A Modest Pot-posal

Marijuana reparations: A vehicle for housing reform in California?

City Terrain Editorial West
California should direct recreational marijuana revenues to the development of affordable and market rate housing. (Courtesy Abbie Bernet)
California should direct recreational marijuana revenues to the development of affordable and market rate housing. (Courtesy Abbie Bernet)

If it seems like legalized recreational marijuana’s potential to instigate positive social change at the urban scale is little more than a pipe dream, think again.

Several states and municipalities are already experimenting with innovative uses for legal marijuana revenues that hint at a possible urban dimension to the notion of so-called “marijuana reparations,” but these efforts do not go far enough.

One approach comes from the state of Colorado, where lawmakers are working to change state law to allow municipalities to spend tax revenues raised via recreational marijuana sales to build new units of affordable housing for individuals experiencing homelessness. Officials there see a recent rise in homelessness as being related to the legal marijuana trade and are looking to utilize revenues from booming marijuana sales to fund re-housing and recovery efforts. The plan, if enacted, would seek to redirect $12.3 million in revenue—legal weed sales brought in $199 million in tax revenue in 2016—to build roughly 1,500 affordable housing units over the next five years.

Oakland, California, on the other hand, is aiming to increase access to marijuana sales licenses via its equity permit program. That program aims to streamline the process by which formerly-incarcerated individuals who were jailed for marijuana-related crimes can apply for licenses to sell recreational marijuana. City Lab reports that by Oakland’s official estimates, African Americans made up 77 percent of marijuana-related arrests in the city during 2015. With such skewed figures, whites made up only seven percent of arrests for marijuana-related crimes that year while Latinos made up 15% of arrestees. The city is banking that by earmarking legal marijuana permits for formerly incarcerated individuals, some of those who suffered the most under the war on drugs will be some of the first to benefit from changing laws.

These types of changes are a positive first step, but they do not go far enough in addressing the inequality engendered by the discriminatory racial paradigm that launched the war on drugs in the first place.



Simply put, state and local municipalities have a moral, social, and financial obligation to rectify the impacts of the decades-long war on drugs that has unnecessarily criminalized African American and Latino communities across the country. The majority of people in prison are currently incarcerated at the state level, often due to local policing efforts.

In the United States, the effects of racism on housing discrimination and incarceration rates are ongoing and well-documented. The intimately-related nature of post-World War II redlining practices, coupled with the facilitation of concentrated urban poverty by the interstate highway system, are directly responsible for the ease with which hostile policing and drug enforcement practices have been able to tear into communities of color left behind by suburbanization. Recent episodes of police brutality against people of color—and African Americans, in particular—point directly to the historical legacies that racist land use and policing policies have left on many communities to this very day.

The historical legacy of these initiatives has also set up the parameters through which contemporary gentrification has been allowed to take hold in American cities. States and local municipalities are on the hook for limiting housing production over the last several decades. States like California have done an abysmal job facilitating housing production for years, a phenomenon that has created the rampant unaffordability crisis that is choking working class populations—the same groups suffering under draconian criminal policies—in major cities and small towns alike.

Given these connections, it’s clear to see that the time to lay the groundwork for bold action is now; municipalities can no longer treat unaffordability and mass-incarceration as separate issues to be addressed piecemeal because they are a product of the same system of oppression.

Here’s an idea for a holistic approach: What if states were to combine social justice–minded marijuana reparations efforts with housing market reform, as well?

First, states like California should expand Oakland’s equity permit program to as many municipalities as possible, enabling at least the sales of legalized marijuana to economically benefit marginalized communities. The state should then administer revenues generated from recreational marijuana sales to directly incentivize the development of affordable and market rate housing within a certain proximity—say, one-quarter of a mile—of recreational and medical marijuana dispensaries or production facilities. This effort, if coupled with thoughtful increases in density around these facilities, would double- and triple-up the positive effects of the marijuana trade on marginalized communities by ensuring that new jobs and new housing are brought directly to communities besieged by the drug war. With this proximity-based approach, both urban areas and the rural communities across the state now responsible for growing and processing many cannabis products can benefit, as well.

The state should also facilitate the development of community-based banks—again, located near dispensaries—tasked with providing private financing to individuals, families, business, and housing developers aiming to develop workforce housing within these communities. Formerly incarcerated individuals and their families should be given priority access to these funds, as well, an element could begin to facilitating paths to self-directed home ownership while also embedding more equitable access to financing within these communities.



The potential impact of these policies could be high. In California, for example, recent legalization included levying a 15 percent sales tax on recreational marijuana sales as well as a wholesale tax of $9.25 and $2.75 per ounce on marijuana flowers and leaves, respectively.

Recreational and medical marijuana sales are expected to reach $6.46 billion per year by 2020, potentially generating roughly $1 billion in tax revenues for the state. A rough calculation of the figures given earlier for Colorado’s affordable housing program indicates that state is aiming to spend roughly seven percent of marijuana revenue on supportive housing. Scaled to California’s marijuana economy, that would translate to roughly $70 million for housing reform. That’s a good start and, of course, the seven percent percent figure could go much higher. Additional funding could potentially be leveraged against funding from federal agencies for a larger effect, also. Either way, $70 million would certainly go far in communities that have seen economic disinvestment and marginalization for decades.

Given the monumental shifts in marijuana policy and public opinion and the potential the booming industry has to generate vast amounts of wealth, it is essential that the spoils of legalized marijuana trade not only go to those who have access to capital and privilege necessary to start a marijuana-related business. It is also essential, given the ongoing housing crisis—and that phenomenon’s ties to other aspects of institutionalized racial inequality—that municipalities move to make housing reform a central component of any marijuana reparations program. These funds should be harnessed directly toward increasing business opportunities for individuals caught up by the war on drugs and be put toward the equitable redevelopment of the very communities torn apart by those policies.

Related Stories