The craft-beer boom in Charlotte is lifting home values in certain neighborhoods.
That’s according to a new report from the University of Toledo, which used Charlotte as a case study. According to the report, when a brewery opened within a half mile, the sales price of a single-family home increased almost 10% in areas close to the city center, such as NoDa and South End.
The report examined homes sold between 2002-2017. According to the report, 21 breweries opened in the Charlotte region between March 2009 and October 2016. In recent years, the pace of brewery openings quickened: 14 breweries opened between 2014-2016.
“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, especially to condominiums in center‐city neighborhoods,” the report read.
In Charlotte, breweries have a way of spurring revitalization, as The Charlotte Observer has reported. In neighborhoods all over the city, from West End to Villa Heights, breweries have moved in, repurposing old warehouses and industrial buildings and serving as a marker for hipness.
That hipness is defined as other new business, for instance the restaurants and clothing stores in Atherton Mill, move just a few blocks away from a handful of breweries such as Sycamore and Wooden Robot.
The brewery bonus
New walkable businesses increases the desirability of the neighborhood, driving up home values.
“Our idea is, craft breweries are perceived differently from typical neighborhood bars or liquor stores. They’re seen as a neighborhood amenity,” said Neil Reid, director of the Urban Affairs Center at the University of Toledo and one of the report’s authors.
Another of the report’s authors is Isabelle Nilsson, a professor of geography and earth sciences at UNC Charlotte. Her interest stems from the fact that home values have been surging in areas close to uptown.
Private and public investment, such as the extension of the light rail, has spurred change in close-in neighborhoods even before breweries open. Breweries add to the property-value increase, Nilsson said.
“These areas around breweries have been seeing other changes even before the brewery was open,” she said. “What we find is breweries add on to the premium.”
In recent years, Charlotte has experienced soaring home prices thanks to low inventory and high demand. According to Mecklenburg County’s recent property revaluation, residential property values in the area rose an average of 43 percent since the county’s last revaluation eight years ago. Neighborhoods near uptown saw some of the greatest percent changes, the Observer has reported.
Breweries in Charlotte are often the “pioneer investors” in certain areas, Reid said, meaning they are the first businesses to open up in otherwise sleepy neighborhoods.
The results of the study could help policymakers looking to revise “zoning laws and other regulations promoting the growth of craft breweries” as mechanisms for spurring economic development in cities, Nilsson and Reid said.
The report also found that brewery openings had “no significant impacts” on commercial property values in Charlotte. And it found “no significant impacts” for single-family homes in the suburbs.
‘They bring money’
Rob Speir of Colliers International, an industrial real estate broker, said the report’s results jibe with what he’s seen in Charlotte. Speir has worked with breweries such as Triple C, Sugar Creek and Bold Missy in securing leases.
“People want to be close to where they work and play. I think young professionals drive the brewery industry with their tastes,” he said.
Reid visits dozens of craft breweries nationwide every year, and notes that breweries open in all kinds of spaces, including old churches, auto-body shops and warehouses. Those spaces have often been long neglected, and are in areas where not a lot of other development is underway.
“(Breweries are) very flexible when it comes to space,” Reid said. “Rarely do I run into one that’s a new build.”
Protagonist Clubhouse is one example of a brewery getting creative with its space. The brewery opens Thursday in a 1,700-square-foot space formerly occupied by NoDa Grocery at 35th and North Davidson streets in NoDa.
Mike Salzarulo, one of Protagonist’s owners, said his team has already gotten letters from a handful of other smaller North Carolina towns suggesting that they open in their town. Local officials know that breweries are a catalyst for revitalization of an area, Salzarulo said.
“They know breweries bring people, and they bring money,” he said.
Reid, the report’s co-author, said that the effect of a brewery opening on home values is “a double-edged sword.” It could benefit a homeowner who is trying to sell his or her home.
“On the other hand, if you’re trying to buy into a neighborhood, it may make it more cost prohibitive. If you’re a renter you might be worried about your rent going up,” Reid said. “There’s always a dark side to some things that people perceive as positive.”
This article originally appeared in The Charlotte Observer.