Strip Clubs Open, Neighborhoods Shrug

By Adam Bonislawski

Do strip clubs bring down property values?

A study by economists at West Virginia University and the University of Wisconsin-La Crosse suggests they don’t.

Surveying 317,056 residential sales in Seattle between Jan. 1, 2000, and Dec. 31, 2013, researchers found little evidence strip clubs influenced the prices of nearby homes.

This, note authors Taggert Brooks of UW-La Crosse and Brad Humphreys and Adam Nowak of WVU, runs counter to common arguments underpinning local governments’ rights to restrict strip clubs, which typically hold that such establishments have negative “secondary effects,” including a downward pull on property values.

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The relationship between strip clubs and property values hadn’t been investigated in a systematic way, says Dr. Humphreys. But his past work collecting data on Seattle’s housing market, and a quirk in the city’s strip-club regulations, provided an opportunity to look into the question.

Seattle maintained a moratorium on new strip clubs from 1998 until 2005, when a federal judge ruled the restriction unconstitutional. In 2008, new strip clubs began opening in the city, providing Dr. Humphreys and colleagues with variation in the number and location of clubs to study the effect of the establishments on nearby home prices. Their findings were published on the Social Science Research Network website.

The researchers looked at how home resale prices varied with proximity to strip clubs, whether prices changed on the opening or closing of a club nearby, and whether specific clubs had effects on their local housing markets.

Some types of homes showed significant variation. Condos within 1,000 feet of a club sold for 5.5% less than those more than 2,000 feet away; single-family homes within 2,000 feet sold for 4.8% more than those more than 2,000 feet away…

Read full article here: http://www.wsj.com/articles/strip-clubs-open-neighborhoods-shrug-1471448672