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Kauai

Buying Farm Land on Kauai

How many of us haven’t at some time entertained the idea (except those who have already done so!) of running off to Kauai, buying a few acres, and “living off the land.” A potent fantasy indeed, and for the past several years, one realized only by those with considerably deep pockets vacant agricultural land on Kauai has recently ranged from $100,000 to well over $300,000 per acre (depending on location, views, caliber of neighborhood, etc.); land with a house already on it, obviously, even more.

The recent economic travails, however, are certainly doing their part to bring farming on Kauai back from the realm of fantasy into something verging on do-able for a lot more of us. And as well, these travails are providing motivation – more and more of us just want to chuck everything and revert to a simpler, more sustainable lifestyle.

Acreage on the Big Island has always been more affordable—for one thing, there’s a whole lot more of it; for another, it comes with active lava zones, limited infrastructure, long travel distances, etc… Kauai is like a precious green jewel-box in comparison—much smaller, more accessible, more groomed. The soil is older, the distances smaller, the beaches closer. And it has been much, much more expensive.

Throughout the late ’90’s into this decade, hundreds of acres of Kauai agricultural lands have been divided using Hawaii’s condominium laws into land-condos, or CPRs (Condominium Property Regimes). Many of these lands, some of them old pineapple or cane fields, were no longer being farmed, or were being used for pasture. On Kauai, land zoned for agriculture is allowed approximately 1 home for every 3 acres, so there’s been a proliferation of so-called “Gentlemen Farms”—often large houses built on 2—5 acre parcels with marginal, if any, agricultural activity. These properties were selling from $800,000 into well over $2 million.

The past year, however, has been like living in a time machine, as we watch prices roll back into 2004 levels, then 2003, towards 2002 and ?…. An interesting aspect of this is seeing how prices are not dropping uniformly – different sectors, and different sectors WITHIN those sectors, are behaving differently. For example, we are seeing Princeville condo prices drop much more steeply than, say, Kapaa land. And certain condo complexes in Princeville have dropped much more steeply than other complexes.

For agricultural land, we are in general seeing more impressive drops on the North Shore than in other parts of the island. There may be a couple of reasons for this. For one, land prices on the North Shore had been a lot higher than elsewhere, so they have further to drop. Many of the Sellers on the North Shore may also have more financial resources and may be more able to weather the blow than Sellers on other parts of the island.

Another ingredient in the soup is the upcoming “ADU Sunset.” Agriculturally-zoned parcels on Kauai, in addition to the aforementioned home density, come with the right to build a guest house. The County has allowed owners to “convert” that right into the right to build another home, or additional dwelling unit—ADU. But a couple of years ago, the County decreed that anyone on Ag-zoned land that received permission to build an ADU would lose that right if they did not have a building permit in place by the end of 2009. So what we have are a number of ag-zoned CPR lots on the market right now that will lose the ability to have a home built on them, unless: a) they sell fairly quickly and the new owner starts the permitting process; or b) the current owner goes ahead and pulls a permit for a house they would rather not have to build. As you can guess, this is making for some rather motivated Sellers.

The upshot of all this is that it is becoming more and more affordable, little by little, to “get back to the land” on Kauai. All over Kauai, especially on the North Shore, there is a vibrant community of small farmers, permaculture enthusiasts, vegetable gardeners, and organic advocates who are doing their part to grow more of Kauai’s food. Land here still isn’t cheap, by any means, but it is moving in that direction. And I can’t think of anywhere nicer to dig in the dirt. Green Acres, indeed!

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Tim Coyle

May 8, 2009

Interesting and informative blog. I, like many others would like to live the dream of a sustainable organic farm. Coffee, cacao, etc… Can you tell me what size of operation is economically sustainable? Exclusive of debt service, grossing +/- $100k?

Just missed the hippie movement in the 60’s, and sorry I did.

Thanks,

Tim

Sagar Hallal, RA

May 8, 2009

Tim, that really is impossible to answer – totally depends on the crop. I know of a local sprout operation, very self-contained (that is for sale, by the way), that nets approximately 100K. Every crop is going to have a different profit profile. Probably best to consult some of the various Hawaii Ag agencies and Organic Farming groups – the economics of farming operations is always a germane subject with them.

As Realtors, our main focus as Buyer’s agents would be to help farmers acquire land as cheaply as possible – it’s my understanding that debt service is what usually sinks farm operations.

As an agriculture enthusiast, it’s my strong feeling that the demand for and profitability of local agricultural operations can only increase. There is a strong movement to make Kauai food sustainable, and I know several “small” organic farmers who are supporting themselves and their families.

Byron Barth

May 19, 2009

Aloha Sagar! Your recent blogs have been very well written, thorough and very, very interesting! In your first one, you stated that the Big Island has (other than lava zones to contend with) a “limited infrastructure.” From what do you base this comment? And, were you referring to utilities, fire & police protection, hospitals, etc.? Please comment. I am looking forward to your next posting. Keep up the great work!! Mahalo from your #1 Fan! -Byron

Sagar Hallal

May 19, 2009

Thanks for the kudos, Byron.

Regarding limited infrastructure on Hawaii Island, I was referring to parts of the island with lower-priced land (specifically Puna, south of Hilo, and the Oceanview Estates subdivision near South Point) where many of the subdivisions are lacking water service – relying instead on catchment – with some even without electrical service. Also, paved roads are the exception and not the rule in those parts.

Can’t really comment on hospitals and fire & police protection; I’m assuming that they’ve got the island covered in those areas – after all, everyone does still pay property taxes – although the greater travel distances there might come into play in those regards.

Byron Barth

May 20, 2009

Aloha, Sagar.

Thanks for the reply. Your explanation makes sense and completes your article for me. Mahalo! The areas such as Orchid Land Estates, HOVE and many other areas of the Big Island that don’t have as “robust” an infrastructure as say, Kailua-Kona or Hilo, are indeed much more laid back, possessing an easier and simpler lifestyle.

Best regards.

Sterling C. Chisholm (R)

September 9, 2009

Sagar, While I am not an attorney I have sold enough CPR properties here on Kauai over the years to suggest that you contact a competent attorney to get all of the facts on CPR developments and set the table with this information…daunting as it is, before you unnecessarily scare the pants off of people who really do not know the score regarding ag land, CPR development and ADU permits and,…. who often confuse the latter two issues thinking this is the case for all ag land. I have a client who e-mailed me your article whom I have sold several ag CPR unit to in the past and who was quite concerned about not being able to build on her AG CPR units. I think that you will find that on small ag properties less than four acres where only one house can be built per the zoning laws, an ADU permit is required for a second home. The ordinance that supports this ADU permitting process is due to sunset on December 15 of 2009. If you also check further into this matter you will find that this rulling does not apply to ag lots larger than four acres where the current zoning allows for 1 house on the first acre and another house on the second three acres and so forth and so on. It is this zoning density issue(number of homes per acre) that the CPR unit size configuration was designed around and why this ADU permit business doesn’t apply here. If you already have a ag CPR unit in existence on a lot over four acres, there shouldn’t be a problem….but check with your attorney first as I am just a dumb Realtor. Aloha, Sterling C. Chisholm (R)GRI, Aloha Sterling Properties.

Sagar Hallal, RA

September 20, 2009

Thanks for your comment, Sterling. I’m sorry that your client got unnecessarily frightened on account of my article. I don’t think I implied that all house sites on ag land would be affected by the ADU sunset – in fact, I pretty clearly stated that it only pertains to ADU rights that were “converted” from Guest House rights. Unfortunately, a blog post has limited space to set the table with the kind of background information that would give a comprehensive view of a particular topic.

But, for non-Realtors, here’s a bit that’s relevant here: On Kauai, a piece of land zoned “Agriculture”, that has not already been subject to a CPR division, typically qualifies for a home and a guest house for a parcel of one acre or larger, with an additional house right granted for each additional 3 acres of size. Hence, a 10 acre piece would typically qualify for 4 homes and a guest house, while a 9 acre piece would qualify for 3 homes and a guest house. It is that guest house right that can sometimes be converted to an “ADU”, and it is THAT ADU that will be affected by the proposed “ADU sunset”.

An additional bit of information is that there is a movement afoot, currently involving hearings by the Kauai County Council, to extend the “sunset” by an additional number of years. We will see how that plays out…

Kauai Farmland Update « Hawaii Real Estate Blog

September 21, 2009

[…] April, I wrote about buying farmland on Kauai, and about how prices on vacant land were beginning to drop.  Let’s revisit the topic and […]

gail

October 17, 2009

I’m really confused now about the ADU. If a guest house has been built and signed off on in a CPR of 5 units and guest house, is the guest house eligible to become a dwelling unit? Note: the certificate of completion for the guest house calls it an additional dwelling unit. Where would I find the answer.

Sagar Hallal

October 17, 2009

Gail, here’s an article from today’s Garden Island that details the latest info: http://kauaiworld.com/articles/2009/10/17/news/kauai_news/doc4ad9791dcab62733642419.txt

Basically, they are saying that they intend to extend the ADU Sunset another 5 years; but, they say that it will only apply to existing ADU’s: “the extension would only apply to those who already have a facilities clearance form in hand or submitted, and would not open the process up to any new applicants”.

So, in answer to your question, if it’s not already an ADU, it can’t become one. If it HAS been converted to an ADU, then the extension of the Sunset applies. You’re probably best off just bringing the C of O down to the Planning Dept. and asking them which it is.

Hope that helped…

Gail

October 27, 2009

Thank you, Sagar, I will do that.

Angela Rothweiler

July 15, 2011

We are a family of three wanting to move off our homestead in Kansas to run a farm full-time. Our ideal situation would be an already established organic farm where the owner is looking to retire and will provide mentoring.

We are college educated, been gardening all our lives, and ready to make the move to a longer growing season. We are open to do a lease-to-own, crop share, co-own and operate etc. We are energetic, highly motivated self-starters with extensive know-how and experience with organic/biodynamic/sustainable/permaculture techniques, growing and marketing, dairy/meat goats, sheep, equine, and poultry and basic maintenance to manage a farm.

Please feel free to contact us with any possible matches in any part of the world and for more detailed information, resume, and interview.

We are seeking assistance through farmlinking programs in California, Oregon, Washington, and Virginia. I have included below California Farmlink’s Mission Statement so that you may better understand our goal.
California FarmLink’s Mission
Our mission is to build family farming and conserve farmland in California by linking aspiring and retiring farmers; and promoting techniques and disseminating information that facilitate intergenerational farm transitions.
California agricultural land is being developed at ever increasing rates. Meanwhile, California farmers age 65 and over outnumber farmers under the age of 25 by approximately 60 to one. Aspiring farmers face numerous obstacles to achieving their dreams. These include a lack of information about financing options and other resources crucial to their success. Retiring farmers lack information about proven, innovative ways to keep land in agricultural production while simultaneously meeting financial goals related to retirement and estate planning.

The number of California farmers under the age of 35 declined 43% between 1992 and 2002. California FarmLink works to reverse this trend and ensure the future of family farming in California.
The future of agricultural production and the viability of productive, diversified, and sustainable farms is far too important to be left to a random process of “marry or inherit”. California FarmLink provides a range of services to facilitate a transition from one farm owner to the next.
Thank you,

Ara

May 12, 2013

I’m looking for a rural land on the west side of Kauai with spring water, away from city or planned neighborhoods, want to live off the Grid, build a log home, do some organic farming, and hen house. How do I go about finding something like that. that does not cost me all my savings.

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