Texas markets

If Roe v. Wade is canceled, what will happen to real estate markets in states with “trigger” laws that will immediately ban abortion?

Good schools, affordable homes, walkable neighborhoods – these are some of the many attributes that most Americans probably consider when choosing to buy a home.

As for politics, chances are it’s not a major concern for the average buyer. But an upcoming Supreme Court ruling could have the potential to change that.

On Monday, Politico reported that the nation’s top court could overturn the landmark Roe v. Wade who legalized abortion nationwide. The report was based on a draft opinion written by Supreme Court Justice Samuel Alito, which Chief Justice John Roberts confirmed was an authentic but not yet final draft opinion.

The notice relates to a case related to a Mississippi law that sought to ban most abortions after 15 weeks of pregnancy. If the court decides to act on the opinion that Alito wrote in the draft that was distributed, abortion would no longer be protected at the federal level.

Also see: ‘Many of us don’t realize how borderline the number of people living are: If Roe v. Wade canceled, abortion rights advocates warn of economic cost to women

Instead, states would set their own policies regarding the procedure — and many would likely ban it immediately. Idaho, Kentucky, Louisiana, Missouri, North Dakota, South Dakota, Tennessee, Texas, Utah and Wyoming all have laws in place that would “trigger” a ban on abortion if the Roe decision were overturned. Additionally, several states, including Alabama, Arkansas, Arizona, Michigan, Mississippi, North Carolina, Oklahoma, West Virginia, and Wisconsin, have laws prohibiting abortion. Some of these laws predate the Roe case, while others were passed afterward but did not come into force due to Supreme Court precedent.

Across the country, more than a dozen states have “trigger” laws that would ban abortion if the Supreme Court overturns Roe v. Wade.

“Some 23 states have laws or policies that regulate abortion providers…all apply to clinics that perform surgical abortions, while regulations in 13 states apply to doctors’ offices where abortions are performed. “said the Guttmacher Institute, a reproductive health think tank that supports abortion rights, said in a report.

Most of these states are located in the Sunbelt and Rocky Mountain regions — areas of the country that have seen their popularity skyrocket among homebuyers in recent years. The question now is whether housing markets in states like Texas, Arizona and Florida – which could ban or severely limit the availability of abortions – can withstand this political test.

Deciphering the “big sort”

For years, housing analysts and economists have debated the role politics plays in deciding where to live and how choosing where to live affects politics.

The big sorta controversial book published in 2008 by journalist Bill Bishop and university professor Robert Cushing, argued that Americans were increasingly opting to move to neighborhoods populated by like-minded people.

And if you ask Americans, they’ll probably tell you that’s the case. A Realtor.com October 2020 Survey found that 55% of people thought it was important to live in a place where people have similar political views. Young people were more likely to say that political kinship with their neighbors was important.

“If I want to live somewhere where I can walk to Whole Foods, that’s an economical lifestyle choice.”


— Taylor Marr, Deputy Chief Economist at Redfin

Despite this, that same survey found that only 42% of respondents said they lived in communities that reflected their views, while 28% said their neighborhoods actually held opposing views. And the migration trends that have emerged during the COVID-19 pandemic suggest that politics is not a priority when Americans choose to buy homes.

“During the pandemic, we’ve seen many Americans move from Democratic-leaning urban downtowns to more Republican suburban and rural communities,” said George Ratiu, head of economic research at Realtor.com. “However, many of these decisions were based on a broader set of criteria, including health concerns, the availability of remote work, the strength of local market economies, and housing affordability.”

Even to the extent that people end up living in an area where everyone tends to agree on burning issues, it could be basically coincidence.

“If I want to live in a place where I can walk to a Whole Foods, that’s an economic lifestyle choice that happens to be strongly correlated with living in a democratic area,” Redfin RDFN,
+3.53%
said Deputy Chief Economist Taylor Marr. Similarly, someone who wants to own a lot of land and likes to eat at a restaurant like Cracker Barrel may very well end up in a more conservative neighborhood.

The example of North Carolina

However, the relocation of businesses following the overturning of Roe v. Wade would likely have more power to influence home buying decisions.

In recent years, activists have scrutinized corporate actions as they relate to controversial policies. The fallout associated with North Carolina’s “bathroom bill” is a prime example.

The North Carolina Legislature passed House Bill 2, also known as the Public Facilities Privacy and Security Act, in 2016, and it was signed into law by former Republican Governor Pat McCrory. The law stated that people in government buildings, including public schools, could only use restrooms and locker rooms corresponding to the sex they were assigned at birth.

The Associate Press estimated that the bill ended up costing the state about $3.76 billion over 12 years. Several companies including PayPal PYPL,
-4.39%,
Deutsche Bank DB,
-0.51%
and CoStar CSGP Group,
-3.10%
opted out of plans to expand their business footprint in the state as a result of the law, which equates to more than 1,000 jobs that were never created there.

A similar series of events could theoretically occur in states that have already banned abortion or may do so as a result of the Supreme Court ruling. Companies could choose to invest resources in states that allow abortions to continue, which could redirect migration flows away from markets in places like Texas or Florida.

Marr pointed out Apple AAPL,
+0.47%
as a company that could come under such pressure, given that its employees and customers are likely more liberal and the company plans to open a new campus in Raleigh, North Carolina (Apple did not respond to a request for comment.)

Apple has already invested a lot of resources in the North Carolina project, which would be a huge blow if the company abandons the effort. In these cases, companies could take the approach of peers like Amazon AMZN,
-1.40%
or Yelp YELP,
-4.34%
to reimburse travel expenses for workers who live in abortion-banning states and must venture out for treatment.

Even to the extent that companies might want to avoid investing too much in anti-abortion states, the sheer breadth of places in the country where the practice might be banned may limit this.

In the case of the “bathroom bill,” it wasn’t terribly expensive “for most companies to flex some muscle and put pressure on North Carolina,” Marr said.

“It’s harder to do that halfway across the country,” he added.