If January's massive International Builders' Show is about any one thing, it's about change. The convention features acres of the latest in products, designs, materials, processes, functionality—all of which tell a piece of the story of how Americans' dreams of owning a newly built home come true at a rate of about 33,000 a day. Some home building organizations are test laboratories for all that is changing so fast. From the precision squaring of foundations and wall-framing to automated rebate tracking to bar-coding home shoppers' design center choices to even-flowing deck construction and more, manufacturers and business software providers cited David Weekley's name to me time and again as an alpha tester of the latest in construction technologies and management systems.
“Yeah, we try a lot of new stuff all the time, and when it doesn't work, we go back and do it the old way we know how until something else new comes along for us to try,” says Weekley. Why not? Especially as the home buyer economy heads further into a harrowing tunnel of uncertainty and mixed signals. Better, cheaper, smarter, and faster ways of doing things will be part of winning market share at high profitability levels, no matter whether those ways are in construction, land acquisition, hiring, buying materials, or marketing and selling homes.
But, what doesn't change? In the business of home building, what doesn't change is that face-to-face is the best way to get certain things done. Technology allows us to be constantly in touch through many channels, but the caliber and focus of the people navigating the enormous hive of exhibits, stopping in at various booths, and taking meetings on and off the show floor is testimony to how central trust-building is in the business of home building.
Pulte's CEO reminded us of another thing that hasn't changed—and probably never will—about home building, no matter how big the big get and no matter how technologically advanced the business gets. It's the first, second, and third reason most people buy a particular home, new or existing: location, location, location.
Because those three reasons will almost certainly forever top the list of home buyer motivations, the big builder industry will always be a profoundly local business. That will remain true, even as the structures and business models that support it become more scalable, more iterative, and more national by the minute. As long as each piece of property has other property owners bordering it on all sides and sits within jurisdictional limits of a group of local decision-makers, the opportunities and constraints for developers and home builders are unique and particular to that geography.
Which is how Cornerstone Group Development partners Lenny Wolfe and Jorge Lopez exemplify just how suddenly an organization can morph from being a multifamily rental building and management power into a for-sale multifamily home builder. When they plunked down about $45 million in 2003 for an overlooked and underwhelming MacArthur Foundation property in Riviera Beach in Palm Beach County, Fla., they had zero local support for their affordable-housing development plan, which butted the neighborhood against a single-family development. So Wolfe, Lopez, and the other Cornerstone partners walked door-to-door in the neighborhood and visited people face-to-face. Eight months later, they got a 5-0 vote in favor of their rezoning proposal and a standing ovation at the city commission meeting that night.
“We come from the school of ‘the hungry get the prize,'” Wolfe says. They've got 10,000 for-sale homes in their pipeline, and plans to make Cornerstone a household name in Orlando, Ft. Myers, Tampa, and Naples. Senior editor Lisa Jackson's “Urban Showdown” analysis on page 52 profiles three companies in particular and a whole category of firms for big builders to watch. Diversification for multifamily rental construction and apartment management firms sometimes means stepping up as street smart competitors. They “get” local, and they “get” trust-building face-to-face; it's part of their DNA.