‘Fake Farms’ Are Squeezing Out Serious Agriculture Potential In Hawaiʻi
Some developers have turned acreage earmarked for farming into high-end luxury homes with high prices and restrictions on what the land can be used for.
By Stewart Yerton Claire Caulfield / March 15, 2021
On its face the Olomana Heights development in Kailua seems like just another expensive gated community in the making, with vacant lots starting at $1.1 million and a sign imploring potential buyers to “discover your pathway to adventure.”
But Olomana Heights is actually built on property meant for activities like farming and ranching. Its 23 lots are part of a relatively small island of land designated for agricultural use amid a sea of urban and conservation land that makes up almost all of the eastern half of Oahu.
Housing developments on land set aside for agriculture are nothing new and generally legal, even if no significant farming takes place there.
But Hawaii policymakers are making a concerted push to change that.
“We’ve got so many subdivisions on ag land on Hawaii island you just can’t ignore the issue,” said Rep. David Tarnas, a Big Island lawmaker who sponsored a House measure that seeks to put a lid on residential developments on land meant for agriculture. “It has reached a point where we have to do something about it.”
The Olomana Heights residential development is offering lots starting at $1 million for two acres. But is using farmland for luxury homes a good thing when the state is trying to grow more of the food it consumes? Stewart Yerton/Civil Beat
Sen. Mike Gabbard, who sponsored an identical bill in the Senate, said the measures are meant to “address the growing problem of fake farms across the state, which take up agricultural lands for gentlemen estates.”
Olomana Heights’ developer, Chad Waters, declined to comment; however, an email from his firm asserted that soil quality is such that the House and Senate bills would have had no effect on the development.
Loopholes And Profit Drive Use Of Ag Land For Homes
How Hawaii has become a haven for high-end residential development on ag lands is a simple function of economic forces and land-use laws.
The state-level land classification scheme and county-level zoning laws generally allow farm dwellings, defined as single-family homes where owners can live on the land they farm. But that definition is broad, meaning a house doesn’t have to be merely an accessory to a working farm, but instead can be mainly a residence as long as there’s some token agricultural activity going on.
Combine this loophole with a desire to make money – landowners can generally make more using land for luxury homes than for growing crops – and it’s easy to see why fake farms have proliferated.
In the case of Olomana Heights, it’s clear the development recognizes that it is located on land meant for agriculture.
According to Curtis Lum, a spokesman for the Honolulu Department of Planning and Permitting, proposed agricultural uses for the “farm dwellings” in Olomana Heights are shown in approved building permit plans.
“The plans call for planting of fruit trees, vegetables and herbs,” Lum said.
The county ordinance allows for many other uses without a special permit, including aquaculture, composting, roadside stands, sawmills and livestock grazing and production.
But whether Olomana Heights would allow such messy activities in a neighborhood of homes where the lots start at a million bucks would be up to the neighborhood, not the county.
According to a document filed with the state Bureau of Conveyances outlining covenants and rules for the neighborhood, each property owner must submit an agricultural plan and submit it to a three- to five-person “Agricultural Review Committee” of homeowners for approval.
The rules don’t provide much detail about what kind of activity is allowed. Instead, they give the committee “sole discretion to make final, conclusive, and binding determinations on matters of agricultural and landscaping judgment.”
Small Kine Farm’s Fung Yang considered buying a lot in Olomana Heights for his mushroom farm, but said the only way to make the venture work would be to build a house and rent it out for income rather than living there himself. Cory Lum/Civil Beat
While the specter of running afoul of the committee might discourage a farmer hoping to set up, say, a smelly pig farm in Olomana Heights, the greater concern for farmers is the cost of land.
Two miles away from Olomana Heights, tucked near the foot of the Koolaus in Waimanalo, Fung Yang runs his organic mushroom operation, Small Kine Farm.
With big heaps of mouldering compost and big trucks occasionally hauling wood waste onto the property, it’s a smelly and at times noisy operation. But it’s also small, about one-fifth of an acre, because Yang grows his mushrooms on racks in dark, refrigerated shipping containers.
Yang said he considered buying a two-acre lot in Olomana Heights and moving his operation there, with half the lot for his farm and the other for a house and a buffer between it and the mushroom operation. But given the cost of land, he said, the only way to make the venture work would be to rent out the house and use the income to help service his mortgage. Actually living in Olomana Heights and running his farm there was out of the question, he said.
Instead, he has another idea.
Yang said he thinks his best bet will be to find some agriculture property near something nobody would want to live next to, like a highway or sewage treatment plant. He’s already found such a site, he said. And although it’s listed at around $500,000 an acre, Yang thinks he can get a better deal by convincing the owner that no person will want to build a luxury home next to a nuisance.
“Basically, I have to be creative,” he says.
Nick Wong, co-founder of Beer Lab HI, has been searching for land so he can grow more of the produce he uses for his beer and food served at his three Oahu locations. Stewart Yerton/Civil Beat
Nick Wong, co-founder of Beer Lab HI, has noticed the same issue: to afford farm land on Oahu, he’ll need to use it for more than farming.
A former nuclear engineer who started brewing beer as a hobby, Wong has a dream of at least partially vertically integrating his operations by starting a farm. That would mean employing even more workers – Beer Lab has about 35 now – and keeping money in the local economy.
With three Beer Lab locations on Oahu, Wong has ample demand for produce — for beer and bar food. But he said farmland is just too expensive, given that he’s competing for it with luxury housing developers.
The only way to make a venture pencil out, Wong said, is to be able to build a brewery and pub at the farm, which he said zoning laws generally wouldn’t allow without a variance or special permit, which is far from a sure thing.
“I’m not going to buy a $2 million or $3 million property with the hope that I’ll be able to use the land how I need to be able to use it to make money,” he said. “It’s where I have to draw the line in trying to save the world.”
Famers point to another problem with dividing land into small parcels for homes: even 2-acre lots allowed by Oahu’s land-use law are too small for farming.
Homes in Olomana Heights should have some sort of farming even if its growing fruit trees, according to city permits. But the 2-acre lots are too small to accommodate significant farming activity. Nathan Eagle/Civil Beat
Brian Miyamoto, executive director of the Hawaii Farm Bureau, said tamping down on fake farms is a way to keep agricultural land from being divided up into small parcels.
“Larger tracts of land provide economies of scale so that farmers can efficiently produce food,” he said. “It allows them to diversify, to fallow the land between crops for better productivity and less pest pressure.”
The situation is even more pronounced for ranchers.
Hunter Heaivilin, a food system resilience consultant with the Hawaii Public Health Institute and a long-time food system planner in Honolulu, agrees it is important to keep farmland from being cut into small lots.
“If agricultural zoning efforts don’t conserve parcel size into a productive unit then … it’s like Humpty Dumpty,” he said. “Once you break apart these large parcels, you’re not going to be able to put them back together again.”
Bills To Close Loopholes Have Wide Support
The House and Senate bills are meant to address precisely such challenges facing farmers.
The bills are the result of a multi-year process that included three meetings, organized by the state Planning Office, with farmers and some of Hawaii’s most powerful interests, including Kamehameha Schools, the state’s largest private landowner, and the Land Use Research Foundation, a lobbying group for developers.
The report to the Legislature published in December outlined several objectives. One was to keep suitable ag lands for agriculture, recognizing that not all agriculture lands are suitable for farming. Another objective was to “keep agricultural lands affordable for farming.”
“Non-agricultural uses drive up the cost of agricultural lands making it difficult for farmers to own or lease lands,” the report found, echoing people like Yang and Wong. “Farmers also need affordable housing for themselves and farm workers.”
Rep. David Tarnas, author of a House bill to address fake farms, said he is encouraged by the measure’s widespread support. Jonathan Rawle
To that end, the bills make changes designed to make it harder to subdivide land into small parcels to make fake farms. The measures also tweak the state’s condominium law, something that can also be used to effectively subdivide land without going through the more expensive subdivision process, which is governed by counties.
The bills also tighten the definition of “farm dwelling.” A farm house would have to be truly an accessory to a farm, and farm operations would have to produce at least $10,000 annually.
The measure has support from the state Department of Agriculture, the Maui County Council, the Honolulu Department of Planning and Permitting and the Hawaii Cattleman’s Council.
In testimony supporting the bill, Miyamoto wrote, “Lands zoned for agriculture should be used primarily for productive agricultural purposes, including family farming.”
The only party raising much concern at all is the Hawaii Department of Taxation, which testified state general excise tax filings don’t provide the necessary information to determine compliance with the $10,000-provision.
Still, the generally widespread support is encouraging to Tarnas, the author of the House bill.
“For me this is serious business, because we have to improve food security for the state, and we’re not going to do that unless we protect bona fide agriculture,” he said.
“Hawaii Grown” is funded in part by grants from the Ulupono Fund at the Hawaii Community Foundation, the Marisla Fund at the Hawaii Community Foundation, and the Frost Family Foundation.
