Strip Clubs, “Secondary Effects” and Residential Property Prices
Taggert J. Brooks,
Brad Humphreys and
Real Estate Economics, 2020, vol. 48, issue 3, 850-885
Municipalities regulate sexually oriented businesses (SOBs) through the “secondary effects” doctrine, which justifies limiting First Amendment speech protections inside SOBs. Negative effects of SOBs on nearby neighborhood quality are a frequently cited secondary effect. Little empirical evidence exists that SOBs generate such negative externalities. If SOBs generate negative externalities, then nearby property prices should decrease when a strip club opens. We estimate regression models of housing prices to determine the effect of new clubs on nearby residential property prices in Seattle, exploiting the termination of a 17‐year moratorium on openings and find no evidence that strip clubs have “secondary effects.”
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