The Housing Crisis Supports a Growth Industry – But Unfortunately

The Thing That is Being Grown is Marijuana

[Editor’s Note:  Despite the tone of this Post it should be known that The Dismal Political Economist is fanatical in opposition to illegal drugs.]

America’s housing crisis is not a crisis of not enough housing.  It is a crisis of too many houses, too many foreclosures and too many abandonments.  And in another in a long line of many examples, it is now an illustration of the Law of Unintended Consequences.

Some political candidates like Mitt Romney have advocated an acceleration rather than a slowdown of the foreclosure process for people who are unable to make their mortgage payments.  Yes this results in depriving families of their homes, but the rationale in the minds of policy advocates is that this process will reduce the time it will take to return the housing market to normalcy.  The fact that despite the huge numbers of foreclosures that have taken place in the last several years has not returned the housing market to prosperity in no way figures into their position on this issue.

Now it turns out that at least in some parts of the nation the housing crisis is having the effect of increasing the use of residential housing as sites for growing illegal drugs.



Marijuana Growth in Nevada



In neighborhoods where residents may be as transient as crowds in a subway station, growers are rarely questioned about dark windows and empty driveways. Those are also hallmarks of abandoned homes, of which America's foreclosure capital has plenty. "I don't know anybody here, and I don't want to stick my nose in their business," an elderly man who lived near the Ballards said one afternoon. Then he shut his door.

The “why” of this is fairly simple.  It’s the economics of drugs, stupid.

Much of the marijuana produced in the United States and Mexico is grown outdoors, experts say. But those who grow hydroponic marijuana indoors can better control temperature and light and produce a higher-grade product. While a pound of Mexican marijuana sells for at least $750, said DEA spokesman Jeffrey Scott, a pound of hydroponic marijuana sells for at least $3,000.

So in Nevada, which has the largest housing and foreclosure problems in the nation

Last year, authorities took down 153 indoor grow sites in Nevada and seized more than 13,000 plants, compared with 18 sites and 1,000 plants in 2005, the U.S. Drug Enforcement Administration said. (By comparison, California busted 791 indoor sites last year.)

"You can't have crime without opportunity," said William Sousa, a criminologist at the University of Nevada, Las Vegas. "And all those empty homes present an opportunity for criminal activity."

The results of the policies supported by Mr. Romney and others are that illegal drug production (and probably usage) are increased.  One could reasonably say that those who advocate more rather than less foreclosures are supporting a policy that results in more rather than less illegal drugs.   But that would not be fair, because people who support policies to evict families from their homes live in a world of blissful ignorance, and don’t really know or care what their policy prescriptions result in.