This article was first published on AgFunderNews.com.
From AirBnB to Uber, disruptive companies often have to delicately navigate municipal rules and regulations, including zoning laws, in order to operate in densely populated urban centers. Urban farming startups are no exception. Many are grappling with similar issues in their efforts to grow and distribute food in urban settings.
Zoning challenges, in particular, are an obstacle for large-scale vertical farming companies seeking to operate in American cities. Vertical farming was not envisioned by urban planners and leaders until the last decade or two. It is essential to modernize zoning in order to realize the social, economic and environmental benefits this nascent industry has to offer.
Legal Obstacles to Vertical Farming
The term “urban farming” means different things to different people. For some, the first thing that comes to mind is small backyard and community farms in cities that may span a few vacant lots. These farms (perhaps better described as gardens) serve important functions and are often highlighted in feel-good media stories.
For others, particularly those in the industries of agriculture, technology and investing, it is the potential of large-scale, indoor vertical farms that is at the forefront of people’s minds. That potential includes projects such as vertical farming company Plenty’s – indoor farm currently under construction Compton, California is sited in a 95,000 square foot repurposed warehouse. While that large-scale project is well underway, zoning is an obstacle that impedes others from getting started in cities across the country.
In a 2019 paper (the “Paper”) published in the Journal of Food Law & Policy, titled “Updating the Building Code to Include Indoor Farming Operations,” the author explains that the existing legal frameworks in most urban areas, “[D]o little to address the regulatory ambiguities faced by commercial-scale, indoor farming operations, especially vertical farms.”
The fact that municipalities have been slow to adapt to this change in how and where farming is being done is not surprising. After all, the rapid pace of technological change over the last decade in areas such as financial services, transportation and media, to name a few, has left local, state and federal lawmakers racing to merely keep up. In the case of vertical farming, most local governments and their leaders simply did not envision a world in which some urban buildings would be occupied by plants not people.
Nonetheless, in order for the promise of vertical farming to become a reality, the current obstacles posed by a patchwork of municipal laws and regulations that were created without vertical farming in mind must be addressed. Unless and until zoning laws and building codes more explicitly define how agriculture, including vertical farming, can be pursued in urban settings, the potential environmental and economic benefits (including more local jobs and tax revenue for municipalities) will not be realized.
The Paper includes an explanation of several of the current proposed solutions being implemented in some areas to encourage and enable more vertical farming, including zoning updates and tax incentives. Also put forth is an argument that one of the most important steps that could be taken is updating the International Building Code (“IBC”), which is used by most American cities, to resolve ambiguities and explicitly permit certain agricultural activities, including accounting for “commercial-scale indoor farming operations” by designating such operations under a specific IBC occupancy group.
The Healthy Food Policy Project (“HFPP”) is also weighing in with recommendations to help facilitate urban farming. It has assembled a “list of laws for your city to consider including in your zoning code” on its website, which is a good starting point for municipalities looking to incentivize more urban farming. A couple of the HFPP’s recommendations, along with examples of where and how they have been implemented, include:
- Provide clarity on agricultural terms. For example, Austin’s relevant ordinances clearly define agricultural uses such as aquaponics, horticulture and indoor crop production.
- Specify which zones allow urban agriculture. Detroit’s “Use Category Table” includes permitted agriculture terms, making clear which zones allow a specific use.
The limitation on many of the additional policy recommendations offered by the HFPP, such as permitting on-site sale of produce and allowing accessory structures to be built (e.g. hoop houses), is that they are geared toward small-scale projects such as community gardens and small greenhouses. These types of projects are important and worthwhile, but if municipalities and their leaders want to attract large-scale, multi-million dollar, venture-capital-backed vertical farming startups, it will be necessary to provide further clarity in the law.
If a municipality’s zoning does not authorize a particular project, and if either vertical farming cannot fit into a special use category or political winds make an outright ordinance change too heavy a lift, a vertical farm startup could seek a use variance.
In Indiana, Roka Farm sought to create an indoor farm in what was formerly a grocery store in an area that was not zoned for agriculture. The farm had to go through the significant administrative process necessary to obtain a variance, including submitting significant paperwork and notifying those who live nearby of the proposed change, and ultimately it did succeed.
Generally, however, use variances are hard to obtain and are not a solution for the problem described in this article. There are five stringent requirements in most zoning codes that are beyond the scope of this article, but often the most troublesome is that there is an unnecessary hardship on the applicant that is due to the unique nature of the specific property and not merely that the zoning ordinance is preventing the applicant from doing what it wants to do.
Vision and Leadership at the Local Level
Rethinking urban zoning laws to accommodate large-scale indoor farming, such as vertical farming, will require the many urban jurisdictions in the country to undertake significant hard work that is preceded by consensus building and thoughtful analysis. But there will be a positive return on that investment for local economies, urban residents and the global environment. There is momentum building, not only among investors, but also among municipal leaders. For example, New York City Mayor Eric Adams made urban agriculture, including vertical farming, part of his campaign policy proposals. According to Adams:
“By creating a new set of building codes, business rules and tax programs for urban farmers — and supporting local producers with guaranteed City contracts — we will create jobs by building vast in-city sites that produce food for restaurants, schools and food-insecurity programs through cutting-edge techniques such as vertical farming and hydroponics, often sharing space with renewable energy plants and other sustainability infrastructure.”
If vertical farming can make it in New York, it can make it…well, you get the idea. It is here to stay. The question is: Which local governments will be among the first (and most effective) to pave the way for the fast-growing controlled environment agriculture industry to bloom in their communities?