Hollywood stars and global tech moguls are increasingly looking toward land investments in remote or secluded areas to secure their wealth in the long term. In the past, celebrities usually spent their money on luxury apartments or mansions in major global cities. Recently, however there has been a noticeable shift in how the wealthiest people invest; with many now choosing to buy huge, undeveloped properties in places like Hawaii instead.
A recent investigation by Forbes found that just 37 billionaires own over 11% of all private land in Hawaii. This high level of ownership is one reason why the islands can feel so empty; these massive estates are often kept as private, undeveloped retreats. While a visitor might just see miles of quiet, open green space, that land is actually a carefully held investment belonging to some of the world’s wealthiest people.
The impact of strict zoning and geography
A large reason why so much of Hawaii appears empty is because the state government enforces very strict rules on where people can build. According to the Hawaii State Land Use Commission, the land is divided into categories like urban, agricultural, and conservation.
Only about 5% of the total land is zoned for urban use, which is the only area where high-density housing and businesses are allowed. The rest is legally reserved for farming or protected for environmental reasons, meaning it must remain largely clear of buildings and residents.
Geography is a major reason why many parts of the islands remain sparsely populated. Much of the terrain consists of jagged cliffs, or active lava zones that are either dangerous or physically impossible to build on. Owing to this characteristic of the land’s natural terrain, the building of homes and roads becomes limited – leaving large areas untouched by construction.
On the Big Island, enormous stretches of land are virtually unusable due to them being hardened lava fields with no capacity for land development. Building in these areas is often not realistic because of a lack of basic infrastructure and the ongoing risk of volcanic activity.
Billionaires as modern land barons
The private land that is available for purchase has increasingly been bought by billionaires who use the space for massive personal estates or land banking. Larry Ellison, the co-founder of Oracle, famously bought nearly 98% of the island of Lanai, which means he owns almost all the housing and local utilities used by the island’s residents.
This level of control is uniquely alarming and essentially makes a single individual the landlord for an entire community. Other tech leaders like Mark Zuckerberg have bought thousands of acres on Kauai, where they build private compounds and focus on self-sustaining agricultural projects.
Many of these wealthy owners benefit from Hawaii’s agricultural tax breaks, which allow them to pay lower property taxes by keeping a small portion of their land active for ranching or farming.
Reports from NPR note that while some owners like Marc Benioff have donated portions of their land for affordable housing, the general trend is toward more privatisation. These purchases continue a historical pattern that began in the 1800s when land was divided into large plantation tracts, preventing it from ever being broken into smaller, more affordable plots for local families.