Grow houses crop up in foreclosures

Marijuana growers are buying or renting bank-owned homes, hiding in plain sight in the suburbs of Northern California and elsewhere.

By MSN Money Partner May 7, 2012 5:22PM

This post comes from Marilyn Lewis of MSN Money.


Image: Marijuana (© Halfdark/fStop/Getty Images)Cheap bank-owned homes in once pricey Northern California suburbs are luring low-flying marijuana farmers away from low-income and rural neighborhoods where they used to operate.


Upscale homes that sold for as much as $1 million before the housing bust "have been turned into grow houses, equipped with the high-intensity lights, water and air-filtering systems necessary to produce potent, high-quality marijuana," The New York Times reports.


MSN Real Estate, in another article on the phenomenon, says "the houses are often in places you'd hardly suspect, such as gated Florida communities and upscale Georgia neighborhoods -- even Beverly Hills, Calif."


The indoors farms often go undetected until fire breaks out from unsafe wiring. The Times tells of a Vallejo, Calif., resident who stumbled on a grow operation when he knocked on the door of a neighboring home to let residents know their home was burning. No one was inside. Firefighters found the five-bedroom, 2,251-square-foot home filled with plants and growing equipment:

"They just blended right in," Mr. Snowden said of the residents. "They left early for work and came back late in the afternoon. They mowed their lawn, took out their trash and got groceries. There was never any extra foot traffic."

Problems in Northern California

Growers buy or rent bank-owned properties for a fraction of pre-bust prices. They quietly blend their operations into the surrounding neighborhood. Vietnamese-American crime groups are especially active in the market in Northern California, the Times reports.


In California, the legalization of medical marijuana has fostered a more tolerant climate, and grow operations are not pursued and shut down as vigorously as they once were.


In Pittsburg, Calif., 40 miles northeast of San Francisco, the Times tells how growers took over a five-bedroom home across the street from an elementary school. The home was part of "a sprawling, luxurious community" where properties selling for $1 million in 2007 had fallen into foreclosure. After police busted the grow house in 2010, it became a family home again, selling for $363,000. (Post continues below video.)

Cash-strapped California police departments are struggling to combat the problem. Indoor farms are cropping up in financially troubled towns like Vallejo, which declared bankruptcy in 2008. The Times reports:

"Ten years ago if there was a grow house, we'd seize all their equipment and lamps, and they would be prosecuted," said Sgt. Jeff Bassett, a spokesman for the Vallejo Police Department. "Now the chances of being caught, or of being prosecuted if you are, are substantially less than they were 10 years ago."

Profit motive

Lucrative prices for marijuana make the business super attractive. Marijuana grown indoors fetches up to twice the price of outdoor-grown varieties, the Times says. California has become a magnet for the industry:

California accounted for more than 70% of all marijuana plants confiscated nationwide in 2010, the last year for which statistics are available, according to the Drug Enforcement Administration. The authorities seized 188,297 plants at 791 indoor grow houses, compared with 107,047 plants at 572 locations in 2005.

MSN Real Estate outlines the potential profits:

How can growers afford such high rent? It's easy. With only 50 plants in a house, and at least three growing cycles a year, growers can easily net as much as $300,000 a year from sales to dispensaries and buds sold on the black market, says Ron Brooks, president of the National Narcotics Officers' Associations' Coalition.
"Marijuana is so lucrative as a crop," he says, and it carries less prison-time risk than other drugs.

Florida, too, is seeing a flourishing indoor-growing industry. In 2009, the state had the greatest number of indoor marijuana grow sites seized. It had the second-largest number of plants confiscated, according to U.S. Department of Justice statistics cited in this news release by a "cannabis cultivation defense attorney" in Florida's Palm Bay area. Penalties for growing became tougher after the Florida Legislature passed a "Marijuana Grow House Eradication Act" in 2008, the release says.


Trouble for neighbors, homebuyers

Grow houses make problems for neighborhoods and for subsequent buyers of the properties, even when they operate so quietly that no one knows they're there, MSN Real Estate says.


Besides the risk of fire in the neighborhood from faulty wiring in grow houses, properties often are poorly kept up, diminishing a neighborhood's attractiveness and dragging down the value of surrounding properties. Gang shootings sometimes erupt from drug and money disputes.

For buyers of former grow homes, mold and mildew may saturate the inside walls long after a high-humidity indoors farm has been dismantled. Sellers and real-estate agents are required to disclose a home's criminal past, but buyers can help themselves by doing some old-fashioned leg work and using common sense, paying special attention in towns where grow houses have been a problem.


To protect themselves, buyers should have a home professionally inspected before making a purchase, MSN Real Estate says. Shoppers can chat with neighbors to learn the history of the house and ask local police departments to search their records for a history of illegal activity at the address.


More from MSN Money:


May 7, 2012 6:54PM

let every household owned a plant or two and nobody would buy them anymore.


May 7, 2012 6:39PM
only a HUGE cash cow cause we refuse (as a society) to admit this commodity should be "de- criminalized" and regulated supply and distribution should be legalized........BUT....
May 7, 2012 7:21PM
The government has its collective head so far up its butt, it can bite its own tonsils. The feds say that no matter what the state tells you, it is illegal, but the VA will use it in the states which allow medical use. If it was legal for adults, like alcohol, and taxed, the criminals wouldn't be able to make a fortune smuggling it in. This would also free law enforcement to pursue more dangerous stuff. Same as prohibition back in the 20s. I never heard of anybody overdosing on marijuana, either. There are a lot of criminals who claim to have done their crimes because they were high, but they are relying on other peoples' ignorance.  In over 40 years of adulthood, I have seen everything, I think, and alcohol has killed more people, and ruined more lives than ALL other types of drugs. But for some reason it has been singled out as socially acceptable. I have worked with stoners, and drunks, and the drunks are the ones who will kill you. I guess you should have to get a permit to use any drug for recreation.
May 7, 2012 7:52PM
"They just blended right in," Mr. Snowden said of the residents. "They left early for work and came back late in the afternoon. They mowed their lawn, took out their trash and got groceries. There was never any extra foot traffic."

What a bunch of crazy menaces! We must throw them in cages! How dare they work 8-5, take care of their landscape and buy groceries!

But seriously, potheads are normal people. Can't we just get over this?
May 7, 2012 7:25PM

When will America finally see that the emperor wears no clothes?

May 7, 2012 9:52PM
State Police in California have no problem following the letter of the law when it comes to traffic violations.  San Diego Police will give you a ticket for stopping at a stop sign for 2.5 seconds, when the law states that a full 3 seconds are required.  So why is it that they go after marijuana the way that they do?  Why do they cooperate with the DEA and raid dispensaries?  Why is the San Diego district attorney anti-pot?  The DA ran on a pro-medical-marijuana platform and won, now she busts marijuana shops in the city.

Why should we pay taxes anymore?  Our money does not go to our schools or citizens in need.  It goes to subsidize McDonalds and oil companies.  It goes to bankers and millionaires.  it funds wars we don't support and the military industrial complex.  It goes towards unconstitutional spying on US citizens and fighting a losing drug war.  

We The People are ****ed.      
May 7, 2012 9:47PM
I agree...potheads are functioning doctors, lawyers, nurses, artists and decent people...This stereotype of ill functioning  folk is ridiculous. Like ANYTHING, some people take it to an extreme...slackers are slackers...BUT many many people that smoke herb (NOT A DRUG) are not slackers and are professionals... Grow houses for this amazing medicinal herb seems fine with NEEDS TO BE LEGAL....enough is enough of this insanity.
May 7, 2012 8:10PM

Legalize pot once and for all, not just 'medical marijuana patients' who, in my opinion, do just as much to endorse the mythology of marijuana as the anti legalization crowd.

With the condition this country is in, there are far more pressing issues that LEO's should be addressing than people who want to get stoned.

May 7, 2012 6:46PM
Nothing new... Nevada has been this way for years. The police just ignore it... no problem!
May 7, 2012 7:22PM
I always said in troubled times I would do whatever it takes.  Are they hiring?
May 7, 2012 7:22PM
Well, thats one way to pay the mortgage LOL!!
May 7, 2012 8:40PM
   Here's just ONE GOOD REASON! to Legalize Marijuana! That way we could "GROW OUR OWN" Plants at Home in our Outdoor Gardens where it's a lot Safer & Natural Sun Light for the plants!    Also Fellow Readers: Please! Go to Change .org and Sign a Petition that Supports The Legalization of Marijuana or Medical Marijuana! and "Remember; That When We Stand Together!  We Can Make A Change!"  
May 7, 2012 10:53PM
There a number of errors in this piece, including the nonsense about a grow house across from a school (Were some of the customers kids?  I think not) as well as the notion of high humidity (Wrong!  Mold on the walls also equates to mold on the plants, just what a grower doesn't want) and so on.  Obviously this writer pulled some of his "facts" from an orifice in his nether regions.  Gang shootings?  Who is this guy, George Zimmerman's cousin?  What a bunch of crap. 
May 7, 2012 9:21PM
The anti-marijuana zealots can kiss my 58 year old **** ! It's only a matter of time before it's legal on both a state & federal level as changing public attitudes demand rational policies regarding this gift from God !
May 7, 2012 10:28PM

If you legalize marijuana this would never happen

1.People would grow their own in their own back yard (cause sunlight is free) and there would be no need for "faulty wiring".

2.The UNBELIEVEABLY FREQUENT(sarcasm) pot related suburban gang shootouts that we hear of  EVERY DAY (again, sarcasm) would be nonexistant because there would be no $ in it for them.

3. Those "financially straped" towns where houses sell for millions could make money off marijuana and thus no longer be financially strapped.(really? houses worth millions and theyre financialy strapped?)(but the rich pay too many taxes as it is) (again sarcasm).




May 8, 2012 12:04AM

Notice how the overwhelming majority of comments are pro pot???

Our Government is the real criminal here.

May 7, 2012 9:11PM
We need laws for housing. One is needed to eliminate speculation on single family residences only. It would be aided by a plan that restricts sales only to owner/occupants and not investors or foreign real estate investment trusts who buy them for flipping or as slum lords. That way regular working families do not have to compete with drug dealers or corporate speculators for affordable homes. Values would reflect a true housing demand rather than that which is artificially inflated.
If the insiders want to control real estate let them knock themselves out over commercial properties. 
May 7, 2012 8:13PM

1mo1: "Liberal policies and liberal states. What else would you expect? Reap what you sow?"


............a really intellectual, the states with the most meth production are the southern and red states, with Missouri being the hot bed of meth.  How smart are you now, red neck Beck Limbaugh mouth breather?

May 8, 2012 12:33AM
excuse me but if i OWN my home and I have a LEGAL medical marijuana card (plus a legit reason for one) both my legs have permanent metal fixtures from a car accident a few years ago and I grow enough for me then its my business what I do on my property and not yours. People need to knock off their high and mighty attitudes over pot because of the way its construed in t.v. and movies... sometimes even on these blogs with the idiot stoners who have unfortunately smoked themselves stupid. There are some of us who need it and have legitimate reasons for it... It harms your body a lot less then vicodin or norcos or oxycotton... Seriously get your heads out of your a****...
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