Mark Zuckerberg expands his $300M Hawaii compound by 1K acres, reports say — why it's triggering frustration with locals
The tech billionaire's aggressive dealmaking spree on the tiny island of Kauai has drawn both support and backlash from the local community. Here's why the moves are so controversial and the lessons it offers for real estate investors.
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Reshaping Hawaii
Since their arrival in 2014, Mark Zuckerberg and Priscilla Chan have invested a total of $311 million on the island estate. Some of that money has gone to farming and environmental conservation efforts, spokesperson Brandi Hoffine Barr told Wired, while some has gone to local non-profits and charter schools.
Construction on the property has also created many new jobs for locals, according to the New York Post.
However, some locals and government officials have also confirmed the presence of multiple burial sites on the estate, as per Wired. Hawaiian regulations require the reporting of such burial sites, but some worry that the nondisclosure agreements signed by workers could complicate that process.
For others, this is an early indication of how the presence of one of the world's richest families is influencing the local culture and heritage of a relatively small community. 'If our island has any hope of remaining Hawaii, this kind of activity has got to stop,' Puali'i Rossi, a professor of Native Hawaiian studies at Kauai Community College, told Wired. 'Eventually Hawaii isn't going to look like Hawaii anymore — it's going to be a resort community. Are we really thinking about 100 years from now, what this island is going to look like?'
The ongoing saga offers some key lessons for ordinary real estate investors.
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Lessons for investors
The backlash to Zuckerberg's aggressive landbanking should raise red flags for regular investors. Whether you're buying thousands of acres of beachfront property or a small farm in Nebraska, the future of the community matters just as much as the value of the land.
Before buying property or investing in a real estate investment trust, consider not just the current economic dynamics but also the long-term outlook for the location you're targeting. If the local community is unhappy about the rise of short-term rentals, growing influence of billionaire neighbors, or noise from data centers, for example, these frustrations could turn into new zoning rules or regulations that impact your investment.
For instance, Hawaii State Senator Brenton Awa has already responded to public backlash on rising home prices by proposing a potential ban on foreign buyers and corporations, according to ABC News. Meanwhile, the Maui City Council is moving forward with plans to phase out nearly half of the island's short term rentals, according to KITV.
This is why gauging local sentiment, understanding culture and heritage and anticipating regulation shifts is an important part of the real estate investment process. You could attend local council meetings, public hearings or talk to local neighborhood association representatives to get early indications of these risks.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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