A farm may have future development potential if it is located near a growing community, has good road access, offers access to utilities, and meets local zoning requirements. However, not every farm near a city is suitable for residential, commercial, or industrial development.
When buying or selling farmland in Iowa, understanding its future development potential can help determine the property’s market value. Some farms may be worth more than their agricultural value because of their location and potential for future use.
What Makes Farmland Good for Future Development?
Several factors can determine whether farmland has development potential. Location is often one of the most important.
Farmland near expanding cities, highways, and growing communities may attract interest from developers. However, location alone does not guarantee that a property can be developed.
Here are some important factors to consider:
- Location: Is the farm near a growing city or community?
- Road Access: Does the property have access to paved roads or major highways?
- Utilities: Are water, sewer, electricity, and other utilities available nearby?
- Zoning: Does the county or city allow residential, commercial, or industrial development?
- Topography: Is the land relatively level and suitable for construction?
- Drainage: Are there floodplains, wetlands, or drainage issues?
- Community Growth: Is the surrounding area experiencing new housing, businesses, or infrastructure improvements?
A farm with several of these characteristics may have greater development potential than one located in a remote agricultural area.
How Does Location Affect Farmland Development Potential?
Location plays a major role in determining whether farmland could eventually be developed.
Properties located near growing communities may become attractive for new housing developments, commercial buildings, industrial facilities, or other uses.
For example, farmland located just outside a growing Iowa community may attract interest from residential developers looking for additional building sites.
However, buyers should consider the direction in which the community is expanding.
A farm located near a city may have limited development potential if future growth is expected to occur in another direction.
Reviewing local development plans and recent construction activity can help identify areas where future growth may occur.
How Do I Know if My Farmland Is Zoned for Development?
Before assuming farmland can be developed, check the property’s current zoning designation.
In Iowa, zoning regulations are generally administered by cities and counties, depending on the property’s location.
Agricultural zoning may allow certain uses but restrict residential subdivisions, commercial buildings, or industrial development.
To determine whether a farm can be developed, contact the local city or county planning and zoning department.
Ask these questions:
- What is the property’s current zoning classification?
- What types of development are allowed?
- Would rezoning be required?
- Is the property located within a city’s future growth area?
- Are there minimum lot sizes or subdivision requirements?
- Are there restrictions that could prevent development?
Just because farmland is located near a city does not mean it is approved for development.
Zoning changes and development approvals may require public hearings, infrastructure improvements, and approval from local government officials.
Why Are Utilities Important for Farmland Development?
Access to utilities can significantly affect a farm’s development potential.
Residential and commercial developments often require water, electricity, wastewater services, and other infrastructure.
A property located near existing utilities may be less expensive to develop than one requiring substantial infrastructure extensions.
Important utilities to investigate include:
- Public water availability and capacity.
- Sanitary sewer access and capacity.
- Electrical service.
- Natural gas availability.
- Internet and telecommunications.
- Stormwater drainage infrastructure.
For example, a farm located next to a city with nearby water and sewer connections may be more attractive to a developer than a similar property several miles away.
However, nearby utility lines do not necessarily mean the property can connect to them. Buyers should verify available capacity, connection requirements, and estimated costs with the utility providers.
Does Road Frontage Increase Farmland Development Value?
Road frontage can be an important factor when evaluating development potential.
Properties with access to paved roads, highways, or major transportation routes may be attractive for residential, commercial, or industrial uses.
For residential development, buyers may look for convenient access to schools, shopping, and employment opportunities.
Commercial developers may prefer properties with high traffic visibility and convenient highway access.
Industrial developers may prioritize transportation routes that accommodate trucks and heavy equipment.
However, road frontage does not automatically guarantee development access.
Driveway permits, access restrictions, traffic studies, and road improvement requirements may affect whether the property can be developed.
Can Farmland Be Worth More for Development Than Farming?
Yes. In some situations, farmland may have a higher market value for development than for agricultural production.
Traditional farmland values are often influenced by soil productivity, rental income, drainage, location, and agricultural demand.
Development land may be valued differently.
A developer may consider how many residential lots, commercial buildings, or other improvements could realistically be constructed on the property.
For example, a farm with average soil quality located near a growing community could potentially attract a higher offer from a developer than from a farmer.
However, development value depends on whether the proposed project is financially feasible.
Developers must account for infrastructure, engineering, zoning approvals, construction expenses, financing, and market demand.
A farm’s potential development value is not the same as the price a developer is willing to pay today.
Does CSR2 Matter When Evaluating Development Land?
In Iowa, the Corn Suitability Rating 2 (CSR2) is commonly used to evaluate farmland’s agricultural productivity.
A higher CSR2 rating generally indicates greater potential for crop production under the rating system.
However, CSR2 may be less important when evaluating land primarily for development.
For example, a farm with a CSR2 rating of 65 near a rapidly growing community may have greater development potential than a farm with a CSR2 rating of 90 located far from population centers.
This does not mean soil quality should be ignored.
If development is unlikely for many years, the property’s agricultural income and productivity remain important considerations.
Buyers should evaluate both the current agricultural value and the realistic potential for future development.
How Can I Find Out Where a City Plans to Expand?
One of the best ways to evaluate future development potential is to review a community’s comprehensive plan.
Many Iowa cities and counties publish planning documents showing anticipated growth areas, future land uses, transportation improvements, and infrastructure plans.
These documents may identify areas being considered for:
- Residential neighborhoods.
- Commercial development.
- Industrial parks.
- Mixed-use development.
- Transportation improvements.
- Public facilities.
You can typically obtain this information from the local planning and zoning department or the community’s website.
Keep in mind that a comprehensive plan is generally a guide for future development, not a guarantee that a particular property will be rezoned or developed.
What Could Prevent a Farm From Being Developed?
Even a well-located farm may face challenges that limit its development potential.
Common obstacles include:
Floodplains and Wetlands
Land located in a floodplain or containing regulated wetlands may face additional restrictions or construction requirements.
Poor Drainage
Drainage problems can increase construction costs and limit the amount of usable land.
Limited Utility Access
Extending water or sewer infrastructure can be expensive and may make a proposed development financially impractical.
Zoning Restrictions
Local regulations may prohibit certain types of development or require approval before construction can begin.
Access Limitations
A property may lack adequate road access or require additional improvements to meet development standards.
Easements and Restrictions
Utility easements, access easements, deed restrictions, and other recorded agreements may limit where improvements can be constructed.
Identifying these issues early can help buyers avoid purchasing land based on unrealistic development expectations.
Should I Sell My Farm Now or Wait for Development?
This is an important question for landowners whose property is located near a growing community.
The answer depends on the property’s current value, development potential, financial needs, and the likelihood of future growth.
Holding farmland may allow an owner to continue earning agricultural income while waiting for development opportunities.
However, there is no guarantee that a city will expand toward the property or that a developer will eventually make an offer.
Landowners should consider:
- Current farmland market value.
- Annual rental income.
- Property taxes and carrying costs.
- Nearby development activity.
- Potential infrastructure improvements.
- The estimated timeline for development.
- The financial impact of selling now versus waiting.
In some situations, selling through a farmland auction or traditional listing may generate strong competition among farmers, investors, and developers.
A land broker experienced in both agricultural and development properties can help evaluate the available options.
How Do I Determine What My Farm Is Worth for Development?
Determining development value requires more than comparing the property to nearby farmland sales.
A thorough evaluation should consider the property’s current agricultural value and its potential alternative uses.
Start by reviewing recent sales of comparable farmland and development properties.
Next, investigate zoning, utilities, road access, and future growth plans.
For properties with significant development potential, a developer or land planner may need to prepare a preliminary site plan and estimate infrastructure expenses.
These steps can help determine whether the property’s development potential supports a higher market value.
Frequently Asked Questions About Farmland Development Potential
How do I know if my farmland will become development land?
Review local comprehensive plans, zoning maps, utility expansion plans, and nearby development activity. These can indicate potential growth, but they cannot guarantee future development.
Is farmland worth more if it is close to a city?
Sometimes. Farmland near growing communities may attract developers and investors, but its value depends on zoning, utilities, access, market demand, and development feasibility.
Can agricultural land be rezoned for residential development?
Yes, agricultural land may be eligible for rezoning. However, approval depends on local regulations, planning policies, and the specific property.
Do developers buy farmland before it is rezoned?
Yes. Some developers purchase farmland before obtaining zoning or development approvals. Others negotiate purchase agreements contingent on receiving the necessary approvals.
Can I continue farming land while waiting for development?
Generally, yes, provided agricultural use is permitted and any lease or contractual obligations are followed. Many landowners continue farming or renting their property while considering future development opportunities.
Should I get my farmland appraised before selling to a developer?
A professional appraisal or market valuation can help establish the property’s current value. For land with significant development potential, additional analysis may be needed to evaluate its value for alternative uses.
Final Thoughts: Does Your Farm Have Future Development Potential?
Farmland development potential depends on several factors, including location, community growth, zoning, road access, utilities, and market demand.
While some farms may eventually transition into residential, commercial, or industrial developments, others may remain most valuable for agricultural production.
Before selling farmland near a growing community, it is important to understand both its current agricultural value and its potential future uses.
At Whitaker Marketing Group, we specialize in farmland auctions, listings, and agricultural real estate throughout Iowa and the Midwest. Our team helps landowners evaluate their properties, understand market conditions, and explore selling options.
Whether your property is best suited for farming, investment, or future development, understanding its market potential is an important first step.
Contact Whitaker Marketing Group to discuss your farmland and learn more about your selling options.
Whitaker Marketing Group – Land is our Brand.
