Canadian homebuilding company finds opportunity in Houston area
launch Native the Houstonian company’s James Texas Miller homebuilding joined Toronto-based division in 2016. Empire The privately Communities owned to company came to the Houston area to expand outside of the Toronto/southwestern Ontario area five years ago. So far, the company has developed several Texas communities beginning with Hidden Lakes in League City. It now builds homes there, in addition to Dellrose northwest of Houston, Fairway Farms in Tomball and Woodforest on the north side. Miller, who spent more than 26 years at privately held McGuyer Homebuilders, visited the Chronicle to talk about the first year. Edited excerpts follow.
Q: How’s it going? A: It’s going really well. In our first 12 months, we’ve opened four model homes. That was our goal. We’ve developed a really good staff that’s going to allow us to scale relatively quickly. The goal is develop a platform and a team that allows us to scale to 100, 200, 300 homes and ultimately to other Texas markets. Q: What have been the biggest challenges? A: It wasn’t the challenges we expected. We’ve gotten really good support from the development community. Lot positions haven’t been a major challenge. Getting a copy machine, and making sure our internet works. Back-office things we’ve had to get better at. Q: How is Hurricane Harvey affecting the market? A: I think the longterm effects, I don’t think any of us knows yet what it means. Q: You’ve made some trips to Toronto. How do the homes in Canada differ from the homes here? A: It’s interesting how similar the markets are as far as products, once you get inside the home. A price point here in Houston that may be a 70foot lot product in the suburbs may be a 38-foot lot product in Canada because lot prices are so high and access to land is so difficult. Their affordability equation is much different than here. Q: How big is Empire in Canada?
A: Really big. Right now, I believe they have 4,000 homes and condos in backlog. Because of their land prices and affordability, condos, much like the East Coast of the United States, are an option for not only single people, but families. They’ll close over 1,000 homes this year in Canada, and I think the number is going to be 1,500 next year. The sale-toclose cycle is much longer. If you’re buying a condominium, you contract for it and then the condominium is built. Someone could be under contract for three years before they move in. Even on the traditional single-family residential,
where our cycle might be six months, there it’s probably a little longer because of the process you go through to bring lots to market. Q: Is it hard to find lots in Houston?
A: There are challenges. The developers have done a good job in Houston of rightsizing their communities to meet our changing economic climate. With energy prices where they are, we’re not doing as many homes as we were doing when oil was $100 a barrel. I wouldn’t call it an overly constrained market, but there’s not a surplus, either. Q: How many homes will you build this year? A: We started about 50 homes this year, and we hope to start a little over twice that in 2018. Q: Tell me
about your homes.
A: We developed three very distinct production products. We have an entry-level product that’s designed to go on a 50-foot lot. We have a first move-up product that’s designed for a 60-foot lot. And we have a second move-up luxury product that’s designed for a 70-foot lot. That’s our core production programs. We build from about $200,000 to roughly $600,000 in those three programs. In addition, we’ve designed a specialty product that’s more of a lifestyle product. It’s designed for a 50-foot lot, but it’s designed for a lifestyle buyer who may be moving down from a larger home, possibly an empty nester. We also have a small intown custom program where we’ll do a build-on-your-lot for a buyer. Q: What are must-have features of today’s homes? A: We try to design flex rooms in most of our designs where it could be a second bedroom, a mother-inlaw suite because we have a very multigenerational population in Houston. It could be a study. So many people are working at home now. It could be a kids’ playroom. People are looking for that flexibility in planning. Storage is important. I think we are all Sam’s Club, Costco shoppers. Larger pantries and storage areas. Covered porches are in almost every home we design, and they all have options for outdoor kitchen spaces. Q: Are builders offering incentives now? A: They are. The building community always has. Buyers are conditioned to ask, and so there are always incentives out there. Our incentives at Empire are relatively small because we don’t want you to buy a home and then your neighbor says they got a much better deal. We try to offer incentives that allow you to take that flex space and customize it for your lifestyle. We try not to make the deal a big part of our sales process. We want you to fall in love with the home and feel like you selected the right builder. At the end of the day, homes are not a commodity. It’s a place you’re going to raise your family and come home after a hard day of work and relax.