Real Agriculture vs. Gentleman Farms

Zoning Changes Altering Rural Maui

 By David DeLeon


 In the last two years, Haiku has become a hot commodity. Estate properties have been going like hotcakes, and while values in much of non-resort Maui remained stable, the values in rural Haiku jumped 40 percent last year alone.

The driving force behind this popularity has been the creation of a relatively new zoning category: rural two-acre "agricultural" subdivisions.

And while real estate offices that specialize in rural Maui have seen an ever escalating demand for this type of rural estate property, a recent redrafting of Maui County's rules governing agricultural property has severely cut back on the development of new two-acre subdivisions. Or yet again, maybe it won't.

"The development of two-acre projects in Upcountry Maui has added an interesting and highly popular type of property, especially for West Coast investors," said John Stephens, owner of Stephens Realty, Inc. "Right now we have an inventory shortage of these types of large lots."

While the two-acre agricultural lot zoning proved to be popular with a growing portion of the buying public that wants a rural environment, the County has always viewed this changing form of land use as a problem - a problem that had to be fixed.

The County's agricultural zoning envisioned these lots being used by yeomen farmers who would actually grow crops or animals on them and maintain a distinctly rural lifestyle. That's why the zoning classification is "agriculture." Unfortunately, this concept ignored the economic reality that not too many real farmers could afford to buy and maintain a "farm" on two-acre lots that go for $180,000 and up. At those prices the "farm" becomes more of a hobby than a way to make a living, Stephens pointed out.

For much of the 1980s and 90s the County government remained frustrated by the obvious disconnect between that "agricultural" zoning concept and the result, which became known as "gentlemen's estates." This term grew out of the belief that this new development phenomenon amounted to a sort of "gentrification" of rural Maui.

Guava pastures and pineapple fields all around Maui were turned into two-acre projects, big and small, ranging from truly country to truly pretentious. The concept of living on a two acre spread, in a subtropical rural setting proved quite attractive to newcomers and local residents alike. As a result, Haiku's and Paia's population has tripled in the last three decades, going from just 3,732 in 1970 to a projected 9,127 this year.

"It's the best of Maui, out in the country, quiet, peaceful, the tradewinds blowing, with no neighbors breathing down your neck, but close to the ocean and mountain and with all the modern facilities minutes away. It's truly special," Stephens said.

One of the problems with the ag lot residential concept was these projects were not truly "planned." Because the land was zoned for agricultural use, building an agricultural subdivision did not require permission from either the County Council or the Planning Commission. As long as a developer met the conditions for subdivision, the approval was administrative and nearly automatic. Neighbors and nearby communities had no means to respond to even large-scale projects that would change their neighborhoods.

To existing rural residents, and even some who bought these two-acre "farm" lots, the increasing number of these projects and the continuing loss of open space to development was a matter of concern.

On top of that, the public infrastructure - roads, schools, water supply, fire and police protection, etc. - in these rural areas were not sized for major population expansion, because no such development was "planned."  As the rural development continued, pressure built to slow the march of "gentrification."

Reacting to that pressure did not prove easy. As the County started to work on bills to address the issue, an opposite, and almost equal political reaction to those opposed to "gentrification," developed among rural property owners, both big and small, who did not want to lose their right to create projects of their own. Some of these were the same small-scale farmers whom the County's zoning was intended to protect.

After years of wrestling with the problem of "gentrification," in late 1998 the County Council created a new agricultural district, specifically designed to deal with this issue. The basic concept of the new zoning approach was to allow large agricultural lot owners to turn their holdings into "agricultural subdivisions" but no longer allow them to maximize two-acre lot build-outs.

Prior to 1998, an owner could turn a whole property into lots and infrastructure. A 40-acre lot would yield, say, 17 two-acre "farm" lots, with roads, electrical and water easements taking up the rest. Under the new ordinance, the owner would only be allowed a maximum of eight parcels. The owner is given the choice of creating seven two-acre lots and one large lot, or she could create eight lots of equal proportion, or any mix of these, as long as she does not exceed eight lots.

And once the lots are subdivided for the first time, then that's the last time they can ever be subdivided. Well, sort of. If the owner could prove to the County Council that they had a legitimate "family" need to further subdivide - like giving property to grown children - they could be allowed to break up a large, remaining lot.

"What we were planning to do was to protect the larger lots in the country for the future of agriculture," said former County Council Committee Chairman Alan Arakawa. As a trade-off, the Council actually made it easier for smaller property owners to chop up smaller lots, especially those under 15 acres without having to prove a family need.

"It took a lot of the burden off the smaller property owner," Arakawa continued. He predicted that once the perennial Upcountry drought problems are resolved, many of these property owners will be again developing new two-acre subdivisions.

The loser, if there was one, was the larger corporate landowners, because it will no longer be economically feasible to create the relatively small subdivisions the ordinance permits from the much larger farm lots the companies own.

 The ordinance also benefited the two-acre agricultural lot owners because it allowed them the right to build a second dwelling on their property without first having to prove that this new  home would be used to house farm workers, as the previous law had implied they should. Some owners found ways around that prohibition, without actually becoming real farmers, and some did not try.

"We never could really define what was 'farm' use and what was not. And besides, we did not have the ability to police it anyway," Arakawa said. So the County Council decided to allow all agricultural lot owners to be able to build a second dwelling, as long as it was 1,000 square feet of living space or less.

This has resulted in a mini-building boom in Haiku, as many of the landowners who did not figure out a way around the County's earlier "farm dwelling" requirement, went right down to the County Building and pulled a building permit.

While saying it is too early to judge the outcome of the December 1998 ordinance, Arakawa expressed confidence that it would protect Maui County's larger, more productive agricultural properties, while allowing for some addition to the two-acre lot inventory from smaller lot owners.

"Anything less than 100 acres and you can not make a living farming it anyway," Arakawa said.

Arakawa characterized this ordinance as an intermediary step, saying that there is more work to be done. For instance, he would like to revisit the concept of high-end residential property (gentlemen's estates) versus agricultural use so that the "residential" character of the estate properties is better recognized for what it is. REMS


Dave DeLeon is a 20-year resident of Maui and for the last six years has been living out his dreams in rural Haiku. Formerly a journalist and an assistant to former mayor Linda Lingle, Dave is a Realtor Associate at Stephens Realty, Inc. in Paia, where he specializes in Upcountry and Windward Maui properties.


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