Will Prop. 64 price you out of a home?

Posted at 6:06 PM, Oct 27, 2016
and last updated 2016-10-27 21:45:51-04

On November 8, Californians will vote on Proposition 64, which would legalize marijuana for recreational use for adults 21 and older.

10News Anchor Steve Atkinson traveled to Denver, Colorado -- where recreational marijuana has been legal since 2012 -- to see how Coloradans are dealing with the issue. He discovered legal weed also impacts the housing industry.

Just drive through Denver and you get the impression this city is thriving. Growth is everywhere and many would say that's due to the "Green Rush" -- the booming industry that is legal marijuana.

And that's good for guys like Bob Costello.

"Well, I've inhaled. So, I'll say that," said Costello, who is a realtor for 420 Realty Broker.

"Well, 420 is the magic word for smoking pot," added Costello with a sly smile.

Costello gets it. When marijuana was legalized in Colorado in 2012, he was first to jump on the bandwagon.

"I became kind of an expert in the grow warehouse industry," Costello said confidently.

Costello brokered and built several of the legal marijuana grow warehouses that helped drive Denver out of the recession. But he also owns several rental houses and said legal marijuana has had a major impact on the housing industry where the state allows up to six plants to be grown in a single home.

"I get calls all the time," Costello said, pretending to take a call. "The classic would be, 'Hi, I've been growing illegally in this state for years and I want to come to Colorado and grow legally.'"

And that incentive is what lures people to Colorado, driving up housing costs.

"There are people in town renting out their houses for pretty much double rent. A house that might rent for $2,000 a month will go for $4,000 a month and allow a grow," said Costello.

Now imagine that in San Diego, where housing affordability and availability already feel maxed out. And that's not all.

"There have been some problems. There have been some fires," said Costello.

He's talking about homes where the owner or tenants were growing more than six plants and didn't have the proper electrical wiring or ventilation. Costello added this can create even larger financial problems.

"There have been issues with insurance companies declining payment on claims because it was an illegal operation that caused the fire," Costello said.

And yet, despite these issues growth continues. The "Green Rush" is on in Colorado, and Costello is cashing in.

"There are people who think it's terrible what I do, That I'm ruining America," Costello said. "And I actually say, 'No, I'm being an American. I'm making money. It's called capitalism so deal with it.'"