This article appeared in the Fall issue of Urban Land on page 114.
Daron Joffe, a.k.a. “Farmer D,” is a busy guy these days. An expert on community farming, Joffe is in demand as a consultant for developers looking to add farming and agriculture to their projects.
“Momentum is picking up,” says Joffe, owner of Farmer D Consulting and the first farmer of Serenbe, a seminal agrihood outside Atlanta. “It seems like every day there is a new project.”
At this point, there are more than 90 agrihoods in the United States, according to ULI data. No longer the new amenity on the block, farms are now an accepted part of the master-planning mix as developers and communities look for new ways to attract buyers and develop healthy neighborhoods. In some cities, agrihoods are among the top-selling master-planned developments, attracting a mix of empty nesters, young families, and retirees focused on a healthy lifestyle. (See a map of agrihoods across the United States in addition to the publication, Agrihoods: Cultivating Best Practices, at uli.org/food)
But Joffe typically cautions developers who are considering an agrihood: “It sounds sexy,” he says. “But farming is hard. Sustainable agriculture is a real challenge.”
In communities around the United States, there have been growing pains as developers, communities, and residents wrestle with the best ways to make agriculture and fresh food an integral part of their neighborhoods. Hard lessons have been learned as communities work out the kinks.
Three years after launching the 3.5-acre (1.4 ha) Cannery Urban Farm, part of the Cannery, a 547-home development in Davis, California, the farm is facing a $100,000 yearly deficit, says Mary Kimball, executive director of the Center for Land-Based Learning, the nonprofit organization operating the farm. The farm has encountered myriad unexpected issues, from poor soil and staff shortages to homeowners indiscriminately picking crops.
“When we started, we didn’t know a lot about agrihoods and how they operated and best practices,” Kimball says. The farm, which was developed in conjunction with the city of Davis, will need a financial restructuring if it is going to be sustainable and achieve its potential, she says. But Kimball remains convinced of the concept’s potential. “The opportunities are amazing,” she says. “It’s about figuring out how to make this work.”
Finding Value
Food-related amenities can support a developer’s bottom line, but the “developments require innovation, creativity, new business models, and inventive partnerships to be successful,” concluded a recent report on the subject from ULI’s Center for Sustainability, Cultivating Development: Trends and Opportunities at the Intersection of Food and Real Estate.
Agriculture projects are “management-intensive activities that often require risk and experimentation,” says ULI senior resident fellow Ed McMahon, who worked on the report. “Farming is not a panacea, in any sense of the word.”
For developers, the advantages of agrihoods have been well documented. They typically use less land and require less maintenance than golf courses and swimming pools, at a fraction of the initial cost. A farm is also a proven strategy to set a development apart from the competition. “Number one, we find that the farm is one of the greatest marketing pieces we have,” says Steve Nygren, founder of Serenbe. “Agriculture sells.”
For Serenbe, which broke ground in 2004, the farm has become engrained in the DNA of the development, Nygren says. Serenbe includes “edible landscaping” such as blueberry bushes and fruit trees at crosswalks and along streets. The community operates as an “agrarian economy,” with branded food, pickled vegetables, weekend markets that attract tourists from the city, and local restaurants featuring vegetables “that have never been on a motorized vehicle,” he says.
An agriculture-based lifestyle clearly has its appeal with homebuyers. Outside Dallas, the 3,200-home Harvest community, developed by Hillwood Communities, was the top-selling master-planned community in the Dallas/Fort Worth area in 2018, with 420 sales, up from 320 in 2017, according to John Burns Real Estate Consulting. Willowsford, the development built around a conservancy and farm outside Washington, D.C., was the number-one-selling project in Virginia in 2018, with 400 sales, according to data tracked by the consultancy.
But determining the value of the farm in the buying decision can be difficult, says Devyn Bachman, research manager for John Burns Real Estate Consulting. While developers may see farms as a low-cost amenity when compared with golf courses and pools, “I don’t believe people move to a community just because of agriculture,” Bachman says. Price point and location are still priorities, she says. “It is an attraction and something they take into consideration, but I don’t think it’s a destination.”
For Harvest, the aforementioned community outside Dallas, the working farm and a focus on agriculture have been a big differentiator in the market, says Tom Woliver, director of planning and development for Hillwood Communities. “Residents love it,” he says. “Whether they farm or not, people wanted to be on the farm or near the farm.”
The 1,200-acre (486 ha) Harvest site, which Hillwood acquired in 2011, has attributes that made it a natural for an agrihood, Woliver says. The topography was flat, with no trees, and the only existing landmark was a dilapidated farmhouse. Working with a consultant, they found there was good soil and “real value” to the agricultural roots and developing a connection to the rural character in the community, he says.
The farm is now the “face of the community,” operating without a subsidy, and more than 100 residents have signed up for the Community-Supported Agriculture (CSA) program, Woliver says. But there have been bumps in the road. After an initial investment of about $250,000 to build a greenhouse and buy a tractor, they struck a deal with a grower with an existing greenhouse business to manage the property. But the split duties did not work and Hillwood had to find a full-time farmer who could also devote time to work with the community.
“It is a great amenity,” Woliver says. “However, if you don’t have patience and know there are going to be hiccups, then don’t do it.”
Keys to Success
To be successful, a farm requires land, capital, and water. Mixing those requirements with the goals of a residential community is one of the challenges that agrihoods face. “When people peel back layers, there are a lot of complexities that don’t get talked about enough,” Joffe says.
It is important for developers to start the process early, even before the start of housing construction, Joffe says. It can take years to establish stability in a production farm, he notes, but too often developments view the farm as “an afterthought.”
When one is talking with experts about agrihoods, key elements are mentioned repeatedly:
• Location matters. It is often a mistake to put the farm on the edge of the community; it should be in the heart and center, experts say. Locating the farm on the perimeter “doesn’t connect the farm and the farmers to the residents,” Nygren says. “It’s that connection to the farmer and the farm that is a huge asset.”
Concerns about smells and traffic are offset by the importance of engaging the residents and making the farm an authentic part of the community, experts say. “Put it where it is the soul of the community,” Woliver advises.
• Do your homework. Any project should start with a detailed analysis of the soil, water, and climate conditions. Not every situation is ideal for farming or for certain crops. Tough decisions need to be made about crops, soil, water and pesticides that will affect the long-term sustainability of the project, Joffe says.
After working with consultants, Freehold Communities built the Miralon agrihood in Palm Springs, California, around olive trees, which fit the soil and the water constraints, says Suzanne Maddalon, vice president of marketing for Freehold Communities.
Water is a constant—and expensive—issue that any farm operation must address. Using public sources can be particularly expensive. For Aria Denver, a 17.5-acre (7 ha) residential project in northwest Denver, developer Urban Ventures went to the local water district to rework rates for the 1.5-acre (0.6 ha) production garden. “The cost of water is an ongoing issue for us,” says Susan Powers, president of Urban Ventures. She says their water costs from May through September—the growing season—run $1,750.
• Figure out the money. Agrihoods often cost more than expected, developers say. As mentioned previously, Hillwood spent an estimated $250,000 to launch the farm in Harvest, including buying a tractor, building a greenhouse, and preparing the land, Woliver says.
Many agrihoods tie the farm budget into the homeowner association fees, like any other community amenity. For the 2,000-home Arden master-planned development in Palm Beach County, Florida, that works out to about $20 a month per home, Maddalon says. Scale is important; it is hard to make the numbers work for a smaller project, she says.
Alternatives exist for financing a community farm. Hillwood operates the agriculture element in Harvest as a private farm, leased to a grower, who also runs the community programs. Aria Denver worked with Regis University on an almost $1 million grant from the Colorado Health Foundation to support fresh food and community programs. In Prairie Crossing, a conservation community of 400 homes in Grayslake, Illinois, the farm is protected by a conservation easement and run by a nonprofit entity, which is funded, in part, by transfer taxes from the sale of homes.
• Find partners. Don’t go it alone, experts say. “A truly successful food-centric development relies on partnerships with established local institutions,” the recent ULI study concluded. “By working with existing neighborhood groups, nonprofit organizations, anchor businesses, and small food purveyors, developers have the opportunity to create authentic, culturally relevant projects that support local priorities.”
Aria Denver has a close working relationship with Regis University, which is adjacent to the site, as well as with local community groups and nonprofit organizations. Groundwork Denver, a local nonprofit entity, runs the 1,800-square-foot (176 sq m) greenhouse on the site, with local teens serving as the main employees. The produce was sold to local restaurants, but this year the model was changed to a CSA, Powers says.
Engaging stakeholders and partners is “about building relationships around the farm that will support it in the long run,” Joffe says.
• Engage residents through programming. It is not enough to develop a picturesque farm and host a farmers market. There needs to be an active and consistent campaign to engage residents and get them involved in the farm culture, Joffe says. That means a variety of programs targeting different demographics and different interests, Woliver says. For example, the Harvest farm hosts classes with names like “Good Bugs, Bad Bugs” and “Talking Dirt.”
Programming should be constantly changed to keep it fresh, Powers says. “The more programs you offer, it hits people more,” she says. “It’s not just a beautiful garden. There are things going on there all the time.” The most successful activities involve all members of the family, including planting new crops, Kimball says. “It’s the family-related events that make sense,” she says.
• Create boundaries. A working farm needs to be treated like a business; residents may own a share of the product, but they cannot work the farm themselves. They often do not understand the limits. One of biggest mistakes found in the recent ULI study was the assumption that working the farm “is something residents themselves will do,” McMahon says.
In Davis, California, Kimball lost a crop because residents thought it was okay to come out and pick the watermelons. “You must have an area specifically for the community, where it is clear, ‘This space is yours and the other part is farmed by the staff,’” says Kimball.
• Hire the right staff. Finding the perfect farm manager can be a challenge. Farming is “not a skill set we’re used to hiring,” Maddalon says. In addition to running the farm as a business, a farm director in an agrihood must be part community relations expert, part educator, and part entertainer. The social and education aspects “are as important as the technical knowledge,” Maddalon says. Many agrihood developers seriously underestimate the necessary staffing, Joffe says. “These types of farms are very labor intensive,” he notes, adding that it is a misperception that all one really needs is a farm manager.
Far too often, developers misunderstand the essence of agrihoods, Maddalon says. The community is not simply about agriculture; it’s about healthy living. The agriculture is simply part of a package of amenities, including trails, parks, and gardens, “that help with a healthy living lifestyle,” she says.
Agriculture must be supported in the context of the larger goals, like any other amenity, Kimball says. “This is the agrihood challenge,” she says. “If it is going to be seen as a vital amenity for the development, [developers and the community] need to invest in it.” But that calculation is more complicated with agrihoods. There is a connection with agrihoods that is very different than other communities. Agrihoods “give people searching for a place to live that is not just a home in the suburbs the opportunity to be part of something that is bigger than themselves,” Powers says.
Agrihoods may be more costly and labor intensive than a typical master-planned development, but Powers says that she would gladly do it again: “It’s one of the things that get in your blood.”
KEVIN BRASS writes regularly about property and development for the New York Times and the Financial Times.
ULI’s Food and Real Estate Project explores the mutually beneficial relationship between food-based amenities—such as working farms, community gardens, food halls, restaurants, and grocery stores—and real estate.
