"As a symbol of great possession," read an article in the inaugural issue of Fortune magazine in 1930, "the privately owned island may yet supplant even the steamship.” Eighty-five years later, it can safely be said that the supplanting is complete. Today, private islands are a status symbol that derive some of their power from being so scarce: One industry veteran estimates that there are only 2,000 islands that are close enough to land, located in stable regions, and allowed to be developed.
But why own an island at all, when a pied-à-terre in Monaco or a cabin in Sun Valley would do? Private islands usually aren't near airports, so getting there is a hassle. Any construction—let alone maintenance and repairs—is going to cost about two to four times as much as it’d cost on land. And as one owner told The New York Times in 2005, “It can be a real bear getting groceries out there.”
Chris Krolow, the CEO and founder of the Toronto-based marketplace Private Islands Inc. and the host of HGTV’s Island Hunters, sees these obstacles as irritating but surmountable. He owns three islands, two in Ontario and one in Fiji. Krolow has been fascinated with the idea since he was a child, and other owners have cited early obsessions with Robinson Crusoe to explain their purchases. (I, for one, have not forgotten that Crusoe spent significant amounts of time fending off constant threats from extreme weather and cannibals.)
I spoke to Krolow about the current state of the industry, as well as why the idea of owning an island is so appealing. The interview that follows has been edited and condensed for the sake of clarity.
Joe Pinsker: How is the private-island industry doing now? How did it fare during the downturn?
Chris Krolow: During the economic downturn, everything had sort of halted. There were very few sales during the economic crisis. Over the last few years especially, we've definitely seen a resurgence in sales and inquiries. But the recession hit us pretty hard.
Pinsker: How was it in the early-to-mid 2000s?
Krolow: The market really only started when we amalgamated all our listings on our website. That's when the market really took off. I would say the private island market didn't really exist until before 1999.
Pinsker: Are you saying that the Internet played a big role in getting the industry to coalesce?
Krolow: Absolutely. When we started in 1999, there was a handful of brokers that had a listing here or there, so there really wasn't a market, per se. There're two kinds of markets. There's a local market and there's an international market. And islands in local markets, they're obviously more sought after by people who actually live there and know the area. International markets—that's where it didn't really exist before. A lot of people didn't have a reason to look into what the chances were of owning an island, let's say, in Asia, or in the South Pacific. They were just told, "Oh, foreigners can't own islands."
Without the Internet, there would be no market. People aren't looking for an island in a particular location all the time. They think they are at first, perhaps. But when they learn about our company, and they start to investigate, usually their criteria change, like, "I don't want to spend more than four hours getting to my island, or six hours getting to my island." So someone from the States might be open to an island in Canada. They could be open to the Bahamas. And now they've got direct flights from L.A. to Fiji, overnight flights. You could be on your own island in 14 hours and not even realize. You take a sleeping pill. Boom—next thing, you're in your helicopter and you're a mile away—so the world has become a lot smaller.
Pinsker: What do you think of how private islands are portrayed by the media? What are the press's biggest misconceptions?
Krolow: I find it hilarious that the press is always talking about celebrity-owned islands. And you know what, there's just really not very many celebrities that own islands. And most of them that were, were trying to sell them. It's just something that adds to the whole allure of owning an island. The press is talking about Richard Branson, David Copperfield—the same names that come up over and over and over again.
Let's face it, island ownership and celebrity—those two don't necessarily fit together. If I tell you the global coordinates where my island is, you can literally pinpoint it—Boom! That's it.
The other misconception, and now they're doing articles on this, is you don't have to be rich to own an island. And I think that's probably the biggest one. A lot of articles out there are more geared toward, "Wow, the rich and the famous!," "Oh! This guy owns an island!," or "Wow! This guy owns two islands!" And the truth of the matter is a lot of our clients are not millionaires. They're all a little bit better off than most, I guess. But I wouldn't call them all super rich. We've had $20,000 islands. We've had $100 million islands.
Pinsker: In the industry, is there a conversation about the environmental impact of all this? Can construction upset the local ecological balance?
Krolow: Islands are very sensitive environments, and the permit requirements are difficult. In Greece you need maybe 40 permits before you can build anything on an island. In Ontario, Canada, as of the last 15 years, you can't build on any undeveloped island if it's less than an acre.
But at the end of the day, I always tell my clients, "If you develop an island, the best thing for you to do is to really leave the smallest footprint possible." And that's also just in terms of enjoying the property, the amount of work involved, landscaping—I don't like the idea of landscaping islands. I like to keep things as natural as possible. Islands like to take their space back. They overgrow very quickly. So I always like to advocate very little, or more-natural, landscaping.
And, you know, it's hard to sell an island that has been over-developed, or where someone has really made their own mark. Any island where there was a finished home on it, either it sold instantly, or it took a while to sell. Like I mentioned before, island buyers are a very special breed of people. They want to make their own mark. They don't want someone else's vision.
Pinsker: You said that the Internet changed the market, but beyond that, I'm not sure what other innovations there could be. Is there a "new big thing" that people are talking about in the industry?
Krolow: One thing for our company is man-made islands. This is something that we're quite interested in. We're working with a couple of companies that specialize in man-made islands. We're very interested in the World Islands in Dubai, which are all man-made, and seeing that development actually grow.
There are a few proposed developments in the Maldives. Right now, it's a concept. It's an idea. And, you know, I think for global warming, if you look at the Maldives, I think it's extremely important. When you're talking about actual survival, then price doesn't matter so much. The cost to build a man-made island—let's say a half-acre island in the Maldives—we're talking $10 million, roughly. There's a company that's looking at making these man-made islands—a big mass of floating pieces of styrofoam that's encased in concrete that's actually drilled with massive metal cables into the seabed. So you have water that's still flowing underneath the island. You're not really destroying the reef and everything that's there. You're working with them.
We have over 550 islands that we market publicly, and another hundred or so that we market privately. It's not like, "Oh, now we're going to add another 20 man-made islands." It doesn't quite work that way. I think right now it's too expensive. I don't think, even in my lifetime, that man-made islands will be mainstream. They're too pricey. I think for a technology, like for countries that are facing issues with global warming, like the Maldives, I think it could be a solution to their problems.
Pinsker: What was your first exposure to this industry? How did you get into islands?
Krolow: I've always been crazy about islands. Ever since I was a kid, I remember looking at a globe and always—you know when you spin the globe and you close your eyes and you put a finger down and you're like, "That's where I want to go"? I was always landing on these tiny islands in the middle of the Pacific. And I was like, "Aw! That's so cool! I wonder what that's like!" And God, if only Google Earth had existed when I was a kid, that would've been probably all I would've done.
When I was around 11 or 12, I had stayed on a friend's island. There are lots of islands here in Canada. It had a cottage. There were lots of little islands around it, with two or three that were just outside a little bit, maybe 15 feet, from their boathouse. And the one island was so cute. It was basically a little rock, and it had a couple of pine trees on it—big enough to pitch a tent, and that's it. There wasn't even enough room to build a little campfire or anything like that. So, my friend's parents let us set up camp on the island. And we did. And it was probably the most remarkable experience I had up until that time.
Pinsker: Perhaps this is a counterargument to owning any kind of vacation home, but to me, a disadvantage of owning an island is that you're tied to one vacation destination. What is the appeal of islands, travel-wise? Why would someone want to own one, given the logistical hurdles?
Krolow: I think most people who do it are looking for a project. And I was sort of thinking the same thing: What do I need an island for? Through our clients, I spend a lot of time on other islands. And for me, I don't actually get to spend all that much time on my island. I would give anything to spend a whole month in the summer on mine because I don't need any more traveling.
I think someone who buys an island usually gets very involved. Where's the house going to go? It's the biggest question. It's not something you leave to the architect. It's something that, you walk the island for days and you figure it out. Where is the guest house going to go? Do you like sunset views? Do you like sunrise views? Can you get both if you find a nicely elevated part of the island where you can have it all?
Pinsker: How much time do you spend on your island every year?
Krolow: That's a really sad question for me to answer because sometimes I don't get to spend much time at all. The seasons here are short, I'm constantly traveling in the winter, and I do that on purpose so I can at least spend a few weeks. This summer, I'm hoping to get at least four weeks on the island. And maybe another week before we close up in late September.
Pinsker: Can you say how much time per year the average person you sell to spends on the island they purchase?
Krolow: That's tough because we have some clients that actually live on their island most of the year. Generally, I would say four to six weeks. And that's not a lot. So if you're in the market to buy, you need to ask yourself realistically how much time can you actually spend there.
Pinsker: You've touched on this a little bit, but I'm curious to hear a full answer: You've spent decades in this industry, and I wonder if you can pinpoint what it is that makes people want to buy islands. You've talked about the celebrity aspect—there's undeniably a glamour to it—but is it also just the concept of owning a chunk of land? And how many people are just living out their childhood dreams?
Krolow: If you're someone who just needs to constantly be near restaurants and stores and so forth, it might not be right for you—people who don't like to spend time alone, or people who don't like to get their hands dirty. Something is going to happen. The dock's going to come loose. The battery for the solar panels is going to need to be changed. Something is going to happen and people need to be prepared for that.
I think there's something about an island—of being surrounded by water—the fact that you can own this little piece of the world. It's the closest you can get to having your own kingdom. A lot of people take a lot of crap throughout their lives from their bosses, their jobs, and sometimes their families. The island is a place to get away from all of that.
For me, the place I go to in Georgian Bay, I spent years searching for because I had learned quickly that the first island I bought was just too far away. So, I could tell people I owned an island—great, the CEO of Private Islands Inc. owns an island. But I had only been there a couple of times. I camped on it once, and it was hell.
But this place, it takes me two hours to get to by car. I can leave my office at 5 p.m. on a Friday. I'm at the marina at 7 o'clock, and I'm on the island at 7:30. Turn on the water pump, make sure the generator is working, and all that's done. Now it's 8 o'clock. The sun is starting to set. Now I open up the bottle of wine. I'm sitting on my deck. I swear to you, the wine tastes better. The food tastes better. Everything is just better because it's you built this island. It's yours. It's yours tomorrow. No one's going to be there in the morning telling you to get off.
This article was originally published at http://www.theatlantic.com/business/archive/2015/05/why-do-rich-people-want-the-hassle-of-owning-an-island/392606/