blog entry, I suggested that many craft breweries are emerging as a new type of Third Place on the American landscape – community gathering spots where people can go and enjoy a beer and relax, while engaging in conversation with other patrons. Being within walking distance of such places is clearly desirable. Indeed, this is a topic that I am going to talk about next month at the annual meeting of the Altoona Blair County Development Corporation.
But it’s not just proximity to a craft brewery that raises property values. Previous studies have shown that being near a Whole Foods, a Trader Joe’s, or a Starbucks also results in higher home’s values. It seems clear that people appreciate being able to walk to a nearby craft brewery, coffee shop, or grocery store. Indeed, a recent study by the American Planning Association found that fifty-six percent of Millennials prefer to live in walkable communities. And, as market research has clearly demonstrated, Millennials are the demographic cohort primarily responsible for the growth of craft beer. Walkability seems to valued by large swathes of American society. The same study found that forty-six percent of active Baby Boomers also prefer to live in walkable neighborhoods.
This semester I am teaching a graduate course in The Geography of Beer and Brewing at the University of Toledo. Students enrolled in the class have to write a term paper. One of the students is writing her paper on the topic of craft breweries and walkability. Walkability is a simple concept really – how friendly is a neighborhood to those who wish to walk to bars, restaurants, grocery stores etc? The walkability score of my neighborhood is 56 (that’s out of a maximum of 100). This makes it “somewhat walkable”, meaning that some of my errands can be accomplished on foot. You can calculate the walkability of your neighborhood by typing in your home address here. The website Walkscore.com identifies a number of factors that determines a neighborhood’s walkability. These include schools and places of employment being within walking distance for most residents, streets being designed with bicyclists, pedestrians, and public transportation in mind, and the provision of plentiful of public spaces where residents can gather and relax. Bekka, my student is focusing on craft breweries in San Diego, CA and is examining the extent to which they are located in walkable neighborhoods. As I write this, she is still in the middle of analyzing the data that she has gathered. I am curious as to what her findings will show.
Just as living near a craft brewery (or a Whole Foods or a Starbucks) may enhance the value of your home, so does living in a walkable neighborhood more generally. The real estate brokerage company Redfin analyzed the impact of walkability on home prices across fourteen major metropolitan areas in the United States. They found that, on average, increasing the Walk Score by just a single point results in a 0.9% increase in home prices.
A potential concern of living near an establishment where alcohol is served is that it could potentially result in more crime in the neighborhood. And there are some studies that have shown higher crime rates in the immediate neighborhoods surrounding bars. This may not be the case when it comes to craft breweries, however. In a previous post guest-blogger Julie Wartell provided data from Portland, OR which suggested that crime rates are lower in the immediate environs (within fifty feet) of a craft brewery than in the immediate environs of a regular bar. The explanation as to why this might be the case are unclear. However, it may have something to do with both the attitude of both the craft beer drinker and the craft breweries that sell their beer in their on-site taprooms. According to Kris Spaulding of Brewery Vivant in Grand Rapids, MI, craft beer is “more about enjoying the craft than getting drunk”. As Fritz Hahn, a writer for the Washington Post, stated, “I’d rather drink beer longer, not get drunk faster”. Brewery Vivant also has a four-drink maximum for its patrons. I am not aware of any scientific studies comparing the drinking preferences and habits of craft beer versus non-craft beer drinkers, but my gut feeling is that the observation of Kris Spaulding is not far off the mark.
Later this year, Isabelle and I (in collaboration with another colleague) hope to expand our analysis of craft breweries and property values to include more cities. At the moment we do not know how many cities we will include in our expanded analysis, or what those cities will be. But I expect that we will include cities in different parts of the country, cities of different sizes, and cities on different socio-economic trajectories (e.g., shrinking versus growing cities). By doing so, we will be able to draw conclusions that are more generalizable. Watch this space!
Further Reading:
Nilsson, Isabelle and Neil Reid. 2019. The value of a craft brewery: On the relationship between craft breweries and property values. Growth and Change, https://doi.org/10.1111/grow.12292
