American home builders have a long history of bulldozing farms to make way for new housing. Now developers are starting farms to sell homes. Harvest, a $1 billion “urban agrarian” community by billionaire H. Ross Perot Jr.’s Hillwood Development, teamed with a farmer to grow fruits, vegetables and grain by 3,200 planned homes northwest of Dallas.
Willowsford, a 2,130-home development in Virginia’s Loudoun County, set aside 2,000 acres for green space, including 300 acres for produce, chickens and goats. And DMB integrated produce fields and edible gardens into projects in Arizona, California and Hawaii.
As the housing industry continues its recovery from the last recession, “agrihoods” are luring buyers including retired baby boomers with a yen for fresh ingredients and parents who want to raise their children on organic food, said Ed McMahon, a senior resident fellow at the Urban Land Institute.
About 400 people live in the four hamlets of Serenbe, an award-winning development started in the Chattahoochee Hills near Atlanta in 2004. View Enlarged Image
“The foodie generation has come of age,” he said. “The mainstream development community has come to think of these as a pretty good way to build a low-cost amenity that people seem to like and that also adds authenticity to a development. It ties into trends that are emerging in U.S. culture, which is basically interest in food and health.”
Smaller-scale agrihoods, such as the 359-home Prairie Crossing outside Chicago, began cropping up in the 1980s. Serenbe, in the Chattahoochee Hills southwest of Atlanta, has sold 200 homes since the farm-centered community’s 2004 opening, with space for 1,200 residences.
What’s changed is the size of the projects and the entry of corporate developers, who are tapping into the same foodie lifestyle that’s supporting neighborhood farmers’ markets, Food Network cooking shows and the Whole Foods Market (NASDAQ:WFM) chain, McMahon said.
At Harvest, started by the 56-year-old Perot’s Hillwood Development, a restored 19th-century farmhouse and 5-acre commercial and community farm set the project apart from others on the prairie 35 miles northwest of Dallas, said Tom Woliver, Hillwood’s director of planning .
“You’re out in the greenfield in these big communities and you need to attract some interest,” Woliver said.”
It’s too soon to say how much of a premium developers can charge for farm-to-table amenities, Woliver said. Harvest’s first 100 homes are occupied, with 50 others under contract and still being built, he said. D.R. Horton (NYSE:DHI), the largest U.S. homebuilder by revenue, this year is opening a new Harvest subdivision including houses with large front porches “reminiscent of farm-style living,” according to Jessica Hansen, vice president of investor relations at the Fort Worth, Texas-based builder. Prices will start at $250,000, she said.
Follow us: @IBDinvestors on Twitter | InvestorsBusinessDaily on Facebook