Organic Farms as Subdivision Amenities
SOUTH BURLINGTON, Vt. - The bewildered Iowan who converted his farm into a ballpark in "Field of Dreams" in 1989 might reverse the move today. From Vermont to central California, developers are creating subdivisions around organic farms to attract buyers. If you plant it, these developers believe, they will buy.
Increasingly, subdivisions, usually master-planned developments at which buyers buy home sites or raw land, have been treating farms as an amenity. "There are currently at least 200 projects that include agriculture as a key community component," said Ed McMahon, a senior fellow with the Urban Land Institute.
In 2001, investors in a stalled project with an agriculture component outside Boise, Idaho, recruited Frank Martin to take over their development. Mr. Martin had been a manager at Prairie Crossing, a subdivision built around a working farm in the Chicago suburb of Gray's Lake.
By 2008, the 1,756-acre Idaho development had repaid a $12 million loan from the financing arm of General Motors; realized a 61 percent premium on the sale of its sites, compared with similar parcels with no farm nearby; and claimed a $2.8 million pretax profit by selling 785 of 800 lots, while keeping 1,000 acres open.
The success of the two developments proved the concept, and like-minded developers around the country are trying it on inactive farmland and even on formerly industrial land.
"Open space improves the return for a developer," Mr. McMahon said. "We have 16,000 subdivisions around golf courses, where developers found they could charge a lot premium of 25 to 50 percent over comparable tract subdivision. But most people who live on golf courses do not play golf."
The latest variation on this is blending in working agriculture, Mr. McMahon said. Living with a farm, he noted, can bring a buyer permanent views, wholesome activities for children, access to walking and riding trails and inclusion in an epicurean club.
Here in South Burlington, David Scheuer, a developer, runs a firm called Retrovest that specializes in pedestrian-friendly subdivisions. He is adapting the Prairie Crossing model with a 220-acre project called South Village, where he eventually hopes to sell 334 homes at prices of $200,000 to nearly $700,000.
A 16-acre segment of the property, which was not previously used for farming, is now producing lettuce, garlic and other crops, which are harvested for sale to homeowners and others from the area who have joined a local community-supported agriculture group. "Agriculture can be the caboose on the train," Mr. Scheuer said, "and housing can be the engine." Once he is selling 20 homes a year, he said, he hopes to pay the salary of a full-time farmer.
At the 220-home Serenbe project near Atlanta's airport, the cachet of local produce has been added to retiree-friendly businesses, including galleries, a bed-and-breakfast and three restaurants. Steve Nygren, an Atlanta restaurant impresario, started the project on his 900-acre farm.
"We preserved forest and pasture, and there were 20 acres left for an organic farm, and we also have a large wildflower meadow," Mr. Nygren said. "We've set up the design so 90 percent of the houses back up to one of those natural amenities. We are selling our lots at a premium that's probably three times what the raw lot is."
Mr. Nygren has focused Serenbe's second phase on "edible landscaping," he said. "At street corners there are blueberry bushes, fig bushes, peach trees and spotted apple trees."
And in more rural areas, developers are buying big tracts of ranchland and selling small lots to buyers. David Hamilton, a principal in Qroe Farm Preservation Development, is pursuing this approach at the sprawling Bundoran Farm subdivision outside Charlottesville, Va. "We go through a mapping process to see functional agricultural units, if they are good for apples or cattle or whatever, then see where they go together.
Qroe (pronounced "crow") leases some of the land to cattle ranchers and orchard managers. A buyer of a home site hires a builder from a developer-approved list. Qroe is marketing lots of under four acres for less than $400,000, Mr. Hamilton said. "You're buying two acres but access to 2,000 acres," he said.
Grady Lewis, a Virginia native who closed on his 2.67-acre lot in 2007 and moved into his 1,800-square-foot house at Bundoran with his wife, Diane, this spring, responded to Qroe's idea of preserving "rural quality."
When all the house lots have been sold, the rental income from the farmers, which currently goes to the developer, will go to the homeowners' association. "Beyond it being great to see 300 head of Angus scattered across the acres," Mr. Lewis said, "it's a cash-flow issue."
Farm-focused developers must juggle financing a few houses at a time with cultivating crops on a yearly cycle, so many rent farmland to professionals.
Mr. Scheuer hired David Miskell, a veteran Vermont organic farmer with a white beard, to help convert the property's damaged soil. Working organically, which Mr. Miskell translates to "a lot of manure," he and two hired farmers replenished the soil with enough nitrogen to grow greens, root crops and sunflowers this year. "Upfront costs are high to build fertility, but I doubt they are any higher than any golf course," Mr. Miskell said. "Mainly, we are growing healthy organic food for healthy homeowners."
Gus Burti, who lives with his wife, Maggie, at South Village, says the farm helped clinch their purchase after a two-year search of the area. "We used to live on a golf course in North Carolina and wanted to come back to Vermont," he said. "My wife loves to cook, and we like that it's organic."
Because a farm's open space takes land from the tax rolls, a developer often donates some land for public use. Hidden Springs sold a parcel to the local school district for $10,000, and Retrovest deeded South Burlington some land with road frontage for a soccer field and playground.
But developers stress that their housing units should stand on their own for the idea of the farm-as-amenity to click.
Mr. Scheuer, driving around a competing subdivision with nondescript open space, is convinced that despite the work that goes into a farm, it adds real value to a development. Scoffing at the look of the traditional development, he said, "If I have to do this to make money, I'll find some other way to spend my time."