Professional Builder - February 2020 PDF

FEBRUARY 2020
MAKING
CONNECTIONS
THE NATIONAL SALES &
MARKETING AWARDS
ALSO IN THIS ISSUE

TNAH 2020: Kitchens & Baths 40
Reducing Cycle Time, Part 2 46
Infill Solutions 50
PROBUILDER.COM
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T HE NE W 2020 F O RD T R A N SI T.
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FEBRUARY 2020
VOLUME 85, NO. 2
11
EDITORIAL: What do buyers want?
13
EDITOR’S NOTE: You’re a concierge
15
NAHB BRIEFING: The latest federal tax package
17
HOUSING INTEL: Trends among today’s buyers
21
LEADERSHIP: Build homes faster
24
QUALITY MATTERS: Safe scaffolding
30
SALES + MARKETING: Making
Connections: Winners From
The Nationals Awards
40
<< DESIGN: Desert Oasis:
Kitchens and Baths of
The New American Home 2020
46
BUSINESS MANAGEMENT: Cycle
Time, the Gift That Keeps
on Giving
50
40 HOUSE REVIEW: Infill solutions
58
The “mini-master” bath of The New American Home NEW PRODUCTS: Roofing; apps for builders
2020 epitomizes the luxury and design diversity of
the home’s kitchens and bathrooms 66
Q+A: Katie Beck’s insights for streamlining
construction liability insurance
ON THE COVER:
Lido Villas by Landsea Homes, in Newport Beach, Calif., a Nationals Gold Award winner page 30
PHOTO: CHRISTOPHER MAYER, WITH PERMISSION OF LANDSEA HOMES
probuilder.com FEBRUARY 2020 PROBUILDER 9

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EDITORIAL:
What Do Buyers Want?

THAT IS THE EVER-PRESENT HEAD-SCRATCHER OF A QUESTION facing home builders year
in and year out. Article after article touts the newest architectural style, floor plan, appliances, surfaces,
lighting, windows, flooring, and technology that are the current must-haves for home shoppers. Com-
bine these with the ups and downs brought on by changing demographics, the stock market, mortgage
and employment rates, and urban or suburban preferences, and you have a stew of competing factors
that make it impossible to please many buyers.
All of the above are important to consider, but if you find yourself feeling like you’re trying
to attract homebuyers with an array of shiny objects, it’s time to step back and reexamine
your company’s basic premise. It’s far better to nail the overarching elements first before
thinking about which trends of the moment might succeed in luring new customers.
After plowing through a number of consumer preference surveys, it becomes clear there
are three fundamental components a majority of buyers agree are most important:
Sustainability: Whether you call a home green, energy efficient, or eco-friendly, energy-
saving features and low energy costs rank high on buyers’ lists of requirements.
Attainability: As home prices continue to escalate, creative solutions for density, smaller
footprints, sensible floor plans, and efficient building practices become ever more critical.
Healthy: A healthier living environment, including improved indoor air quality and the
use of nontoxic materials, offers buyers peace of mind when choosing a home to buy.
In an effort to get a closer look at how builders can best adhere to and apply these princi-
DENISE DERSIN
ples, Pro Builder formed a partnership with the Energy and Environmental Building Alliance
Editorial Director
(EEBA) and Denver-based Thrive Home Builders. For nearly 40 years, EEBA has been the
ddersin@sgcmail.com
home building industry’s leading provider of sustainable building information and education,
connecting its members with leaders in the high-performance home building community.
Thrive Home Builders has been a national leader in the design and construction of energy-
efficient homes for almost 30 years and has garnered 10 Grand Awards for Housing Innovation from the
U.S. Department of Energy. Thrive was Pro Builder’s Builder of the Year in 2017 and received National
Housing Quality Awards in 2018 and 2019, a testament to its operational proficiency.
Together we will build a home that will debut during the EEBA Summit in Denver, Sept. 29 through
Oct. 1, 2020. The finished product, an approximately 2,400-square-foot detached residence we call the
Ultimate Z.E.N. (Zero Energy Now) Home, will be self-powered, designed to produce as much energy as
it consumes, and certified by the U.S. Department of Energy’s Zero Energy Ready program. It will also be
LEED-rated and qualified by the EPA’s Indoor airPLUS program.
The home’s design, a collaboration between Thrive’s Eric Sung and architecture firm DTJ Design’s Seth
Hart, will offer a balance between beautiful design and modern living functionality, with a clean, simple
exterior and an open plan featuring high ceilings and large windows to offer both light and a spacious feel.
Pro Builder will cover the home in these pages and online throughout construction, culminating in
a feature story in December 2020. In addition to the EEBA Summit, Thrive will keep the Z.E.N. home
open for a year as a model. I hope you’ll take a look at it, in person or in these pages and on our website,
to get some fresh ideas about how to offer buyers more of what they really want.
STAY CONNECTED TO PROBUILDER

• The Housing Giants survey is now • Find extended coverage of The facebook.com/ProBuilder
live at probuilder.com/professional- Nationals winners at probuilder.com/
builder-2020-housing-giants-survey nationals-2020, and a complete list instagram.com/probuildermagusa
Let us know where you rank! of winners at thenationals.com

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EDITOR’S NOTE:
VOL. 85 NO. 2
3030 W. Salt Creek Lane, Suite 201

Arlington Heights, IL 60005-5025
847.391.1000 • Fax: 847.390.0408
You’re a Concierge
STAFF
BEFORE THE INTERNATIONAL BUILDERS’ SHOW last month, I called
EDITORIAL DIRECTOR my hotel seeking suggestions for a good breakfast place nearby to meet with
Denise Dersin
703.992.7640; ddersin@sgcmail.com
a source for an upcoming article; neutral ground, something local, and not a
EDITOR-IN-CHIEF
concession stand at the convention center.
Rich Binsacca
847.391.1011; rbinsacca@sgcmail.com
I know what you’re thinking: Why not just go on Yelp to find a top-rated res-
CONTENT MANAGER
taurant? Ultimately, that’s what I did because the “concierge” at my hotel, while
Ingrid Bush
202.780.9591; ibush@sgcmail.com
very nice, recommended only restaurants located within the resort.
SENIOR EDITOR
My (foolish and outdated) expectation was that the concierge, to
Mike Beirne
847.391.1051; mbeirne@sgcmail.com
ensure this guest (me) had a good experience and felt special and well
EDITOR, PRODUCTS
taken care of, would offer several options on and off the property—
Nigel F. Maynard
202.549.6552; nmaynard@sgcmail.com
ideally a quiet diner with great food frequented by locals, not tourists.
ASSOCIATE EDITOR
But this concierge offered a Chinese restaurant among the hotel-
Annie Cebulski
847.481.6164; acebulski@sgcmail.com
only options, forgetting within 2 minutes that I was looking for a
CONTRIBUTING EDITORS
breakfast—not lunch or dinner—place. I politely ended the call and
Larry Garnett | Bob Schultz | Scott Sedam went online, feeling stupid and definitely not special.
DESIGNER In selling new homes, you are a concierge for your company,
Larry Nigh
GROUP DIRECTOR – PRINCIPAL fielding calls, emails, website inquiries, and sales center visits from
Tony Mancini people who are interested but still curious, motivated but a little
484.412.8686; tmancini@sgcmail.com
DIRECTOR OF EVENTS lost, smart but looking for answers. This is your chance to make
Judy Brociek RICH BINSACCA,
847.954.7943; jbrociek@sgcmail.com
them feel special and to dig deep into their wants and needs to
Editor-in-Chief
SENIOR DATA & AUDIENCE serve them and deliver solutions that resonate.
DEVELOPMENT MANAGER rbinsacca@sgcmail.com
Ebony Fendley
I’m not suggesting a sales approach that leads your prospective
@ProBuilderMag
ASSISTANT DESIGN MANAGER buyers to consider, much less visit, homes besides your own (at
Dara Rubin least not on the first call), but I am intimating that the ability to
MARKETING DIRECTOR
Stephanie Miller
deliver a positive, personalized cus-
smiller@nimblethinkers.com tomer experience, especially from the get-go,
SUBSCRIPTION INQUIRIES
Professional Builder
is a critical driver in converting a prospect into
P.O. Box 300
Lincolnshire, IL YOUR ABILITY TO
a sale. And, if you can keep delivering that ex-
60069-0300 perience through the entire process, a satisfied
PBM@omeda.com DELIVER A POSITIVE,
847.763.4933 homeowner willing to refer you to others is the
Toll-Free | 877.501.7540 PERSONALIZED ultimate marketing goal.
REPRINTS
Tina Kanter CUSTOMER EXPERI- How? Listen first and write it down, then
847.391.1054; tkanter@sgcmail.com
ENCE IS A CRITICAL respond to prospects with answers (and more
CORPORATE DRIVER IN SALES questions) that show they’ve been heard and un-
CHAIRMAN EMERITUS (1922-2003)
derstood, and that you seek to learn more. Offer
H.S. Gillette solutions that align with their wants and needs.
CHAIRPERSON Be honest, always, about what you can deliver.
K.A. Gillette
CEO And, if your company truly and absolutely can’t
E.S. Gillette meet their expectations, bite the bullet and suggest someone who could. While
PRESIDENT
Rick Schwer that may seem counterintuitive, it will definitely impress them and create a pos-
COO itive memory that may someday bring them back or, even better, make them
David Shreiner
reconsider their options so they can buy from you after all.
SENIOR VICE PRESIDENT
Ann O’Neill Neglect that role and responsibility and you may find yourself on the wrong
DIRECTOR OF CUSTOM MEDIA & end of a Yelp review and competing with iBuyers and online searches and sellers
STRATEGIC PRODUCT DEVELOPMENT
John Atwood that at least make it easy, if not particularly special, to buy a home … and, most
likely, a resale at that. It may not be as simple as suggesting a good breakfast
For advertising contacts, see page 63 place, but it’s also not complicated.

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Circle 758
NAHB POLICY BRIEFING:
President Trump Signs Tax Extenders Into Law
J
ust before the holiday recess, Presi- RHA/VA insurance premiums. An income standards by 50%. Builders must have tax
dent Trump signed into law a tax cap starting at $100,000 applies. basis in the home, meaning they must own
package that includes a number of • The Mortgage Forgiveness Tax Relief and then sell or lease it, to claim the credit.
popular housing-related tax extenders. Act, which eliminates any taxes home- • The Section 25C tax credit for qualified
The bill contained several temporary tax owners may face after renegotiating the energy-efficiency improvements provides
items that expired at the end of 2017; the terms of a mortgage loan that resulted in a credit worth up to $500 for consumers to
new law extends them through 2020, and forgiveness or cancellation of all or part of install qualified energy-efficient upgrades.
also retroactively for 2018 and 2019. the outstanding loan balance on a princi- • The Section 179D commercial build-
Working with Congress, NAHB pushed pal residence. ings energy-efficiency tax deduction deliv-
for the following provisions: • The Section 45L new energy-efficient ers a deduction of up to $1.80 per square
• A mortgage insurance deduction that home credit provides a $2,000 tax credit foot for commercial and multifamily build-
gives taxpayers credit for premiums paid to builders for the construction of homes ings that exceed specific energy-efficiency
for private mortgage insurance and FHA/ that exceed heating and cooling energy requirements under ASHRAE 2007.
After record numbers of builders left the

industry during the Great Recession, produc- SINGLE-FAMILY HOUSING STARTS BY DECADE
tion has not kept pace with demand.
Single-family home starts of 6.8 million 14,000
over the past 10 years were far lower than
the numbers seen in the half century prior
12,000
to the downturn and are barely half of the
12.3 million homes started during the previous
decade. The figures are more striking given the 10,000
1
HOJUSING STARTS (IN THOUSANDS)
U.S. population increase over the period. Also,

despite adding nearly 1 million jobs to the sec-
tor since a low in 2011, overall job numbers in 8,000
construction have yet to fully recover.
Years of population growth and household
6,000
formations, along with reduced levels of home
building, have produced a critical supply short-
age. Yet surveys show homeownership remains 4,000
a goal for many consumers across all segments.
NAHB studied the paradox of declining inven-
tory, rising prices, and underperforming single- 2,000
family construction over the last decade and
found the lack of building is rooted in supply-side
0
headwinds that limit construction in expanding
1960s 1970s 1980s 1990s 2000s 2010s
PHOTO: TRONGNGUYEN / STOCK.ADOBE.COM
markets. The decline is tied to challenges related

to the five L’s: labor, lots/land, lumber/materials, SOURCE: NATIONAL ASSOCIATION OF HOME BUILDERS
lending, and laws/regulatory burdens.
ABOUT NAHB: The National Association of Home Builders is a Washington, D.C.-based trade association representing more than 140,000 members involved in home
building, remodeling, multifamily construction, property management, subcontracting, design, housing finance, building product manufacturing, and other aspects of
residential and light commercial construction. For more, visit nahb.org.

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HOUSING INTEL:
WHAT THEY WANT
Home-related factors in buying decisions
Larger house
35-54 57%
55+ 19%
TRENDS AMONG Higher-quality home

43%
TODAY’S BUYERS 35-54
55+ 27%
Larger yard
35-54 32%
By Rich Binsacca, Editor-in-Chief
55+ 14%
T
he best way to find out what pro- Lower maintenance
spective buyers want in a new home 35-54 16%
is to ask them. Whether you send a 55+ 44%
survey, query them in the sales office, or Smaller house
corner them at an event (ideally all three, 35-54 11%
and more), taking the pulse of your local 55+ 39%
market is critical to strategizing your ap- SOURCE: 2019 HOMEBUYER SURVEY, RCLCO REAL ESTATE ADVISORS
proach to that market.
By contrast, national trends, while not a WHEN THEY’LL BUY
precise indicator of local demand, can, and Timing of home purchase by age range
should, play a role in starting conversa-
Purchase in 2020
tions with local buyers to validate or tweak
55+ 26%
general trends to meet local preferences. 35-54 28%
This month, we share key results from <35 23%
three recent national studies looking at
consumer homebuying trends to reveal Purchase in 1-2 years
opportunities to create competitive dis- 55+ 45%
35-54 41%
tinction, get ahead of the curve, and sus- <35 42%
tain profitability.
Consider the data gleaned by RCLCO Purchase in 3-4 years
Real Estate Advisors showing unmet de- 55+ 28%
35-54 31%
mand (read: opportunities) to provide <35 33%
smaller, denser, and attainably priced hous-
ing in an “inclusive” master planned com- SOURCE: 2019 HOMEBUYER SURVEY, RCLCO REAL ESTATE ADVISORS
munity context, ideally on urban fringe

green- or brownfield sites with ready access BARRIERS THEY FACE
The top three barriers to buying a house
to existing infrastructure and services—
something Millennial buyers especially Saving for a downpayment
covet. “There are more people interested MILLENNIALS 48%
in making trade-offs for smaller homes and GEN X 40%
lots to buy in a master plan than we are BABY BOOMERS 31%
currently providing product,” says Gregg Homes are too expensive
Logan, the firm’s managing director and MILLENNIALS 41%
author of the study (see chart, next page). GEN X 35%
“And that model has proven to be profitable BABY BOOMERS 38%
for developers and builders.” Cost of living is too high
Other national trends that also can be MILLENNIALS 36%
predictive for local markets include tech- GEN X 33%
nologies that streamline homebuying and BABY BOOMERS 21%
selling. While not especially prevalent now, SOURCE: CLEVER 2020 MILLENNIAL HOME BUYER REPORT
options such as iBuying, virtual reality,
home trade-ins, and alternate mortgage ALL THREE COHORTS ARE GENERALLY ALIGNED on the barriers to buying a home, especially
financing (see chart, next page) are edging regarding home prices. That said, 43% of Boomers cite homes that do not meet their criteria as
toward the mainstream. PB the No. 1 barrier, while the younger cohorts are less picky.

HOUSING INTEL:
HOW THEY’LL BUY

The most impactful real estate tech trends
4.8%
UNMET POTENTIAL 7.6% ALTERNATE
MORTGAGE
Smaller homes not a priority in MPCs VIRTUAL 5.6%
REALITY FINANCING
HOME
TRADE-INS 0.2%
Under 2,000 sf 12% CRYPTOCURRENCY
ALL NEW-HOME COMPLETIONS 45% DIGITAL
PAPERWORK
POTENTIAL MPC BUYERS 39%
SUPPLY IN TOP MPCS 25%
2,000-2,999 sf
ALL NEW-HOME COMPLETIONS 27%
POTENTIAL MPC BUYERS 36%
3,000-3,999 sf 33.8%
ALL NEW-HOME COMPLETIONS 20% 25.2% NONE OF THE
IBUYING 10.8% ABOVE/OTHER
POTENTIAL MPC BUYERS 17% NOT SURE
SOURCE: HOMELIGHT TOP AGENT INSIGHTS Q4 2019 REPORT
Over 4,000 sf
ALL NEW-HOME COMPLETIONS 8% NEARLY 10% OF ALL HOMES SOLD in 2018
POTENTIAL MPC BUYERS 9% were to iBuyers such as Opendoor, Redfin,
SUPPLY IN TOP MPCS 8% and Zillow Offers. Nearly 18% of real estate
agents present iBuyer cash offers as an
SOURCE: 2019 HOMEBUYER SURVEY, RCLCO REAL ESTATE ADVISORS
alternative to traditional listings, but 98% of
DESPITE DEMAND for smaller, denser, and lower-priced units, master planned communities are those offers are rarely or never accepted.
often geared toward older and higher-income buyers and fail to keep up with (or trust the profit
potential) of a more diverse product and price mix to attract sales.
WHERE THEY’LL LIVE
Top 10 preferred states for retirement
among 55+ buyers
WHAT THEY’LL DO
The top three things buyers are willing to do to own a home
Rent-to-own
MILLENNIALS 34%
GEN X 29%
BABY BOOMERS 22%
Rent out a room to afford the mortgage

MILLENNIALS 18%
GEN X 16%
BABY BOOMERS 16%
FLORIDA 44%
Offer above asking price
ARIZONA 20%
MILLENNIALS 18%
GEN X 21% SOUTH CAROLINA 8%
BABY BOOMERS 14% NORTH CAROLINA 6%
NEVADA 5%
SOURCE: CLEVER 2020 MILLENNIAL HOME BUYER REPORT
TENNESSEE 5%
MORE SO THAN YOUNGER COHORTS, 26% of Boomers would do “none of the above” among TEXAS 4%
the options offered in this question, but just 7% of Millennials would take that tack. WASHINGTON 3%
IDAHO 2%
DELAWARE 2%
SOURCE: 2019 HOMEBUYER SURVEY, RCLCO REAL ESTATE ADVISORS
METHODOLOGY: The 2019 Homebuyer Survey from RCLCO Real Estate Advisors derived data from 3,000
WHILE THE MAJORITY of retirees rarely
respondents aged 18 and older with an annual income of at least $50,000 who are planning to buy a home
within three years. The Top Agent Insights Q4 2019 Report from HomeLight surveyed 500 leading real estate move out of state, the attractiveness of better
agents nationwide. The 2020 Millennial Home Buyer Report from Clever, an online real estate referral service, weather, lower taxes, and a master plan of
surveyed 1,000 Americans planning to purchase a home in 2020. like-minded residents draws some away.
18 PROBUILDER FEBRUARY 2020 probuilder.com

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Circle 760
Circle 761
LEADERSHIP:
Build Homes Faster

I
n 1999, when our company was explor-
ing ways to reduce cycle time, we de-
cided to find out how quickly we could
build a home under ideal circumstances.
Follow these steps to reduce cycle time and increase profitability The result: We completed a 2,200-square-
foot home in 4 ½ days—a total of 49 hours
By Mark Hodges of construction time.
The exercise not only gave us clues as
to how we might reduce ballooning cycle
times under “normal” conditions, but also
drew attention to what was truly possible
for our field teams and trade partners.
We learned that if you can remove all of
the “empty-house time,” maximize crew
sizes, plan properly, and execute down to
the minute, extraordinary speed and effi-
ciency is possible, even when the circum-
stances aren’t ideal.
Over the years, I’ve learned a lot about
building homes faster; enough to fill a book.
But I’ve boiled them down here to seven
ways (plus some extra tips) to cut cycle time
in today’s labor-constrained market.
1. Start with a realistic, achievable schedule

Many builders are using and distribut-
ing schedules that have no basis in real-
ity. They insist that if they publish a four-
month schedule (knowing it will actually
take six months to build the home), they
will magically build faster.
In fact, unrealistic schedules actually
lengthen cycle times, as field staff and
trades give up trying to meet them, instead
relying on phone calls and emails to keep
things moving.
Provide a realistic schedule, created in
agreement with all parties, and your teams
and trades will be able to follow it.
2. Update the status of every home each day

The last act of your field team every day
PHOTO: BILLIONPHOTOS.COM / STOCK.ADOBE.COM
should be to walk the homes and update

their status, and do so in a way that trade
partners can access that information im-
mediately to plan when and where to dis-
patch their crews.
Trades will send their best crews to
communities where they can rely on ac-
curate status updates, avoid dry runs, and
complete their work on schedule. If they

LEADERSHIP:
can’t rely on your status updates, your com- 5. Even out the release of homes for Extra tip: I further recommend that no
munity will be last in line when crews are construction homes be released to construction until
assigned ... and you’ll probably get the least- Often builders release homes for con- all of the customers’ selections are 100%
experienced or proficient of the lot, leading struction according to the rate of sales, since complete. If you give into the urge to start
to more delays. Don’t make trades send an they want to begin building homes as soon building after only structural selections
expensive foreman to find out! as the ink is dry on a new sales contract. are made, delays are inevitable when cus-
The trouble is that when you have a tomers conduct decorator selections later
3. Track empty-house days great new community opening and you sell in the construction process.
While estimates vary, it’s widely agreed eight homes in one weekend, the instinc-
that builders lose at least $300 for every tive reaction is to release them all for con- 7. Monitor trade crew sizes and “subs
day a home under construction sits empty. struction at the same time. But when sales of subs”
I estimate, with confidence, that of the dwindle to just two homes per month, the Honest trade partners admit they routinely
180 days it usually takes to build a home flow of work for trade partners slows and take on more work than they can reason-
once it’s permitted, the they send their crews ably manage with their current staff. When
home sits empty for at elsewhere. trades take this approach, they compensate
least 90. That’s $27,000 I recommend do- in two ways: they either send two guys
off the top! BUILDERS LOSE AT ing as much as you can when they need three to meet the sched-
When you start track- LEAST $300 FOR EVERY to even out the flow of ule (in an effort to keep the superintendent
ing empty-house days, DAY A HOME UNDER releases. If you’re build- from screaming at them for missing dead-
your field team will ing 50 homes per year, lines), or they subcontract work to other
focus more closely on CONSTRUCTION SITS start one home a week. companies.
making sure progress is EMPTY Eliminating the “pig Both scenarios have an extreme effect
made on every home, through the python” on cycle time. Smaller crews mean lon-
every day. Each day, will allow your trades to ger time in the homes (and schedule slip-
have them calculate how allocate resources more page), and ad hoc subs of subs don’t know
much money the company is losing when predictably and reliably, which will greatly the homes well enough to build them in a
homes sit empty. For example, 5 empty reduce the number of empty-house days timely or error-free way.
homes x $300 = $1,500 lost today. caused by the uneven flow of available Extra tip: Use the scope of work in your
work and will also keep your trades happy trade partner contracts to set crew sizes,
4. Create a Red-Yellow-Green report and showing up. demand full crews for each home, and
Invariably, superintendents focus most of require that trade partners notify you in
their energy on completing homes that 6. Prohibit all late changes to homes under advance if they intend to sub out your
are due to close (especially when they’re construction work. They won’t want to follow that last
behind schedule), while homes in the early I have a client who asked me to help reduce one, which means you’re more likely to get
stages of construction or built on spec in- his ridiculously long cycle times. When we their employees, not their subs.
variably fall behind. looked for root causes, we discovered he Another tip: Make sure your homes are
Combat this disparity by creating a was allowing buyers to make numerous 100% ready for each crew and trade, that
weekly “Red-Yellow-Green Report” for all changes long after their homes were un- is, broom-clean, all materials on hand, and
homes under construction. For reference, derway; in fact, the builder was averaging free of conflicting trades.
my system is coded so that RED means more than 10 late changes per home. Take these steps and, while you may
a home is 10 to 15 days behind schedule, His reason: He was agreeing to multiple not be able to build your homes in just
YELLOW represents a home that’s one to late change requests “to ensure satisfac- 4 ½ days, you will be able to build them
nine days behind, and GREEN is a home tion,” he said, but the delays and errors faster, better, and more profitably. PB
that is on schedule. caused by these changes were actually caus-
Review this report weekly with your su- ing high levels of dissatisfaction among his Mark Hodges is principal of
perintendents, which will force them to buyers and were resulting in huge losses Blueprint Strategic Consulting,
focus not just on homes nearing comple- due to longer cycle times and late deliveries. providing planning, organiza-
tion, but on all of their homes. I recommend no changes should be per- tional development, and qual-
Extra tip: Require that your supers pres- mitted once a home has been started. And ity management consulting
ent a plan to get all homes that are in a Red data and experience prove this policy does services to the home building industry. Write
or Yellow state back on schedule. not reduce customer satisfaction. him at markhodges1018@gmail.com.

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QUALITY MATTERS:
SAFE SCAFFOLDING
FOLLOW THESE TIPS TO PROTECT WORKERS AND REDUCE LIABILITY
By John Koenig
S
ome builders are surprised that To be effective, guardrails must be That’s just asking for a fine, or worse, a se-
IBACOS evaluates scaffolding as strong enough to keep a worker from fall- rious injury. A good pipe scaffold is a wise
part of its Construction Qual- ing, which means they must be able to bear investment that all of your trades can use
ity Assessment Program. As a life the weight of an average adult. To do so, repeatedly for small tasks.
safety item, however, a poorly constructed they must be made from something sub- It’s also important to protect people be-
scaffolding setup has potentially dire con- stantial, like wood or steel. It’s a sound andlow. Workers on the ground are at obvious
sequences for workers, as well as for the worthwhile investment. risk from head-crushing objects, such as
builder. As such, it should be built with as tools or bricks, accidentally being kicked
much care as the house itself. Exterior Setups: Invest in the Best off the walk boards. But if a non-worker
First step: Search for and read a few Scaffolding setups on the outside of the gets hit, the result likely will be an expen-
online articles detailing the basic OSHA- house are generally better, with most large, sive lawsuit. (And don’t assume that a policy
approved guidelines for safe scaffolding. exterior scaffolds having the necessary prohibiting unaccompanied homeowners
It’s always a good idea to refresh your components, such as on the jobsite will have
memory about what OSHA requires and rigid guardrails, cross foolproof enforcement.)
to adjust your practices, as necessary. bracing, and walking “Toe boards”—vertical
This article will highlight a few impor- surfaces. Sadly, the main boards placed at the in-
A GOOD PIPE
tant details I see ignored again and again reason for this diligence ner or outer edges of the
for interior and exterior scaffolding setups is that no one wants to SCAFFOLD IS A WISE planks (see top photo, at
and will offer some easy solutions. attract attention from INVESTMENT THAT ALL right)—can protect peo-
an OSHA inspector who ple from falling objects.
OF YOUR TRADES CAN
Interior Setups: Mind the Guardrails happens by. But another The ideal is to place toe
Scaffolds set up inside the house, for jobs reason is that exterior USE REPEATEDLY FOR boards all around the
such as installing ceiling molding or hang- scaffolds tend to stay SMALL TASKS scaffold, but at the very
ing and taping drywall in a two-story up for longer periods of least, put them where
vaulted space, are the worst offenders I time, such as a stucco walk boards cross points
see. Many of these scaffolds are assembled process of applying lath, of egress and traffic
and disassembled the same day, then reas- foam, and scratch and routes on site.
sembled at other locations in the house by final coats over several days. We also recommend that a scaffold-
hurried workers who don’t heed the need While most big siding crews use manu- ing system not in use be tagged with a
for safety as much as they should. factured scaffolds for whole-house jobs, sign reading “Controlled Access Zone.
The missing element on many inte- that’s not always the case for work done 10 Authorized Personnel Only” to help better
rior scaffolds is a proper guardrail, or any feet or less off the ground. There, we still ensure safety and proper protocols. PB
guardrail at all. I’ve seen some contractors see a lot of on-the-fly, field-built setups,
use rope or warning tape, presumably to but we advise builders against allowing this John Koenig drives quality and performance
alert workers when they’re about to step practice. OSHA provides detailed guide- in home building as a building performance
over the edge, but neither of those is at all lines for building these types of temporary specialist of the PERFORM Builder Solutions
good enough. scaffolds, but almost no one follows them. team at IBACOS.

DO THIS: THE CONTRACTOR ON THIS PROJECT
PLACED TOE BOARDS AT THE EDGE OF ALL PLANKS
TO PROTECT PEOPLE ON THE GROUND FROM
FALLING OBJECTS. AT THE LEAST, TOE BOARDS NEED
TO BE PLACED OVER POINTS OF EGRESS FOR
THE BUILDING UNDER CONSTRUCTION.
AVOID THIS: INTERIOR SCAFFOLDS WITHOUT GUARDRAILS

ARE ALL TOO COMMON ON RESIDENTIAL JOBSITES. THEY’RE
ALSO AN ACCIDENT WAITING TO HAPPEN.

LET’S FINISH THE JOB
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Circle 765
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SALES + MARKETING
MAKING
CONNECTIONS SELECT WINNERS OF NAHB’S 2020 NATIONAL SALES AND MARKETING
AWARDS, ”THE NATIONALS,” SHOWCASE THE BEST IN GETTING — AND
KEEPING — HOMEBUYERS ENGAGED
BY CAMILLA MCLAUGHLIN
KISSING TREE delivers a playful, captivat-

ing approach at its Welcome Center, including
nostalgic touches that resonate with the 55+
active adult community’s target buyer.

BEST COMMUNITY WELCOME CENTER
move-down homebuyers. The objective
KISSING TREE was to spark aspirational interest in its
BROOKFIELD RESIDENTIAL / brand beyond a specific product or market
CREATIVE LICENSE by focusing on the emotional investment
INTERNATIONAL in a new home, which was an innovative
SAN MARCOS, TEXAS strategy for Toll. “At the heart of every
homebuying experience is a personal, emo-
AT KISSING TREE, the design of the wel- tional journey, and we wanted to recreate
come center is as dynamic as the commu- some of those experiences familiar to so
nity. Rectangular and square panes of glass many homebuyers,” says Wendy Marlett,
and streamlined timbers create an almost the company’s chief marketing officer.
transparent elevation that’s inviting and To underscore the passion new home-
syncs perfectly with the 55+ active adult owners often experience, Obsession was
community’s Texas Hill Country setting. chosen as the theme for the campaign,
Inside, a 26-foot-tall abstract wood with a specialized landing page on Toll’s
sculpture of a tree reaches up to the ceil- website centered on that theme, followed
ing and “grows” out from a bar at the cen- by a succession of images of rooms, homes,
ter of the space, which also includes iconic and outdoor spaces geared to spark inter-
reminders of the ’60s and ’70s, such as est and evoke an emotional response.
8-track tapes, and muscle cars cut in half Posts on Twitter and Instagram focused
to provide seating for a video wall show- on obsession-worthy touchpoints of new
casing community activities. There are homes, such as indulgent baths and to-die-
also interactive information kiosks about for kitchens. Facebook posts highlighted a
the residences and an architect’s studio to range of spaces and elevations designed to
select and customize homes. dazzle. A set of videos and a hashtag were
“The playfulness and interactive nature created, as well as an Instagram Story brack-
of the displays invite potential buyers to et challenge where the public could vote for
engage,” says Claudia Gerster, founder and their favorite home images. Vendors and OBSESSION shook up the luxury production
owner of Creative License International, internal sales team members also used the market with a creative and engaging social
the agency behind the center’s design. She hashtag to create additional traction. media campaign targeting well-heeled buy-
says the firm’s goal was “to exceed the ex- From February through May of 2019, the ers, resulting in greater brand awareness.
pectations of visitors and create a desire to campaign’s 74 posts led to 29,000 social
be a part of the active, engaging, fun, and media engagements, 6,300 video views, and
healthy lifestyle at Kissing Tree.” 15,800 blog page views, the latter with an
Despite some lessons learned along the impressive on-page average of 5:49 minutes.
way (namely, adding a greeting stand at
the entry to welcome visitors during busy BUILDING INDUSTRY COMMUNITY SPIRIT AWARD
times), sales at Kissing Tree have increased PROJECT KUDOS
since the center opened and are expect- SCHELL BROTHERS
ed to continue to exceed expectations, REHOBOTH BEACH, DEL.
Gerster says.
RECOGNIZING GOOD WORKS among
BEST SOCIAL MEDIA CAMPAIGN employees and giving attaboys to one an-
OBSESSION other is a practice that began 14 years ago
TOLL BROTHERS / at Schell Brothers and is now standard. But
CRAFT WORLDWIDE the company wanted to also spread that
NATIONWIDE culture of happiness and gratitude to the
communities in which it builds. The re- PROJECT KUDOS originated as an internal
AS PART OF A BROADER BRAND aware- sult—Project Kudos—encourages and fa- program at Schell Brothers. Today, it’s a
ness campaign, Toll Brothers turned to cilitates ways for members of the commu- valued and ongoing community asset that
social media to reach luxury move-up and nity to say thank you to anyone who makes fosters happiness and gratitude.

SALES + MARKETING
their day awesome and to express gratitude further complicated premarketing. The
for things they appreciate. “It really reso- solution: a digital campaign to entice lo-
nates with people,” says Alyssa Titus, the cal Millennials to consider a place histori-
builder’s director of marketing. cally viewed as a suburban family location.
Launched in September 2018, Project “We had to get a little edgy with our videos,”
Kudos is now fully branded, with a decked- says Lyndsay Fuller, director of marketing
out old-school bus covered in thousands for Pardee Homes’ Los Angeles and Ventura
of Project Kudos stickers, bringing those markets. “It was all about evoking lifestyle
and really being able to segment the brand
in a fun, playful way.”
The campaign included publicity, e-
“WE’RE AUTHENTIC WITH OUR blasts, progress updates, invitations to
MISSION, SO COMMUNICATING special events, and social media posts, in-
THE MESSAGE IS EASY.” cluding a community blog. Video was criti-
cal to highlighting lifestyle and aspects of
—ALYSSA TITUS, the community. As a result, Pardee began
DIRECTOR OF MARKETING, drawing a completely different buyer pro-
SCHELL BROTHERS file at Skyline, and TRI Pointe saw sales
boom at both community locations.
SKYLINE used multiple digital media tools, Fuller attributes this success to proper
such as HTML email blasts (above), to differ- planning, proper segmenting, great cre-
entiate itself from other communities nearby. messages (and the opportunity to add ative partners in Wick Marketing, and
more) to schools, businesses, and festi- shared intelligence from TRI Pointe divi-
vals. It also has a following on social media. sions around the country. “That definitely
After the bus visits a school, it provides a gave us a competitive edge,” she says.
Project Kudos board to continue the prac- Launched in July 2018 and geared to a
tice there. Currently there are 85 “Kudos November grand opening, the campaign
boards” throughout Virginia and Delaware, helped drive 2,500 new registrants to a VIP
with plans in 2020 that include visiting a list of prequalified buyers, and one of the
local charity each month. four neighborhoods within Skyline was
The biggest challenge in making the one of the fastest-absorbing communities
concept a reality, Titus says, has been in Southern California.
manpower, as the bus is out and about al-
most every week. “The company has em- BEST LIFESTYLE PROGRAM – COMMUNITY
braced giving back to the community, and LIVE SMART AT HARVEST
this is a great way to talk about our culture HILLWOOD COMMUNITIES /
and our brand,” she says. “We’re authentic FIRSTSERVICE RESIDENTIAL
with our mission, so communicating the ARGYLE, TEXAS
message is easy.”
HILLWOOD COMMUNITIES debuted
BEST DIGITAL MARKETING CAMPAIGN its new “Live Smart” lifestyle program at
SKYLINE Harvest, a 1,200-acre master planned com-
LIVE SMART AT PARDEE HOMES / WICK munity that combines agrarian heritage
HARVEST offers MARKETING / OPEN LINE PR and country living with contemporary life-
residents a wealth of SANTA CLARITA, CALIF. styles. Concepts of connection, well-being,
one-time and ongoing enrichment, stewardship, and conve-
events geared to forge SELLING A NEW DEVELOPMENT before nience play out among a rich menu of 300-
connections, sustain having much to show on-site is a peren- plus one-time and ongoing events geared
interest, and contrib- nial quandary for developers. For Skyline, toward every age group and interest, pro-
ute to the greater having another TRI Pointe Group mas- viding residents with multiple opportuni-
community. ter planned community 10 minutes away ties to interact and forge connections.

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SALES + MARKETING
Central to the program is a working com-

mercial farm operated by a professional
farmer. Private garden plots and communi-
ty demonstration gardens resulted in more
than 1,100 pounds of produce for a local
food pantry last year, while donations from
events translated into 21,500 meals in 2019.
Key to the success of the program is a
partnership with residential property man- ONES TO WATCH
agement company FirstService Residential, MOLLIE ELKMAN AND
based in Dania Beach, Fla., which provid- WILL DUDERSTADT
ed lifestyle management services. “They We won’t say we told you so, but
shared our vision, established what we it came as no surprise to us that
wanted, and got the right people into the two of Pro Builder’s 40 Under 40
community to put it into action,” says recipients, Mollie Elkman (class
Taylor Negron-Campbell, Hillwood’s mar- of 2012, above) and Will Duder-
keting manager. In addition to orchestrat- stadt (2017, below), pop up on the
ing events, the on-site lifestyle manager Nationals radar as Ones to Watch
connects future residents with existing res- in sales and marketing.
idents who share similar lifestyle interests. Elkman, owner and president
The plan also ensures the program’s sus- of Group Two Advertising, in
tainability by enlisting the support of local Philadelphia, leads the full-service
businesses to supplement an allocation new-home marketing agency,
of HOA fees. When Hillwood moves on which specializes in connecting
from Harvest, “the program is going to be builders with buyers and has been
just as good, if not better, than it is now,” recognized three times as a Best
Negron-Campbell says. Place to Work by the Philadelphia
Business Journal.
BEST WEBSITE, BEST REALTOR PROGRAM, BEST Duderstadt, VP of Digital Mar-
COMMUNITY AMENITY, MARKETING PROFESSIONAL keting for M/I Homes, in Columbus,
OF THE YEAR
Ohio, oversees all online content
ARDEN and marketing campaigns, lead
FREEHOLD COMMUNITIES / generation, PPC, search engine
P11CREATIVE / O’DONNELL marketing and optimization, social
AGENCY / PEACOCK + LEWIS media, and content strategy for the
ARCHITECTS AND PLANNERS builder’s 15 divisions in 11 states.
PALM BEACH COUNTY, FLA.
ARDEN, A MASTER PLANNED develop-

ment by Freehold Communities, benefited
from (and earned Nationals recognition
for) the company’s Vital Communities
Core principles, which guide the creation
of community identity, amenities design,
and the overall aesthetics of the homes—
a program spearheaded by Suzanne Mad-
dalon, Freehold’s VP of marketing and the
Marketing Director of the Year recipient.
Arguably her most influential creation is
ARDEN applied core identity principles and the agrihood that serves as Arden’s central
leveraged its agrihood concept across mul- amenity. Not only does it invite resident
tiple platforms to drive traffic and sales. engagement, but it also enhances the sense

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DOORS | WINDOWS
SIDING | STONE | ROOFING Circle 768
SALES + MARKETING
of a lifestyle that promotes healthy living— Finally, the Lakehouse, Arden’s two-sto-
another value important to Maddalon. In ry clubhouse, received the Best Community
fact, Arden is South Florida’s first agrihood, Amenity Award. The design and amenities
and it immediately ensured a unique iden- are comparable to a first-rate resort, with
tity for this new community. “When we pools on two levels and a dramatic waterfall
introduced the ‘Welcome to the Agrihood’ linking the two, a casual café with free Wi-
campaign, it totally changed everything in Fi providing a place for residents to connect,
terms of traffic and sales,” she says. “People and private cabanas bordering the tranquil
were so interested in the activity created by upper-level pool and spa, among a host of
the agrihood.” other features.
In concert, Arden’s winning website
showcases lifestyle and amenities that in- BEST PRINT CAMPAIGN – SERIES OF ADS
clude 20 miles of trails, a mile-long center- SUMMERLIN—BE PART OF
SUMMERLIN went beyond price and location piece lake, and the 5-acre organic farm. The SOMETHING BEAUTIFUL
by appealing to the universal and unifying landing page features an image of a happy THE HOWARD HUGHES CORP./
human values of its target market. young boy reaping the rewards of a recent ROBERTSON+PARTNERS
farm harvest, and the page devoted to the LAS VEGAS
agrihood received 100% more page views
than any other. ENTERING ITS 30TH YEAR of develop-
“The website really sets the stage for our ment, Summerlin continues to be a vibrant
2020 NATIONALS story, and we continually update it with master planned community with a diver-
JUDGES new information to show what’s going on sity of residents and a range of lifestyle op-
Lyda Akin in the community,” Maddalon says. portunities and amenities.
VP of Brand, Recognizing that homebuying is no lon-
David Weekley Homes, Houston ger just about price or location or product,
Denise Dersin Howard Hughes’ marketing team sought
Editorial Director, Pro Builder/
“... THE ‘WELCOME TO THE AGRI- to design a campaign to appeal to deeper
SGC-Horizon, Arlington Heights, Ill. HOOD’ CAMPAIGN ... TOTALLY values. “An overarching brand position-
Chris Hartley CHANGED EVERYTHING IN ing should always communicate a unify-
VP of Sales and Marketing, ing position based on values shared by our
Trendmaker Homes, Dallas
TERMS OF TRAFFIC AND SALES.” target audiences,” says Danielle Bisterfeldt,
Linda Hebert —SUZANNE MADDALON, VP of marketing.
Principal, Diversified Marketing VP OF MARKETING, Central to the “Be Part of Something
Solutions, Pleasanton, Calif. FREEHOLD COMMUNITIES Beautiful” campaign is a series of print ads
Bill Pisetsky highlighting meaningful moments, from
Principal, Pisetsky Method a baby’s first steps and Little League close-
Marketing, Newport Beach, Calif. ups to inspiring high desert terrain and in-
Steve Shoemaker Arden’s Realtor program also earned ku- timate dinners at a Summerlin restaurant.
VP of Sales and Marketing, dos. Marketing director Susan Moguel de- The individual components of the cam-
Ideal Homes, Oklahoma City signed a series of on-site lunch-and-learn paign further break that idea down into
Ellen Weese events called “Arden 101,” offering exclu- relevant audience-segmented examples of
Principal and Head Designer, sive information from each builder and people enjoying life, Bisterfeldt says. “Life is
Five Star Interiors, Austin, Texas Freehold about the community, amenities, not made up of huge, transformative expe-
Kelly Ann Zuccarelli product lines, sales incentives, and lifestyle. riences, but is a collection of small, simple,
SVP, Wells Fargo Home Mortgage, After completing Arden 101, Realtors are beautiful moments.”
Red Bank, N.J. considered an official expert and receive a She adds, “People don’t relate to things or
custom USB with digital marketing ma- companies or products. Any truly success-
For extended 2020 Nationals
coverage, go to probuilder.com/ terials and photos. More than 250 agents ful brand must behave as an authentic, fully
nationals-2020 have graduated from the program, increas- actualized human being. Only then will
ing Realtor participation from 50% to 55% people relate to, interact with, and embrace
in just one year. your brand like a trusted friend.” PB

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Circle 771
THE NEW
AMERICAN HOME
2020
AN OASIS
IN THE
DESERT
THE KITCHENS AND BATHROOMS OF THE
NEW AMERICAN HOME 2020 PROVIDE FORM
AND FUNCTION FOR INDOOR-OUTDOOR,
MULTIGENERATIONAL LIVING
BY MICHELE LERNER
PHOTOS BY JEFFREY A. DAVIS
S Serenity and abundance. Comfort and

style. Luxury and convenience. These are the corner-
stones of the New American Home 2020, an oasis high
above the Las Vegas Valley designed by Dan Coletti and
built by his company, Sun West Custom Homes.
Within its 6,428 square feet of conditioned living
space—and another 1,250 square feet of outdoor living
areas—this single-level oasis in the desert offers kitch-
ens and bathrooms that exemplify a design intent for
multigenerational households and aging in place.
The main kitchen and its ancillary spaces, including
a clever indoor-outdoor nook, an extensive wet bar,
and an eye-catching wine room—each with its own
functionality and personalized twists—contrast with
intimate en suite bathrooms and morning kitchens
to perfectly balance privacy and togetherness, with
repeated patterns, textures, and colors that link them
into a cohesive, comfortable whole.

In the kitchen, a T-shaped island offers extensive
seating and prep space. An indoor-outdoor wet bar just
off the kitchen is easily accessible but also independent,
as is the nook, a casual gathering and eating space
(glimpsed at right) that’s also served by the outdoor
kitchen (see next page).

THE NEW
AMERICAN HOME
2020
The curving, full-height, glass-

enclosed walk-in wine room
(above) is both a visual and
physical element that effec-
tively encloses the dining room
to its left while maintaining
that room’s connection to the
kitchen, all the while showcas-
ing the owner’s wine collection.
A pocketing telescoping patio

door (seen tucked away on the
left) is the only barrier between
the indoor and outdoor kitch-
ens, which work independently
or as a unit. The cabinets and
quartz counters resemble their
indoor partners, while a kegera-
tor at the end of the counter run
is perfect for parties.

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Circle 772
THE NEW
AMERICAN HOME
2020
The sand-colored tile floor from the main living area flows into the master bath (top),
anchoring a freestanding tub and the floating navy-blue vanities set on opposing walls.
A glass patio door in the shower leads to an outdoor shower and admits natural light.
In a guest suite shower (upper right), clerestory windows afford privacy while daylight
streams in. The mini-master bath (above) and the study bath (lower right) feature
dramatic color schemes of their own, departing from the home’s blue hues. The former
also functions as a spa for the swimming pool and outdoor yoga platform. PB

Circle 773
BUSINESS
MANAGEMENT
CYCLE TIME
THE GIFT THAT
KEEPS ON GIVING
TIGHTLY MANAGED CYCLE TIME IS CRITICAL
FOR ACHIEVING SUSTAINABLE, PREDICTABLE
PROFITS. NEGLECT IT, AND YOU’RE PLAYING A
DANGEROUS GAME WITH YOUR BUSINESS
BY SCOTT SEDAM, CONTRIBUTING EDITOR
C
ycle time, as discussed in last month’s column “Getting
Serious About Cycle Time,” has inflated significantly
since emerging from the downturn, costing home build-
ers millions in lost profit. The U.S. Census Bureau num-
bers show the build-to-close schedule up 30 days since
2012. Take that on back to 2007, 13 years ago, right before
the hammer came down hard on home building, and everything
my TrueNorth team observes shows cycle time is up closer to 60
days, on average.
Cycle time is an insidious thing. For most builders, pushing back
a day here or there over the months-long course of building a new
home doesn’t strike them as disastrous. Annoying maybe, but nothing
to panic about. Losing one day out of 180 during an inflated schedule
gets lost in the process, making the slip of that day easier to stomach.
Besides, with around 26 Saturdays in a 180-day stretch, surely you’ll
make it up somewhere—or not. Drop that same day during a tight
90-day schedule, however, and there’s a good chance you’ll put your
critical path at risk. Just where do you make that day up?
PHOTO: JOKERPRO / STOCK.ADOBE.COM
THE IMPACT OF SCHEDULE CREEP

Sincere 90- to 120-day schedules for production builders were the
norm prior to the big crash, and 60- to 90-day schedules were not
unusual. Today, a no-tears assessment shows 150- to 180-day sched-
ules are closer to the norm, and you’ll often find higher. Woe be to
those who fail to turn over their assets at least two times, which is
the best 180 days will get you. Three turns should be the absolute
minimum standard, and four turns is an achievable goal for most.

Yet, in my travels around the country, I don’t find the same sense of expenses, finance costs, salaries, bonuses, benefits, etc. That $30,000
schedule urgency that existed 12 or 15 years ago. There are multiple in overhead leaves a nice pretax net of 10%, or $30,000 per unit.
explanations for this, but from what I’ve observed, the biggest cause It’s important to note: There are innumerable practices and philos-
is that builders don’t fully understand the scope, severity, or total ophies about where to put costs such as permits, development fees,
cost of the impact of lost schedule. It’s time to work on that. superintendent salaries, model maintenance, finance costs, etc.,
Last month’s column broke down cycle time into five distinct el- making builder-to-builder comparisons difficult. You may calculate
ements and discussed the ins and outs of calculation and how to your gross and net numbers differently, but the principles addressed
avoid common measurement pitfalls. Ongoing evaluation of cycle here apply, regardless. We work with many strong private builders
time and its components can’t be optional, just as closing your that do better than 10% EBIT (earnings before interest and taxes).
books and financial statements cannot be skipped. Many others, especially the publics, rarely reach that level, but 10%
If you do track cycle time and its components continually, your is above the national average and is considered a strong return.
processes will talk to you and tell you where the pain points and However, there’s one big difference between these two com-
losses are. This always works, but it begs sober, reflective insight, munities: Community A’s cycle time from foundation dig to close
not knee-jerk reaction over short-term variation in your processes. is 180 days—fairly typical in current times. Community B, on the
Wide-eyed caution is advised. If you neglect your cycle time mea- other hand, turns its homes out in 90 days—impressive and chal-
surements, fail to track them over time, and react to them ad hoc, lenging, but definitely achievable. Consider the impact of that
you are only guessing ... and that’s a lousy way to run a business. cycle-time difference.
UNDERSTANDING ABSORPTION RATE THE CRITICAL LINK

Bill Pulte, the very best of my mentors, used to say, “As goes the Many factors contribute to how well a project runs in the field, but
schedule, so goes the builder.” Absolutely nothing has changed about one thing’s certain: the job superintendent is the critical link. The
that statement in 30 years. For Bill, each day was a precious com- role is known by many names, including construction manager, proj-
modity, and the shared belief, which was part of the company cul- ect manager, or the thoroughly confusing “builder,” leaving people
ture, was a lost day could never be recovered. Yes, you might make puzzled as to whether we’re talking about the builder as the individu-
up a day on a Saturday, but there was a price to pay, both monetarily al or the company. Whatever you call it, the super is held accountable
and psychically. At Pulte, at least in those days, you lived and died by for meeting the schedule. If we launch on January 2 under the 90-day
“absorption rate”—the distribution of fixed cost over the number of schedule, we have closings available April 1. This community of 48
units built in a given time period. Bill Pulte preached this daily, along lots projected four per month, so we’ll close it out by April 1 of year
with admonitions to never neglect quality, customer satisfaction, two. Job well done. The most units this field manager would have to
trade relationships, or taking care of your own people. carry at one time would be 12.
Increasing absorption rate, while simple in concept, is harder to Now compare that with the 180-day schedule where the first unit
achieve: Build more units without raising overhead and everything isn’t available for six months, until July 1. The entire cash flow net of
gets better. Build fewer units with the same overhead and there goes the deposit is pushed back a full quarter. In the 90-day example, we
the Christmas bonus, next year’s raise, perhaps even your job. launch a house per week, and after three months, each start clears
Back then, communities doing 10 or 12 units per month were the schedule—and the ledger. In the 180-day schedule, that three-
the ultimate, but the corporate asset management team wouldn’t month delay before units sell causes them to pile on top of one an-
even entertain a new community pro forma from the field without other. We wouldn’t see revenue for six months, and the project ends
a solid projection of at least three units per month. Below that, the at the same 48 sales, but a full quarter later. WIP (work in progress)
numbers quickly turned south. Once it was agreed a community builds up significantly, requiring far more capital and more carry
could support the minimum unit requirement, projected pretax costs. I’ll leave it to your financial people to cost-out the impact on
net wasn’t enough on its own. Our internal rate of return was heav- profit, but it is significant, and I’ll wager it’s larger than you expect.
ily dependent on cycle time. You could meet the minimum units Your pretax net may still look fine, but your return on assets for a
with acceptable gross margin and pretax net, yet a slow cycle time one-year period falls precipitously.
could doom the project to failure. Consider the following example. How do you fix this problem on a 180-day schedule if you’re on the
We have two communities set up as LLC profit centers for the hook for 48 units in the same financial period as the 90-day communi-
same builder. Both will build identical plans with equal options and ty? Unless you have the wherewithal to make a completely focused ef-
selections, projecting four closings per month for a project total of 48 fort on cycle-time reduction, the only solution is to start more homes,
closings. The pro forma average sales price is $300,000, and the aver- carry more WIP, and place a heavier load on your superintendent.
age hard cost is 50% or $150,000, with an identical finished lot cost This scenario brings up one of building’s perennial questions: How
at 20% or $60,000, producing a substantial gross margin of 30%, out many homes can a field superintendent reasonably carry at a time and
of which we’ll pay for sales, marketing, general and administrative maintain schedule, quality, and supplier/trade relationships—not to

BUSINESS
MANAGEMENT
mention his or her own sanity? The old maxim for field construction INSIDIOUS IMPACT
management is “Every house, every day,” meaning the super inspects, The impact from overloading due to a drawn-out schedule isn’t
and something productive happens, on each house, each day. limited to the field superintendent alone. Similar effects are experi-
In a single community, it’s almost impossible to inspect, evaluate, enced by sales, the design center, purchasing, and administration of
and respond to the needs of 25 to 30 units per day, given all of the all forms. On the surface, if you’re putting out the same number of
activity house walks generate. In multiple communities, it’s physi- units annually, shouldn’t the amount of work be the same? Hardly.
cally impossible. There are heroes who try to pull it off for a period of If you double the number of units under construction, you have
time, and for a few builders that have homes so simple and repetitive, twice the WIP, twice as many customers to keep informed and hap-
with limited options and selections, high volumes can be done. Yet, py, twice the options and selections to track, and twice the oppor-
ultimately, for most supers, it’s a self-extinguishing practice. Twelve tunity for late changes. And everyone knows: When it takes longer
to 15 homes per day? An average superintendent with decent training to build, more things go wrong due to weather, theft, changes in
can handle that level (more or less), depending on complexity. With a trades, etc. I’ve written a great deal about complexity in the past,
lot of experience, simple product, and a tight process, I’ve seen some and extended schedules are a key culprit.
who can handle 18 or 20, maybe more for simple starter homes. Reducing cycle time and reaping the benefits isn’t an overnight
Back to our case study: At the end of the year, Community A with endeavor. Imagine your field staff ’s meltdown if you announced
the 180-day schedule has reached its 48-home goal but has also you were cutting cycle time in half. They already can’t keep up with
loaded up on starts early to meet the the current workload, and suddenly you’re going to cut
standard set by Community B. The their time to build? Instead, tell them you are signifi-
super is burned-out, running around cantly cutting the number of units each super manages,
every day with his or her hair on fire, and say nothing about cycle time. Their jubilation will
now looking for another job; count- A LONG, LOOSELY drown out the average New Year’s Eve celebration.
less problems and errors were missed, MANAGED SCHEDULE ROBS They’ll sober up quick enough when you add that
causing massive rework; suppliers YOU OF PROFIT AND IT to make those numbers work, you’ll all have to work
and trades were paid much later, together to significantly cut cycle time. How? Threats,
causing considerable unrest; the war- ROBS THE PSYCHE OF “just do it” memos, and incentive plans based in part
ranty burden soared; and customer YOUR PEOPLE, PLUS YOUR on things they don’t control won’t yield success, they
satisfaction has fallen. Pretax net is SUPPLIERS AND TRADES will just make things worse. To achieve significant and
good, but return on assets (ROA) is sustainable cycle-time reduction, you will need real
depressed due to the increased WIP thought and genuine change in your systems, process-
and slow take-down. Owners and in- es, and people.
vestors aren’t happy. As I finish writing this column the week before
Community B also closed 48 homes, with a cycle time of 90 days. Christmas, after doing some last-minute shopping (online, thank-
The superintendent carried 12 homes at any given time, getting into fully), it’s natural to think about gifts. Not many of us have ever
each home daily, staying on top of every need, and continually com- thought of cycle time as a gift, I’ll bet, but a tight building cycle and
municating with suppliers and trades. He also had time to talk with everything that goes with it will reward you each day of the year.
inspectors, homeowners, and even some prospective homebuyers However, it can also be that proverbial “gift that keeps on giving”
the sales team brought by the jobsite. Variance was minimal, prof- in the negative sense. A long, loosely managed schedule robs you
it up, quality great, and customer satisfaction strong. And, at four of profit and it robs the psyche of your people, plus your suppliers
turns, ROA is excellent, keeping the owners and investors happy, in- and trades.
deed. Now more money is available to the builder, and at lower rates, So, which will it be? It’s in your hands. We’re more than a month
meaning more units at higher profit. Everyone wins. into the new year and the clock is ticking on your cycle time. If you
Can this super now carry more than 12 homes at a time? That plan to reduce that time this year, you’d better get started. PB
depends on the product, process, and experience. If the homes are
second or third move-up, “high bling” with numerous plans, mul-
tiple elevations, and a large design center—and especially if the Scott Sedam is president of TrueNorth Development,
builder offers structural options—it’s rare to find a super who can a consulting firm that works with builders to im-
carry more than 12 or so on a 90-day schedule and do it well. In prove product, process, and profits. For a free PDF of
today’s reality, only a very small number of builders fit this descrip- Scott’s “Preparing for the Downturn” and “Bridging
tion and consistently build in 90 days. As you simplify product and the Margin Gap” column series, email your request
process, you can increase the load on your field managers, but a with contact information to info@truen.com. You
realistic assessment is required. may reach Scott at scott@truen.com or 248.446.1275.

© CAMBRIA 2020 || 385142_AD
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Photo credit: Roehner + Ryan Circle 774 SWANBRIDGE™

Featured project by AFT Construction
HOUSE REVIEW:
INFILL SOLUTIONS
By Larry W. Garnett, FAIBD,
House Review Lead Designer
T
he term “infill” historically refers to
new construction on either vacant
or tear-down sites in otherwise vi-
brant downtown areas. However, that defi-
nition is being expanded to mature subur-
ban areas and smaller towns in many parts
of the country. These quaint “downtowns”
often offer pedestrian-friendly environ-
ments and economical opportunities and
are especially appealing to retirees who are
no longer concerned about living near work
and are looking for a slower pace of life.
In the following pages, you’ll find projects
that range from a creatively sited multi-
story luxury project to a duplex in a small
town and a neighborhood within a master
planned community, providing thought- NOVA AT THE VALE, RESIDENCE 4
ful solutions for overlooked or challenging ARCHITECT
sites with designs that are compatible with Dahlin Group Architecture | Planning
existing buildings and homes. marketing@dahlingroup.com
925.251.7200
dahlingroup.com
DIMENSIONS
Width: 18 feet
Depth: 38 feet
Living area: 1,528 sf
In this master planned multifamily community

in the heart of Silicon Valley, Calif., great things
PHOTOS: EXTERIORS, DOUGLAS STERLING; INTERIORS, TRAVIS TURNER PHOTOGRAPHY

come in smaller packages. Intended to capture
the imagination of the Silicon Valley tech buyer,
the units range from 1,500 to 1,700 square feet
but are designed to live much larger. Residence
4 is a 1,500-square-foot plan with three en suite
bedrooms, a walk-in pantry, and a wide-open
living level—all of which accommodates various
household configurations.
A En suite bathrooms are an unexpected

upgrade and suit multiple household
formations
B Walk-in pantry reduces clutter
C Large common space is perfect for shared
living arrangements

B
FLOOR 1 FLOOR 2 FLOOR 3

HOUSE REVIEW: FIRST FLOOR FIRST FLOOR
PLAN 1 PLAN 2
SIX-PACK CLUSTER
ARCHITECT
Jeff Addison, director of design
Kevin L. Crook Architect
jaddison@klcarch.com E
949.660.1587
klcarch.com
DIMENSIONS
Width: 120 feet PLAN 3 PLAN 3
Depth: 130 feet
Living area (per unit average): 1,998 sf
B
PLAN 2X PLAN 1X
FIRSTDFLOOR D
This cluster module achieves a density of

10 dwelling units per acre, providing a detached
A
solution for infill sites. Parallel guest park-
ing is available on the street, and front doors SECOND FLOOR SECOND FLOOR
face the street to create a pedestrian-friendly
scene. The six homes in each cluster share a PLAN 1 PLAN 2
common drive aisle, which ends at a pair of
head-on guest parking spaces. The two-story
homes range from 1,854 to 2,142 square feet
with three to four bedrooms and are center-
plotted with reciprocal use easements between
homes to maximize usable yard space. Living
spaces for Plans 1 and 2 orient to the side
yard, while Plan 3’s living space orients to a
traditional rear yard.
PLAN 3 PLAN 3
A Guest parking on street
B Common drive aisle
C Head-on guest parking
D Porches and entries orient to the street
E Reciprocal-use side yards
PLAN 2X PLAN 1X

STRUCTURAL SOLUTIONS
ENGINEERED TO
DEFEND YOUR BUILD
™
LP WeatherLogic® LP Legacy® LP® FlameBlock® LP ® TechShield®

Air & Water Barrier Premium Sub-Flooring Fire-Rated Sheathing Radiant Barrier
Introducing LP Structural Solutions, a portfolio of framing

and sheathing technologies from LP Building Solutions.
Learn more at LPCorp.com/StructuralSolutions.
© 2020 Louisiana-Pacific Corporation. All rights reserved. Gorilla Glue and associated logo are registered trademarks of Gorilla Glue Company. LP, LP Legacy,
LP WeatherLogic, TechShield and FlameBlock are registered trademarks of Louisiana-Pacific Corporation.
Circle 775
HOUSE REVIEW:
ICON AT SILVERLEAF, PLAN 2

ARCHITECT
Craig Smith and Luis Enciso
Robert Hidey Architects
csmith@roberthidey.com
lenciso@roberthidey.com
949.655.1550
roberthidey.com
DIMENSIONS
Width: 48 feet
Depth: 72 feet
Living area: 3,174 sf
Situated on a narrow parcel between an exist-

A
ing residential community and a commercial
development, the challenge was to relate a
multifamily building to its very different neigh-
bors. Designed for California-based builder
The New Home Company, the four-story ICON
captures views of the golf course and Arizona B
desert and is located in Scottsdale’s prestigious

Silverleaf community, featuring resort-style liv-
ing that includes private pool cabanas, in-unit
wine rooms, and spa-like baths.
ICON’s private stall parking and semi-private
elevators demonstrate that privacy, security,
and luxury can be fully preserved in this
environment. Its modern aesthetic effectively
complements the rugged desert landscape,
while steel construction allows expansive,
uninterrupted interior spaces and extensive
decks with fully retractable glass walls that
blur the distinction between indoors and out.
A In-unit wine rooms

B Semi-private elevators
C Private poolside cabanas
D Desert contemporary finishes
E Steel construction enables expansive inte-
riors and seamless indoor-outdoor spaces D
C
PHOTOS: ERIC FIGGE PHOTOGRAPHY

DEFEND
YOUR
BUILD ™
AGAINST
HEAT
A
AND
HIGHER
BILLS
LP® TechShield® Radiant
Barrier, from LP Building
Solutions, helps reduce
cooling costs for smarter
home energy efficiency.
Learn more at:

LPCorp.com/StructuralSolutions
Defend Your Build™
LP® TechShield® LP Legacy® LP® TopNotch®
LP WeatherLogic® LP® FlameBlock® LP® SolidStart®
Circle 776
HOUSE REVIEW:
BLACK MOUNTAIN COTTAGES

DESIGNER
Larry W. Garnett, FAIBD
larrygarnett@larrygarnettdesigns.com
254.205.2597
larrygarnettdesigns.com
DIMENSIONS
Width (overall): 33 feet, 6 inches
Depth (overall): 48 feet, 6 inches
Living areas: 935 sf and 1,315 sf
An overlooked lot in Black Mountain, N.C., A
provided an opportunity to build two duplexes. B

The smaller Unit A has an open kitchen/living-
dining concept with one bedroom located on
the second floor, while the larger Unit B, with
the same open concept, but with a corner
kitchen, is a three-bedroom plan. Both units
offer spacious front porches, and three inset
parking spaces on the street and eight private
spaces in the rear provide plenty of parking for
the owners/renters and their guests.
A One-bedroom Unit A
C
B Three-bedroom Unit B
C Spacious front porches achieve equality
between units C
D Ample parking for occupants and guests
FIRST FLOOR

DEFEND
YOUR
BUILD ™
AGAINST
WATER
AND
WASTED
A
B TIME
LP WeatherLogic® Air & Water
Barrier, from LP Building Solutions,
helps avoid jobsite delays and
provides a tight building envelope
for long-term energy efficiency.
Learn more at:

SECOND FLOOR
Circle 777
PRODUCTS: ROOFING
TWO-PIECE SHINGLES
ZINC ROOFING Cambridge architectural
Rheinzink America’s architectural-grade zinc cladding— shingles from IKO feature a
Classic, PrePatina, and ArtColor lines—can be used on roofs laminated two-piece design
and walls. Roofing options also include panels and standing- that provides more depth,
seam (pictured below on sloping sections). The products dimension, and variation to
resist weathering and corrosion, the company says, and are achieve a wood-shake look,
self-healing and potentially last 100 years or more. the company says. (Shown in
For more info circle 800 Dual Black.) A nail line printed
on the shingles helps ensure
proper installation. Other
features: algae-resistant
granules, Fastlock sealant
on bottom edges to protect
against wind uplift, and a
heavy-duty fiberglass mat.
For more info circle 801
PORCELAIN ROOF TILE

The ceramic tile manufacturer Daltile has expanded its offerings
with Perennial Porcelain Roofing. The company says Perennial offers
the same look as other high-end materials but at a lower price point.
Using digital printing technology, Daltile creates colors, designs,
and details that replicate the real thing (such as slate, shown). Made
from porcelain, the tiles are frost-resistant, impervious to water, and
offer a 110 mph wind rating.
SYNTHETIC SHINGLES
The Nature Crafted Collection
of synthetic shake shingles from
DaVinci Roofscapes is available
in three natural wood looks,
including Aged Cedar, Mossy
Cedar, and Black Oak. The
shingles offer the look of real
cedar with the maintenance
benefits of a composite material
that won’t split, curl, or fade, the
company says.
CONCRETE TILE
Boral’s Texas Vista Collection is a line of concrete roof tile available
in shades that harmonize with the state’s architectural styles. The
product is made from locally sourced, naturally occurring geological
material and is durable, lasting, and low maintenance, the company
says. The new suite is available in two of the brand’s most popular
tile styles in the region: Saxony Country Slate and Shake. Shades
include Charcoal Brown Blend, Chestnut Burnt, Dark Bordeaux,
Weathered Greige, and Weathered Cedar (shown).

DEFEND
SLATE-LOOK METAL YOUR
BUILD
Generations Slate metal roofing ™
from EDCO Products combines
the brand’s ArrowLine panel with
high-definition coating technology
to produce a slate appearance.
AGAINST
FIRE
Offering the strength of steel,
with a multilayer PVDF “cool
chemistry” finish, the product can
AND
reduce energy bills and does not
support mold and algae growth, the
manufacturer says. Generations
Slate launches in early 2020 and will
be available in four colors.
FLAME
SPREAD
LP® FlameBlock® Fire-Rated

HIGH-DEF SHINGLES
Sheathing, from LP Building
GAF’s Timberline Ultra HD line is 53% thicker than standard
architectural shingles and features a dual shadow effect to Solutions, meets code, exceeds
achieve the look of real wood shakes. The shingles feature expectations, and gives
StainGuard Plus time-release technology, which fights algae homeowners peace of mind.
staining, and Dura Grip adhesive to reduce the risk of blow-off.
A range of colors is available (shown: Barkwood). Learn more at:
Circle 778
PRODUCTS: ROOFING
METAL PANELS
Pac-Clad’s Snap-Clad 24-gauge panels offer continuous
interlocking for improved structural performance and wind
resistance, the company says. A concealed-fastener clip
“... you guys got this right, the program is awesome… system allows for thermal expansion/contraction and helps
SoftPlan is the best and I have used them all..” to hold down the roof in strong winds. Panels are available
Andrew Bozeman, Montgomery, AL with a Kynar 70% PVDF finish in 45 standard colors.
Measuring up to 64 feet long, the panels shown below are
used in a standing-seam application.
ASPHALT SHINGLES
With its blended coloration,
Belmont asphalt roofing
from CertainTeed is
designed to replicate
the look of natural slate.
design | 3D | materials lists The shingle’s layered
construction is reinforced
with a fiberglass base
$95
mat for longevity and
aesthetics. It has a Class
A fire rating and 110 mph
subscribe to SoftPlan /month wind resistance. Class IV
impact-resistant options
are also available.
ZERO-WASTE SHINGLES
To deliver more coverage, Atlas Roofing’s HP42" roofing shingle
is 42 inches wide with an enhanced 6-inch exposure. This format
uses a seven-course, zero-waste offset installation, so installers
can run seven courses down the roof before having to reset,
cutting up to 4 labor hours off a typical job, the company says.
SoftPlan remodel
kitchens | baths | additions | $985
free trial: www.softplan.com or 1-800-248-0164
Circle 779
Circle 780
PRODUCTS: APPS
MATERIAL DELIVERY
Developed by a builder, RenoRun allows contractors to
use an app to source and deliver building supplies and
materials in less than 2 hours directly to the jobsite.
Ideal for renovations or new construction, the system SITE WALKTHROUGHS
offers two levels: flat-fee delivery or a monthly pro Using the Punch List & Site
plan that provides unlimited, free, same-day deliveries Audit app for Apple devices,
plus 50% off scheduled and express 2-hour deliveries. users can do a final site audit
Available for iPhone and Android devices. using the app’s simple interface,
For more info circle 810 then generate PDF files that can
be emailed from the construction
site. Punch List, the developer
Rojao says, helps builders
improve their productivity by
making site audits and punch-list
inspections quicker and easier
to carry out and manage. Ideal
for audits, walkthroughs, safety
inspections, insurance claims, site
walks, and checklists, the app is
free in the Apple store.
LEED DOCUMENTATION
Green Badger LEED-compliance documentation
software can be used by project teams of all experience
levels. Designed as a cloud-based technology with
project-specific training, LEED tips and tricks, and
ongoing project team support, the cross-platform solution connects team members
so everyone has access to real-time updates and can document from the field and
automate repetitive, time-consuming tasks. Available for iPhone and Android devices.
AFFORDABLE GAS
As simple as it sounds, vehicle gas prices matter to
a home builder’s bottom line, so the GasBuddy app
FIELD CALCULATIONS helps builders find the cheapest gas station nearby.
All-In-One Calculator is a free Users regularly add information on stations, prices, and
Android app that helps contractors distance. The developer has partnered with a handful of
and subs carry out construction- retailers, such as The Home Depot and Domino’s Pizza,
related calculations, such as unit on a GasBack program so builders earn free money
conversions, percentages, volumes, from purchases at those retailers. The discount is
areas, and proportions. Featuring automatically applied at the pump. The app is available
more than 70 calculators and unit in the Apple store or Google Play.
converters in several categories, the For more info circle 814
app supports temperature, length,
weight, area, volume, and many
other measurement units. Available
for iPhone and Android devices.

ADVERTISING SALES: AD INDEX:
GROUP DIRECTOR – PRINCIPAL INSIDE SALES MANAGER COMPANY PAGE # RS# COMPANY PAGE # RS#
Tony Mancini Richard Thompson
484.412.8686 | tmancini@sgcmail.com 952.449.1592 | rthompson@sgcmail.com BASF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 772 LP TECHSHIELD . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 776
DIRECTOR OF DIGITAL & DIRECTOR OF EVENTS CALCULATED INDUSTRIES . . . . . . . . . . . . . . . . . . . 65 788 LP WEATHERLOGIC . . . . . . . . . . . . . . . . . . . . . . . . . 57 777
BUSINESS DEVELOPMENT Judy Brociek
CAMBRIA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 774 LP FLAMEBLOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 778
Adam Grubb 847.954.7943 | jbrociek@sgcmail.com
317.219.7546 | agrubb@sgcmail.com CONTROL4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 761 MITSUBISHI ELECTRIC . . . . . . . . . . . . . . . . . . . . . . . 27 765
EVENT COORDINATOR
ADMINISTRATIVE COORDINATOR Meghan Voigt COUNTRY WOOD FLOORING . . . . . . . . . . . . . . . . . . 64 783 MOHAWK INDUSTRIES . . . . . . . . . . . . . . . . . . . . . . .4-5 752
Tina Kanter 847.954.7976 | mvoigt@sgcmail.com DRYERBOX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 762 NISUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 781
847.391.1054 | tkanter@sgcmail.com
PRINT ADVERTISING MATERIALS DRYER WALL VENT . . . . . . . . . . . . . . . . . . . . . . . . . 23 763 NISUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 785
VP STRATEGIC PARTNERS – Erica Rivera DUPONT PROTECTION SOLUTIONS . . . . . . . . . . . . . 8 755 OMEGA FLEX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 770
NATIONAL SALES MANAGER 847.391.1049 | erivera@sgcmail.com
Bill Black DUPONT PROTECTION SOLUTIONS . . . . . . . . . . . . 33 767 PROTECTIVE PRODUCTS . . . . . . . . . . . . . . . . . . . . . 65 787
267.483.8788 | bblack@sgcmail.com REPRINTS
FORD MOTOR CO. . . . . . . . . . . . . . . . . . . . . . . . . . IFC-3 751 PROVIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 768
Tina Kanter
VP STRATEGIC PARTNERS – 847.391.1054 | tkanter@sgcmail.com GEICO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 753 RELIANCE WORLDWIDE . . . . . . . . . . . . . . . . . . . . . . . 7 754
INTEGRATED MEDIA ADVISOR HOUSE DESIGNERS . . . . . . . . . . . . . . . . . . . . . . . . . 64 784 ROYAL BUILDING PRODUCTS . . . . . . . . . . . . . . . . . .14 758
Michael Stein LIST RENTAL INFORMATION
610.918.1828 | mstein@sgcmail.com Claude Marada ICC – INTERNATIONAL CONNECTORS . . . . . . . . . . .16 759 SEIHO INTERNATIONAL. . . . . . . . . . . . . . . . . . . . . . .61 780
claude.marada@infogroup.com
VP STRATEGIC PARTNERS 402.836.6274 IRONROCK. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 786 SIGNATURE KITCHEN SUITE . . . . . . . . . . . . . . . . . . .19 760
Patty Morin JAMES HARDIE BUILDING PRODUCTS . . . . . . . . . . 39 771 SKILLED LABOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 764
847.391.1027 | pmorin@sgcmail.com Bart Piccirillo
bart.piccirillo@infogroup.com JAMSILL GUARD . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 782 SOFTPLAN SYSTEMS . . . . . . . . . . . . . . . . . . . . . . . . 60 779
INTEGRATED MEDIA ADVISORS – 402.836.6283 KOHLER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 757 TAMLYN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 773
RESIDENTIAL MARKET
Jeff Elliott – Principal SUBSCRIPTION INQUIRIES LG HAUSYS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10 756 WELLBORN CABINET . . . . . . . . . . . . . . . . . . . . . . . . 37 769
616.846.4633 | jelliott@sgcmail.com Professional Builder
LG LAUNDRY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .IBC 789 WESTERN WINDOW SYSTEMS . . . . . . . . . . . . . . . . . BC 790
Eastern Canada P.O. Box 300
Lincolnshire, IL LP STRUCTURAL SOLUTIONS . . . . . . . . . . . . . . . . . 53 775 WHIRLPOOL . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28-29 766
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Q+A:
Assessing Risk for a Changing

(and Challenging) Industry
iability insurance underwriting for home builders has historically been an exercise
L in frustration, instability, and inconsistency both for builders and for the insurance
industry. The latter wants hard, timely, and comprehensive data to assess risk,
while builders live a life of latent defects, unpredictable warranty service calls, and chang-
ing market conditions that affect quality. Bridging that disconnect is what drives Katie
Beck, head of Home Builders at Berkshire Hathaway Specialty Insurance, in Shakopee,
Minn., who sat down with Jenny Simon, director of marketing communications at
IBACOS, a housing quality consultancy in Pittsburgh, on behalf of Pro Builder, to discuss KATIE BECK
Head of Home Builders
how builders, brokers, and underwriters can collaborate to achieve more reliable results.
Berkshire Hathaway Specialty Insurance
PRO BUILDER: Why is underwriting home commitment to quality. Builders also need their company and processes changed and
builders so difficult for insurers? to understand that the presentation they improved because of them.
KATIE BECK: This has long been a tough prepare for an insurer should vary from Every large loss should have a lesson
business for our industry in terms of losses what they prepare for an investor. What learned. The dichotomy of this is that an
and program structure because there isn’t sounds exciting to an investor—new prod- account could have no losses, but that
a ton of data we can get our hands on, ucts, a new target buyer, and new designs— doesn’t mean they are good; it could just
much less get our arms around, to evalu- may scare or concern an underwriter. mean they’re lucky. Alternatively, some of
ate risk in the way we traditionally evalu- the best builders in the industry have had
ate other industries. And the data we do PB: How do you best leverage builder data? some very hairy losses, but they’ve learned
get is old. Losses, particularly those associ- KB: Builders and insurers need to shift from them and have become even better.
ated with construction defects, take up to their focus to look at what the data and
10 years to be reported and even longer to the numbers actually mean. Underwriters PB: What’s needed to bring more stability
reveal the final cost outcome. should overlay statistics with qualitative and consistency to home builder insurance
With that, the quantitative data that ex- information, such as trends within the underwriting?
ists is extremely volatile due to the housing builder’s warranty data, whether concerns KB: The more insurers there are that un-
boom through the early 2000s, followed are being addressed, and how the cus- derstand the home building industry, the
by the steep decline in production in the tomer experience has changed over time. more stable insurance for the space will
late 2000s and into the 2010s. That makes Changes to construction products or prac- become. Often many carriers jump in and
it difficult for us to truly understand the tices are also important, as are shifts in a offer broad coverage without truly under-
home builder’s world. builder’s corporate culture or market, and standing it, only to subsequently drop the
whether they have invested in systems that line of coverage, which creates a culture
PB: How can builders best present them- improve their quality and processes. All of and reputation of instability in our indus-
selves to insurers? that has an impact on risk assessment. try for this space. But those that under-
KB: If you’re simply handing over loss stand it and dig into a builder’s story far
runs and closing figures to your broker or PB: If I’m a builder with some significant beyond the numbers can provide stable,
underwriter, they’re probably just turning losses, how should I handle that with my consistent coverage, especially for builders
over rates based on general assumptions broker or underwriter? that really care about quality. I am com-
and broad data. To get them to do more for KB: Builders shouldn’t be scared of their mitted to helping builders bridge that gap.
you, work with them to understand your losses. Instead, they need to use them as
“story”—the culture of your company, your an opportunity to showcase what they For the complete interview with Katie Beck,
internal processes, and your demonstrated learned from those experiences and how see probuilder.com/interview-beck

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FEBRUARY 2020

ALSO IN THIS ISSUE

Because your reputation

Visit us at IBS 2020 booth C5837.

Find your total building envelope solution

probuilder.com FEBRUARY 2020 PROBUILDER 9

No.1 Quartz Countertop by LG Hausys

What Do Buyers Want?

STAY CONNECTED TO PROBUILDER

probuilder.com FEBRUARY 2020 PROBUILDER 11

Log in today for training, tools and more at KOHLER.com/ProToolbox.

3030 W. Salt Creek Lane, Suite 201

probuilder.com FEBRUARY 2020 PROBUILDER 13

Learn more at CELECT.RoyalBuildingProducts.com or call 1.855.ROYAL85

President Trump Signs Tax Extenders Into Law

After record numbers of builders left the

U.S. population increase over the period. Also,

markets. The decline is tied to challenges related

lending, and laws/regulatory burdens.

probuilder.com FEBRUARY 2020 PROBUILDER 15

9" for townhomes 8" for apartments

888.792.7463 800.422.6191 800.847.5629 800.309.2322 801.484.5238 800.238.0787

TRENDS AMONG Higher-quality home

munity context, ideally on urban fringe

probuilder.com FEBRUARY 2020 PROBUILDER 17

HOW THEY’LL BUY

Rent out a room to afford the mortgage

SOURCE: 2019 HOMEBUYER SURVEY, RCLCO REAL ESTATE ADVISORS

18 PROBUILDER FEBRUARY 2020 probuilder.com

Build Homes Faster

1. Start with a realistic, achievable schedule

2. Update the status of every home each day

should be to walk the homes and update

probuilder.com FEBRUARY 2020 PROBUILDER 21

22 PROBUILDER FEBRUARY 2020 probuilder.com

Delivering Serious Performance And Aesthetics

24 PROBUILDER FEBRUARY 2020 probuilder.com

AVOID THIS: INTERIOR SCAFFOLDS WITHOUT GUARDRAILS

probuilder.com FEBRUARY 2020 PROBUILDER 25

KISSING TREE delivers a playful, captivat-

30 PROBUILDER FEBRUARY 2020 probuilder.com

probuilder.com FEBRUARY 2020 PROBUILDER 31

32 PROBUILDER FEBRUARY 2020 probuilder.com

Visit us at IBS 2020 booth C5837.

Central to the program is a working com-

ARDEN, A MASTER PLANNED develop-

34 PROBUILDER FEBRUARY 2020 probuilder.com

When Performance Matters.

36 PROBUILDER FEBRUARY 2020 probuilder.com

SENSIBILITY Stylish comfort is in your reach with simple, clean

S Serenity and abundance. Comfort and

40 PROBUILDER FEBRUARY 2020 probuilder.com

probuilder.com FEBRUARY 2020 PROBUILDER 41

The curving, full-height, glass-

A pocketing telescoping patio

42 PROBUILDER FEBRUARY 2020 probuilder.com

Learn more at www.construction.basf.us

44 PROBUILDER FEBRUARY 2020 probuilder.com

BY SCOTT SEDAM, CONTRIBUTING EDITOR

THE IMPACT OF SCHEDULE CREEP

46 PROBUILDER FEBRUARY 2020 probuilder.com

UNDERSTANDING ABSORPTION RATE THE CRITICAL LINK

probuilder.com FEBRUARY 2020 PROBUILDER 47