Bright Ideas

Homebuilding companies all over the country include the word innovation in their their company's name or in a company slogan describing the work they do. In fact, innovation, or some derivation of it, might be the most popular word that home builders use to describe themselves. Embracing and demonstrating innovation, however, is a lot harder than claiming it. In this special feature, BUILDER profiles four companies—three builders and a developer—that over the years have made innovation the driving force of their business models. They have been willing to take chances, try new things, lead rather than follow, and are making money doing it. Their areas of focus—workforce housing, energy-efficient construction, customer satisfaction, and community development—also give them a decided edge at a time when all builders are struggling to find customers.

Mix and Match

Frank Spadea was still fuming a week after the city council of Virginia Beach, Va., on Aug. 28, rejected a proposal from his company, Franciscus Homes, to develop a patch of farmland into a residential community to be called Village Bend, with 150 tenplexes and 106 single-family detached homes. The rebuff was ironic, given that on that same day Virginia Beach passed its first workforce housing ordinance, the requirements of which Village Bend met fully. The statute provides a 30 percent density bonus for builders that set aside 17 percent of homes within a neighborhood for buyers whose incomes fall between 80 percent and 120 percent of Virginia Beach's $64,600 area median income.

But in May, Virginia Beach had already restricted construction on all land zoned R10 to R40 (that is, zoned for 10,000- to 40,000-square-foot lots). The land Franciscus wanted is zoned R15. “Frank was asking for an A12 zoning [12 homes to the acre], which was a 300 percent increase in density,” explains Sharon Prescott, development administrator for the city's Department of Housing. “Village Bend is a wonderful plan,” she concedes, but it was in “direct conflict” with the city's comprehensive plan, which prohibits “spot rezoning.”

The 71-year-old Spadea, who started Franciscus Homes in 1976, disputes Prescott's characterization of his plan and has choice words for planners and politicians who “are just winking at affordable housing” but “cave in” at the first clang of NIMBY noise. Spadea admits, though, that he didn't do a good-enough job explaining the benefits and concessions of his proposal. “We needed to set up a workforce workshop for the council members,” says this former schoolteacher, “because they didn't understand what our proposal was about.”

His setback in Virginia Beach didn't leave Spadea wracked with self-doubt about the potential of workforce housing or the processes Franciscus employs to build these homes profitably. In fact, he's taking this formula on the road through licensing and possibly franchising agreements that provide other builders with detailed, Web-supported starter kits.

Credit: David Sharpe

MULTIPLE CHOICES: Franciscus Homes' tenplexes provide the density this builder needs to offer affordable options to buyers. Frank Spadea, Franciscus' owner, is also trying to get municipalities more involved in helping buyers finance their homes.

“What Frank wants to do is unique, different, and powerful,” says Mitch Rouda, BUILDER's former editor and once an executive with Trophy Homes. Rouda is now a principal, along with Spadea and NVR's former CFO Jim Martell, in Workforce Housing Partners (WHP), a Washington-based entity they created to sign up builders as licensees. Rouda says the appeal of Franciscus' workforce model is that the homes produced “are affordable, some are hyper-affordable, and the whole [community] looks good.”

Spadea's affinity for workforce housing is a natural outgrowth of Franciscus Homes' product and pricing evolution. Franciscus is on track this year to build 89 homes, almost all of them condos averaging 1,650 square feet and $267,000. (The company will also build another 90 houses through joint ventures with other builders, including its longtime partner Napolitano Builders, a local competitor.) Its core product and bestseller in many communities is a tenplex with stacked flats that allows Franciscus to get up to 16 units per acre. The tenplex's quasi-modular design and floor plans are adaptable to three-, four-, and fiveplexes, as well as single-family homes with rear- and entry-loaded garages. “We only really have four products,” says Spadea, which have been in his playbook, with only minor changes, for 10 years.

Over the years, Franciscus Homes has moved toward having three components in all of its communities: attached and detached homes with rear- and entry-loaded garages that retail for between $270,000 and $300,000; and the tenplex, which is Franciscus' workforce product. (The workforce component, in fact, is now part of the builder's entitlement process.) Product diversity gives Franciscus the density it needs to offer some affordable homes that don't skimp on quality, but still achieve a community-wide gross margin of 32 percent (and a net profit of between 9 percent and 11 percent) on projects it typically budgets at $10 million each. To hit that profit mark, Franciscus' fundamental metric is that its land, materials, and labor costs don't exceed 65 percent of a home's selling price. “It's all about ratio management,” Spadea says.

Franciscus is always looking for ways to produce more-affordable products that appeal to a wide cross section of buyers. Two years ago, it launched its Value Included Pricing (VIP) program, offering homes with plenty of standard features such as energy-efficient design and upgraded finishes but few, if any, options. The standard stuff costs Franciscus $7,000 to include but provides a $20,000 value to customers, in Spadea's estimation.

He also wants to involve more lenders and municipalities in workforce housing. One such idea is Rainbow Solutions, a unique financing program that would help qualified workforce buyers lower the cost of a home purchase by having a lender accept as a down payment a second mortgage in the form of a lien against the value of the property, at no cost to buyers until they resell the house. For each successive year, the lien is reduced by 5 percent. (There's a good chance it could be adopted by Isle of Wight, Va., where Franciscus expects to file applications for the program with the city by year's end, says the builder's president, Gary Werner.)

Spadea is trying to interest municipalities in a “shared appreciation” financing program, a variation of Rainbow Solutions where cities accept the lien and then take a cut of the appreciated price when the buyer resells the house. Given that most people move well before the lien would be reduced to zero, Spadea sees shared appreciation as a revenue generator for cities, which could use that money to fund other workforce housing projects.

In recent years, through a division within his company called Franciscus Home Partners (FHP), Spadea has ventured into licensing to assist other builders that want to get into multifamily and workforce construction. FHP provides everything from feasibility analyses and architectural plans to estimating, marketing, and sales training. “Their program was pretty much established, so why reinvent the wheel,” says Jay Wood, who owns J.A. Wood Corp., a Richmond, Va.–based contractor that entered into a licensing agreement with Franciscus in 1999 and has built 206 homes under that pact. He says the fourplex models have sold particularly well.

Workforce Housing Partners wants to carry the FHP concept beyond Virginia. And how WHP emerged is a story in itself. Last year, Spadea was on the verge of selling Franciscus Homes to Hovnanian Enterprises. Brokering that deal was Martell, who admits he had little knowledge of or interest in work-force housing at the time. Spadea backed out of this deal at the last minute because he wasn't comfortable with where it might leave his employees. But Martell was intrigued with Franciscus' business model and looked closer at the workforce sector. What was missing, he concluded, was a way to transport workforce solutions to other markets.

Spadea foresees a financing component that would help licensees get their workforce projects started. “There is a tremendous amount of equity” available for affordable and workforce housing, says Rouda, including possible funding from Fannie Mae, which Martell says has shown far greater willingness lately to funnel big dollars through fund managers to invest in workforce projects.

Rouda and Martell met at the International Builders' Show last February with builders interested in becoming licensees, and Rouda confirms that he's been talking specifically to one builder in St. Louis (which he declined to name). Spadea points to Florida's Volusia County, which has “a robust workforce housing ordinance, but not enough builders interested,” as the kind of market WHP would target. The principals expect WHP to sign its first licensee by the first quarter of 2008, and while Rouda thinks only a handful of deals will be in place by the end of next year, “we are building this to become much larger, eventually.”

Greener Pastures

Vernon McKown calls his company, Ideal Homes in Norman, Okla., “the greenest builder in America,” and he's one of the few builders who can back up that boast. Ideal built the first Energy Star–rated home in the U.S. priced under $150,000, as well as the first home certified under the U.S. Green Building Council's LEED design and construction benchmarks. All of its homes, on average, are built 44 percent better than what local codes require, and 50 percent above HVAC codes. Over the past five years, Ideal's houses have lowered their owners' cumulative energy bills by nearly $4 million.

But McKown, Ideal's kinetic CEO, is quick to note, “we didn't just wake up one morning” and become an energy-efficient builder. It's been a systematic progression since 1990, when, at the suggestion of its HVAC contractor, Ideal went with a $250 air-conditioning unit that reduced homeowners' cost of operation by 25 percent. Its success at selling homes with that A/C unit gave Ideal its first inkling of how energy efficiency might be a powerful competitive advantage. But it also discovered that home buyers and contractors needed coaxing before they would accept the rationale for environmentally friendlier homes, and that the snail's pace of new-product development often dictates process improvements. Ideal's vice president of purchasing and estimating, Russ Gammill, says he wonders at what point building green might reach a point of diminishing returns.

At the very least, getting Ideal's homes to be, say, 50 percent better than code could be a steeper hill to climb, McKown says. “All the easy stuff is gone. But there's not a day that goes by that we don't look at new technology.” Creating demand for energy-efficient homes is also a challenge at a time when “green” still means different things to different customers. “No one wakes up worrying about their utility bill, and you can't explain what a low-E vinyl window does in a quarter-page ad,” says Steve Shoemaker, Ideal's director of marketing. So Ideal has equipped its sales offices with flatscreen TVs, which its sellers use to educate customers about energy efficiency and environmental protection. Given that Ideal depends on referrals for one-third of its business, the energy efficiency of its homes “becomes the strongest arrow in our salespeople's quiver,” says Shoemaker.

Credit: James F. Wilson

IDEAL COMBINATION: Energy efficiency and cost savings are the focal points of Ideal Homes' sales pitch and drive its operations, whose team includes, from left, marketing director Steve Shoemaker, president of construction Todd Booze, and vice president of purchasing and estimating Russ Gammill.

Outside of its sales offices, Ideal wants customers to see the environmental soundness of its communities in their connectedness with their surroundings. Ideal has created more open space in some communities, which might include 15-inch-deep ponds that act as “wetlands” and nitrogen filters for larger natural ponds. The builder's Trail Woods community recently received approval to connect with a 15-mile-long section of Oklahoma's Legacy Trail system, a natural walking viaduct.

The path that Ideal Homes took on its way to becoming a green builder wasn't paved purely with eco-conscious intentions, however. At first, its officials readily admit, the company embraced energy-efficient construction techniques as a way of cutting down on warranty callbacks and raising prices. Ideal found that it could upgrade its houses to standards set by the Department of Energy's (DOE's) Energy Star program for less than $1,000. And by 1998, Ideal was justifying the cost of its houses, which were 5 percent to 10 percent higher than competitors', by claiming its homes could save owners $600 to $1,200 per year in energy costs. “People understand that,” says McKown.

Ideal was also willing to experiment on this front. In 1998, it agreed to build, in two of its subdivisions, an American Lung Association Health House, which emphasizes durability and cleaner interior air quality. Those were the first Health Houses constructed for under $500,000 (Ideal built them for $112,000), and they became “a huge P.R. success,” says McKown. Unfortunately, “they didn't sell,” says Mack Caldwell, Ideal's recently retired architect, which told Ideal that energy-efficient homes might have some commercial limitations.

Nevertheless, Ideal was fully committed to energy-efficient construction. That same year, Mark LaLiberte, president of the Minneapolis–based consultant Building Knowledge, introduced Ideal's officials to the DOE-sponsored Building America project, which conducts systems engineering audits to make new and existing homes more efficient. To implement Building America's design and construction principles and science, Ideal teamed up with Westford, Mass.–based Building Science Consulting to build test homes in 2000. Through that alliance, Ideal got involved with Masco Contractor Services' Environments for Living (EFL) program, whose construction standards follow Building America's specifications. As part of its program, EFL calculates how much energy a new home should need, and more than 1,000 of Ideal's homes built this decade guarantee what their owners' annual utility bills will be.

Betsy Pettit, president of Building Science Consulting, credits Ideal's owners for wanting to make changes “and not stand still.” LaLiberte goes one step farther, calling Ideal's homes “absolutely extraordinary, especially at that price point.” (Ideal's homes range from $110,000 to the low $300,000s.)

When it first embarked on green construction, Ideal would have been stopped in its tracks had it not gotten its contractors on board. “The trades are the key” to green building, says Ideal's president of construction and co-owner, Todd Booze. Shoddy product installation will defeat any energy-efficient design: Booze points to one recent DOE study that found that a typical house loses 25 percent of its energy output through leaky ductwork alone. He notes, too, that improper installation reduces the R-value in fiberglass insulation (which is why, he explains, Ideal favors blown-in insulation). The trades that most affect the energy efficiency of Ideal's houses are those installing framing, insulation, and the mechanicals—all of which, Booze points out, are energy rated. Over the past few years, Ideal has reprogrammed the scopes of work its trades do, so they aren't retracing their steps and costing Ideal more money, to build its homes.

Caldwell thinks the next big step for builders could be their efforts to reduce the more than 15 percent of all carbon dioxide emissions that homes produce. But how that happens could take years to resolve, so Ideal Homes is focusing on making incremental process improvements. “Every two years or so, we innovate,” observes Caldwell. For example, Ideal has been monitoring a zero-energy house it built in 2005, which generates some of its own power. Over that same period, Ideal has tested a home that uses wind power, says Shoemaker. This summer, Ideal's insulation supplier, Owens Corning, took infrared photos of some of the builder's homes to find trouble spots for leakage. And Ideal recently built a 1,600-square-foot house whose $200,000 cost included a $35,000 photovoltaic-cell energy system.

Credit: Ideal Homes

ENERGY ALERT: Ideal Homes' marketing materials show where its homes save buyers money, through either their products or construction techniques.

Gammill says Ideal is constantly looking for products and technologies that can bring it to the next level of energy efficiency. Tyvek's ThermaWrap housewrap is one such item, as preventing water intrusion is seminal to preserving a home's durability. Another promising technology is electrically powered ground-source heat pump systems, which use the earth's relatively constant temperature to provide heating, cooling, and hot water. Ideal can equip a home with this system for around $2,000 (down from $15,000 several years ago), and the builder is putting this technology into some of its custom homes as well as eight houses it's building with Habitat for Humanity. McKown notes, however, that these systems need to be placed 200 feet underground, and Ideal's pump supplier, ClimateMaster, doesn't have enough drilling equipment to accommodate a production builder such as Ideal that's building 500 homes a year.

Ideal must stay abreast of the latest technology because other builders are finally catching up. LaLiberte tells BUILDER there are at least 82 green building programs in the works nationally. He thinks it's wise for Ideal and other builders to promote energy efficiency now because “the energy picture isn't getting any better, and it isn't rocket science to do the math. Buyers are smart enough to say yes when you explain to them that if they spend $18, they will save $36.”

Back and Forth

Heidi Sowatsky, a 47-year-old interior designer, says that she was asking “a lot” before she would agree to purchase a house from Hayden Homes, a St. Louis–based custom builder. She wanted the master bedroom moved to the back of the house, so it could access the patio; a redesign of a large bonus room upstairs to accommodate a big bay window; and the installation of a humidifier/waterfall on the staircase landing leading to the bedrooms of her three teenage daughters. Most important, Sowatsky needed an addition for office space that would be connected to the family room, with access to the garage so she could load and unload her business materials into and out of her car more easily.

Sowatsky says she and Mike Treacy, Hayden's sales and community manager, worked out these design details over a two-month period before construction of the house got started in Hayden's Manors at Heritage Trails community in St. Charles, Mo. The result: a 400-square-foot office was added, at a cost of $50,000. And the bay window gives the bonus room “the best view in the house,” says Sowatsky. All told, after the additions, changes, and options were in place, Heidi and husband Bruce, who is executive director of the Children and Family Services program in St. Charles, paid $785,000 for a 5,500-square-foot home with a 1,500-square-foot finished basement, whose base price had been $480,000. “We love the house,” says Sowatsky, who is looking forward to staying there a long time. “My office could eventually be used as living quarters for my nurse,” she jokes.

Since the early 1990s, Hayden Homes has involved its customers intimately in the pre-construction process of designing their homes. The input it solicits from them also informs the design and options choices that Hayden offers in subsequent neighborhoods it develops. Post-sale surveys of every buyer, which St. Paul, Minn.–based Woodland, O'Brien & Associates has conducted for Hayden Homes for 20 years, find a consistent 95 percent would refer this builder to friends and family. “Sometimes, it's 100 percent,” says Keith O'Brien, one of the consulting firm's principals. “Hayden teaches customers what to expect from the home buying process.”

Hayden Homes usually builds around 50 homes a year and generated $34.1 million in sales in 2006. It celebrated its 30th anniversary this year, and during most of that time it's kept its customer satisfaction successes to itself. But an award by St. Louis' Better Business Bureau in 2004 and mentions this spring in a front-page story in The New York Times and on Good Morning America (which each played up a room in one of the builder's homes that owners use to separate a snorer from other sleepers) let the cat out of the bag. The company has started promoting itself a bit more aggressively of late, too, and recently developed brochures that include an insert called “The Promise,” which explains the customer-relations process.

Credit: Hayden Homes

ACTIVELY ENGAGED: Dennis Hayden (right), president of Hayden Homes, talks with two interested customers, Scott and Lauren Kolbe. Hayden Homes involves its customers to an unusual degree in the pre-construction process of the homes they buy.

Customer outreach is essential in a market such as St. Louis, which doesn't have much population turnover. “Home buying is more on discretion than a necessity,” says Joe Zanola, owner of The Zanola Co., a market research firm that, for several years, has created profiles of prospects for each of Hayden Homes' communities, prior to their getting started, by combining customer information from the builder's database with its own demographic analyses. “We shape the entire community experience,” says Zanola. Hayden's rep at Zanola, Angie Slayton, notes, by way of example, how her company helped the builder “reinvent” the information center at its Summit at BaratHaven community in Dardenne Prairie, Mo., by turning the center into more of a gallery. Zanola also helped promote a walking tour of Hayden's Summit at BaratHaven community via direct mail, posters, and a popular local fair. “You have to plant a seed here,” says Slayton, “because buying a home is like a retail decision.”

Hayden Homes became more “customer-focused” because its president, Dennis Hayden, was frustrated by all of the change orders his company was getting in the middle of construction. “Things always fell through the cracks, and then you'd have a dissatisfied customer,” he recalls. So the builder began educating customers about available options and compelled them to make decisions—during four or five “let's get started” meetings—before it would start the house. This process over 62 days includes putting together a “personal design plan” and taking customers to jobsites to see how their homes would be positioned. “We listened and gave them information, with the benefit being the home would be built on time and on budget,” says Hayden.

The process has improved Hayden's communications with architects, contractors, and product suppliers. It also gives Hayden better insight into buyers' changing preferences and tastes. For example, a few years ago buyers were already telling the builder that master bathrooms were getting too large, and that great rooms were less desirable because of their heating and cooling costs. Customer input also helps minimize the risk of trying new things, as Hayden did in St. Charles when it first experimented with three-car, front-entry garages, merging the master bedroom with the library to create a master suite, and incorporating the kitchen and living-room space and moving the breakfast table to a small niche with its own window. Hayden notes that by doing all the architecture for these rooms up front, construction costs fell to between $9,000 and $25,000 per room, versus initial estimates of $30,000 to $40,000. “In some cases, we didn't even have to make the rooms bigger.”

Using feedback from buyers at Heritage, Hayden Homes developed 10 new house plans, and this summer built models in three subdivisions with optional main-floor guest suites. Some models include a new feature for this builder: outdoor living rooms, about which Zanola did extensive demographic research to determine which type of room might sell best. Hayden is tricking out these models with chandeliers, ceiling fans, TVs, and furniture, even see-through fireplaces that connect the outdoor area to the great room inside. The builder can offer outdoor living rooms for between $12,000 and $25,000, depending on how the room is affixed to the house. “And we're inviting people to tell us how they might use that space,” says director of marketing Kris-ten Hayden.

Dennis Hayden, her father, hopes that customer input might provide some clues to help his company come up with designs for homes it can sell in the $300,000 to $400,000 range, compared with its current average selling price of $700,000. This is an important shift for Hayden, as the market for big, expensive homes diminishes and as the builder targets younger buyers seeking affordability. “That's an underserved market in St. Louis,” says Zanola.

LIFE'S A BEACH

By the Sea

St. Joe's WaterSound project reflects this developer's penchant for strong design and environmental preservation.

Northwest Florida's Panhandle hasn't been one of the Sunshine State's strongest magnets for homebuyers or builders, despite its breathtaking coastline and crystal-clear waters. But that hasn't stopped St. Joe, the Jacksonville, Fla.-based developer that, as of June, controlled 739,000 acres of land in that region. For the past several years, St. Joe has been developing communities distinguished by their attention to architectural detail. These include The Town of WaterSound, near Panama City, which Joe started in 2001. The first two communities within that town are nestled along the Gulf of Mexico. And now St. Joe is looking to transport the beach experience three miles inland to WaterSound's third community, which it started building earlier this year. "We always want to be positioned to provide connectivity to the Gulf," says Tom Dodson, vice president of St. Joe's western division.

The master plan for the 1,400-acre inland component, situated between the Intercoastal Waterway and Lake Powell, calls for a build-out of 999 single-family homes and 256 attached residences, interconnected by a pedestrian road system and ensconced within large open areas of natural habitat, parks and lakes. Many of the homes being built in this phase will be more affordable than some of Joe's over-the-top beachfront properties (like its mammoth Gatehouse at WaterSound Beach). This phase also includes the developer's first modular product. In July, Joe forged a strategic alliance with Haven Custom Homes, a Linthicum, Md.-based manufacturer known for producing high-quality houses, to provide modular units to several of the developer's communities. Since disbanding its homebuilding operations last year, Joe has been striking relationships with a number of builders to be able to offer a wide range of homes. "We're much better at creating special places," explains Dodson.

What attracted Joe to Haven was the 3,600-square-foot Idea House that Haven built for Southern Living magazine on WaterSound's premises. That house drew more than 25,000 visitors while it was open to the public from June 16 and September 30. Tom Watson even left Southern Living to become Haven's vice president of its preferred builder program because he was "so excited" about the builder-developer alliance. "St. Joe recognizes the benefits of building in a controlled-climate factory environment," says John Ragland, Haven's executive vice president of acquisitions and marketing, whose company has since built three other homes for Joe. The developer's interest in modular construction is also practical, given the relative shortage of skilled homebuilding labor on the Panhandle, notes John Kirk, a partner with Cooper Robertson & Partners, a New York-based architect firm that has worked with Joe on several other projects.

Credit: David Weekley Homes

David Weekley Homes is one of three builders active at WaterSound, located on Florida's Northwest Panhandle, which its developer, St. Joe Co., has incorporated into its natural surroundings of sea, wetland, and parks. This rendering shows one of Weekley's homes, which range from 1,800 to 3,400 square feet and from $309,000 to the low $500,000s.

Haven assembled its Southern Living home on WaterSound's premises, and Huff Homes, a Niceville, Fla.-based stick-built builder that is also active in WaterSound, put the finishing touches on that house. Buyers can also purchase unfinished lots at WaterSound (for between $150,000 and $200,000), and that, says Ragland, has opened Haven's eyes for the first time to the retail side of this business. It is working with Joe to enter several northwest Florida communities through a new turnkey homebuilding division that will market directly to the consumer. Haven might extend this to other markets like South Carolina, where Haven operates one of its two plants (the other being in State College, Pa.).

Stickler for detail

At first glance, WaterSound's houses seem like an odd amalgam of styles. The developer's "fact sheet" for the community describes, in architect-speak, the design as a "response to the early maritime villages of Nantucket - a merging of distinctive coastal shingled homes with Floridian vernacular building styles." Translation: New England Coastal that's been "Southernized," says Dodson, with roomier walk-in closets, master downs, and big family areas. Towers grace the roofscape, and awnings shade the windows. Joe's challenge was scaling that concept for the more affordable inland neighborhood without diluting its architectural integrity.

St. Joe has long had a reputation for being an architect's developer. "It's pretty sophisticated, from a design standpoint," says Jeff Dungan, president of Dungan Nequette Architects in Birmingham, Ala., which has worked on three of Joe's communities, including the initial phases of WaterSound. He says that Joe's own designers often have strong opinions about what they want, which can lead to debates "that go around the block a few times to get an answer." But Dungan's experience has been that the process improves in the product.

Steve Mein, president of David Weekley Homes' division in Panama City, one of St. Joe's builders in the inland neighborhood, initially found the architectural rigor that the developer imposes for its exteriors daunting. "There's detail on every rafter tail, and the roofs are not simple. There are also a lot of protrusions, so the homes are not all that cost-efficient to build." Still, Weekley has worked with Joe on numerous projects including its vaunted Celebration and Victoria Park, and was eager to make inroads into Northwest Florida, where there's not much big-builder competition. At WaterSound, Mein says Weekley wasn't willing to sacrifice the "signature" interior design, which emphasizes "flow and liveability." But he's found Joe to be an empathetic and amenable partner.

Weekley is building 1,800-square-foot homes on 50-foot lots, and 3,400-square-foot homes on 65-foot lots whose prices range from $309,000 to the low $500s. Dodson says that Haven's homes will range from 2,200 to 3,200 square feet and from the low $500s to the mid $800s; Huff's homes will fall within 2,000 and 2,800 square feet, and between $435,000 and $550,000. (The cost of the land adds anywhere from $150,000 to $300,000 to the prices.) The amenities completed this summer include a post office, pro shop, and fitness center. The second phase of the inland community will include an outdoor pool and park, and the third a "winter garden" with an indoor pool. Dodson says Joe hadn't determined which homebuilders it would bring on for subsequent phases, although Dodson says its multifamily component is likely to surround a proposed town center.

Natural fit

Residents of WaterSound can become members of Camp Creek golf club, the link between the inland and coastal communities, and have access to WaterSound's Beach Club. But the real selling feature of WaterSound's latest community is how the homes and amenities are integrated into the natural environment, to create what one architect calls a "bucolic" setting. One enters the community through an area where Joe has 500,000 square feet of entitlements for commercial development, which when completed will be separated from the residential component by about a mile and a half of natural environment.

"This development has fantastic natural features," says Doug Wright, a principal with Hart/Howerton & Associates, a New York-based architect firm that was one of WaterSound's master-plan designers. These features include wetlands, lakes, and "subtle changes in grade and sloping," says Wright. Many of the homes are positioned so their porches look out onto natural habitats or parks. Wright says the roads were laid out "so that people would always have a view of at least one element of the town; it's all knitted together."

WaterSound will also soon be "knitted," via Highway 98, to the new $330 million Panama City-Bay County airport, whose construction begins next year on 4,000 acres of land that St. Joe donated.