Good schools, affordable homes, walkable neighborhoods — these are some of the many attributes that most Americans likely consider when choosing to buy a home.
As for politics, chances are it’s not a major concern to the average home buyer. But an upcoming Supreme Court ruling might have the potential to change that.
This week, Politico reported that the nation’s highest court may strike down the landmark Roe v. Wade ruling that legalized abortion nationwide. The reporting was based on a draft opinion penned by Supreme Court Justice Samuel Alito, which Chief Justice John Roberts confirmed was an authentic but not yet final draft opinion.
The opinion pertains to a case related to a Mississippi law that sought to ban most abortions after 15 weeks of pregnancy. If the court decides to follow through with the opinion Alito wrote in the draft that was circulated, abortion would no longer be protected federally.
Instead, states would set their own policies when it comes to 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 on the books that would “trigger” a ban on abortion if the Roe decision were overturned. Additionally, multiple states including Alabama, Arkansas, Arizona, Michigan, Mississippi, North Carolina, Oklahoma, West Virginia and Wisconsin have laws banning abortion. Some of those laws predate the Roe case, while others were passed afterward but not in effect because of the Supreme Court precedent.
“Across the country, over a dozen states have “trigger” laws that would ban abortion if the Supreme Court reversed Roe v. Wade.”
“Some 23 states have laws or policies that regulate abortion providers …all apply to clinics that perform surgical abortion, while 13 states’ regulations apply to physicians’ offices where abortions are performed,” 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 — parts of the country that have seen their popularity soar among home buyers in recent years. The question now becomes 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 now, housing analysts and economists have debated the role that politics plays in people’s choice of where to live — and how people’s choice of where to live affects politics.
“The Big Sort,” a controversial book published in 2008 by journalist Bill Bishop and college professor Robert Cushing, argued that Americans were increasingly opt to move to neighborhoods populated by like-minded folks.
And if you ask Americans, they’re likely to tell you this is the case. An October 2020 survey from Realtor.com found that 55% of people thought it was important to live in a place where people hold similar political views. Young people were more likely to say that political kinship with their neighbors was important.
“‘If I want to live in a place where I can walk to a Whole Foods, that’s an economic lifestyle choice.’”
Despite that, that same survey found that only 42% of respondents reported living in communities that mirrored their views, while 28% said their neighborhoods actually held opposing views. And migration trends that have played out during the COVID-19 pandemic would suggest that politics aren’t top of mind when Americans choose to purchase a home.
“During the pandemic, we have seen many Americans moving from Democrat-leaning urban downtowns toward suburban and rural communities which lean more Republican,” said George Ratiu, manager of economic research at Realtor.com. “However, many of these decisions were predicated 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 do end up living in an area where everyone tends to agree on hot-button issues, it could essentially be by coincidence.
“If I want to live in a place where I can walk to a Whole Foods, that’s an economic lifestyle choice that just happens to be highly correlated with living in a Democratic area,” Redfin RDFN, +6.83% deputy chief economist Taylor Marr said. By that same token, someone who wants to own a lot of land and likes eating at a restaurant like Cracker Barrel may very well end up in a more conservative area.
The North Carolina example
However, corporate relocation as a result of Roe v. Wade being overturned would likely have more power in influencing the house-buying decisions.
In recent years, activists have scrutinized the actions of corporations insofar as they relate to controversial policies. The fallout associated with North Carolina’s “bathroom bill” is a prime example of that.
North Carolina’s 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 stipulated that individuals in government buildings, including public schools, could only use restrooms and changing facilities that corresponded with the gender they were assigned at birth.
The Associate Press estimated that the bill ended up costing the state around $3.76 billion over 12 years. Multiple companies including PayPal PYPL, +6.11%, Deutsche Bank DB, +2.86% and CoStar Group CSGP, +4.70% opted against plans to expand their corporate footprint to the state as a result of the law, equating to over 1,000 jobs that never ended up being created there.
A similar series of events could theoretically play out in states that have already banned abortion or may do so following the Supreme Court’s ruling. Companies could opt to invest resources in states that allow for abortions to continue, which could redirect migration flows away from markets in places like Texas or Florida.
Marr pointed to Apple AAPL, +3.19% as a company that could see such pressure, given that its employees and customers likely skew more liberal and the company has plans to open a new campus in Raleigh, N.C. (Apple did not respond to a request for comment.)
Apple has already invested a great deal of resources into the North Carolina project, which would be a major blow if the company were to abandon the effort. In these cases, companies could take the approach of peers like Amazon AMZN, +5.73% or Yelp YELP, +3.35% in reimbursing the travel costs for workers who live in states with abortion bans and need to venture to seek medical care.
Even to the extent that companies might want to avoid investing too much in anti-abortion states, the sheer scope of the places around the country where the practice could be banned may limit that.
In the case of the “bathroom bill,” it was not very costly “for most companies to show some muscle and put the pressure on North Carolina,” Marr said.
“It’s harder to do that to half of the country,” he added.