Groundhog Day 2009 was a turn-ing point for Providence Homes. While many builders remained holed up waiting for signs of an economic spring thaw, the Jacksonville, Fla.–based builder stepped boldly into the cold dawn, carrying with it the Genesis Collection, a plan series designed for a new and different market climate.
It wasn’t long before the competition found itself largely overshadowed by this midsized local builder. The Genesis Collection accounted for 75 percent of Providence Homes’ 239 gross sales in 2009, catapulting it to the No. 2 spot among single-family builders in Jacksonville. It finished the year second only to D.R. Horton in its market, beating out other heavy-hitters such as KB Home, Richmond American, and Lennar.
By mid-year 2010, Providence had already sold another 100 Genesis homes with the same value proposition: super-efficient, Energy Star–certified homes at a competitive price point (starting around $140,000), with the promise of contract to close in 90 days. The company, which didn’t even make the radar of the Builder 100 in 2008, saw its ranking jump from 146 in 2009 to 116 in 2010, placing it at the vanguard of up-and-coming builders.
Getting to that magic place, however, took some intense work. It started in early 2009 when Providence Homes president Sean Junker arranged a charrette with the architects at BSB Design. This included a week-long “Lean Blitz” during which the builder and its trade partners scrutinized every line item in the supply chain and weeded out waste—both in terms of materials and cycle time.
“We met with 25 different subcontractors to identify and eliminate hidden costs such as dry runs for subs and unnecessary trips,” explains Providence marketing director Mike Fox, noting that this practice has since become a monthly exercise. “Our trade partners also helped us identify different products and applications to reduce costs.”
The architects, meanwhile, focused on value-engineering from a design standpoint. “Our philosophy was to try and do something very efficient,” says Deryl Patterson, a partner with BSB Design’s Jacksonville office. “The idea wasn’t to take existing plans and make them cheaper. We didn’t want to cannibalize and undervalue the company’s other plan offerings. Instead we designed new plans that were buildable at a different price point.”
One guiding principle that lowered construction costs considerably was a “no beam rule” made possible by squaring up the box on two-story plans. “If the two boxes stacked on top of one another are the same size, you don’t need beams because the exterior walls are all bearing walls,” Patterson explains, “whereas if the second floor only covers half of your garage, you need a beam to pick up the exterior wall and roof load of that second floor.”
Further savings were achieved by minimizing circulation space, eliminating redundant rooms (formal living and dining), offering single-height kitchen island countertops in lieu of raised bar configurations, nixing fireplaces altogether (an option few Florida buyers cared about, as indicated by previous sales records), and trading the his-and-hers closets that were popular during the boom for one large walk-in closet. “This gave us more hanging space and cost less because there’s only one closet door,” says Patterson.
The design mandate wasn’t all slash and burn, however. Some upgrades were deemed worthwhile, including nicely articulated elevations; large island kitchens; 2x6 exterior walls; low-E windows; and high-efficiency HVAC systems. Earlier this year, Providence Homes received an Energy Star Leadership in Housing Award for the 91 high-performance homes it completed in 2009, which are collectively estimated to save customers $40,677 annually on utility bills. All of its sales thus far have been presales, Fox says. (The company only recently introduced its first furnished model.)
Building on the success of its inaugural four base plans, Providence Homes has since expanded the Genesis Collection to include 14 plans: two 40-foot plans; six 50-foot plans; and six 60-foot plans.
“Part of our strength as a local builder is that we can stop and change on a dime,” says Fox, noting that the time frame from charrette to finalized plan offerings back in early 2009 was a mere three weeks.
“We’re giving customers the ability to build and personalize their new energy-efficient home in less time and for the same price or less than some of the foreclosures and short sales in the area,” he says. ”The nationals compete with us on some of those attributes but not the combination of all of them.”