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The Dallas Dirt podcast with Candy Evans takes you inside the real estate news stories you’ll find daily on CandysDirt.com and beyond, giving you more insight, juicier details, and the inside scoop from one of Dallas’ most well-connected real estate personalities.
Speaker: Hi, I'm Candy Evans
and this is Dallas Dirt.
Today I am going to be speaking
with none other than Philip
Huffines of H Huffines committees,
the President and CEO Co-owner.
Governor of Huffines Committee,
which is one of the largest
developers in North Texas.
And who has a.
Fascinating story of how he got
from fireworks, oil and gas to dirt.
We love anything to do with
dirt and the story behind it.
I am so grateful to have
you on the show today.
Thank you so much for coming.
We're just gonna talk about real
estate and how you do what you do and
you develop some amazing communities.
You are actually creating towns in Texas.
Speaker 3: Right.
Candy and.
But first off, thank you
for the opportunity to be
here and visiting with you.
It's always fun and I watch your show.
It's quite good.
Speaker: You started when you were
in college with your twin brother.
Speaker 3: We sure did.
it's a little bit old, but I do try
to introduce myself this way I get
around twice as often as you do.
Because I have an identical twin
brother, of course everyone says,
oh, I saw you at such and such during
college that was tough because we'd
walk on campus and the girls would
say, well, you sure are moody today.
I never met 'em.
So we kind of shy sometimes,
as an identical twin, we
have been best friends for.
Most of our lives.
Speaker: Amazing.
Speaker 3: Yeah.
Speaker: You all get along really well.
Speaker 3: Most of the
Speaker: time
Speaker 3: until we argue.
Speaker: Do your parents
have to settle the arguments
Speaker 3: oh, well, boys like to fight.
Yeah.
So we would definitely
wrestle and get in fights.
Okay.
But we always get along and have been
partners as you just mentioned, We were
in high school brother Don, he's the
one, with the ideas, you know, comes out.
He says, well, we need to go do this
or that, and some of 'em are too
grandiose, but I'm the one that does the.
Implementing
Speaker 2: Right.
Speaker 3: And he said,
let's go sell fireworks.
It was 1976 and a bicentennial
year, and he had an idea on
where we could put a stand.
We had to research all of that and we're
16, 17, and had to get a state license.
Mainly what got us into real estate was
we had to research all the jurisdictions
for fireworks where you could sell, where
you couldn't, and where it was legal.
Speaker: All were different.
Speaker 3: Each city was
a little different state
rules and regulations on it.
we did that for five years, through
college and high school we had
multiple locations and expanded the
business and so we learned land and
land entitlements and a young age
Speaker: Let's explain
what an entitlement is.
Speaker 3: Well, you know, the
buying land and what's it value
Speaker: what you can do with it.
Isn't that how you would describe it?
Speaker 3: entitlements really
refer to the local governments.
. And sometimes the state government
about what they allow or want to occur.
local governments, municipalities
or cities pass a lot of rules or
laws and regulations and what can be
built through zoning or subdivision.
Ordinances, street widths, drainage,
water, sewer, everything about how you
construct or get a permit to build a house
is regulated by the local government.
. Speaker: And those are the entitlements
that you When you buy the real estate,
you buy those entitlements, correct?
Speaker 3: Well,
it's not quite that simple.
If the previous owner went
through all of the processes.
But most of the time we
just buy a farm or a ranch.
Raw land, with no entitlements and
'cause one of our fortes or specialties
is to go to local governments
and get the property entitled.
That increases the value because
then someone say, okay, the
property's worth more now because
I know what I can do with it.
We call it de-risking the property
Speaker: de-risk.
The property and that
makes it more valuable.
Speaker 3: And it needs to
have access to water and sewer.
Speaker: 'cause otherwise you can't
know, you just can't bow on it basically
Speaker 3: it's, more risk.
Yeah, definitely.
Because the city can deny what
you want to do with the property.
Yes.
And devalue the property substantially.
Speaker: That's why some
developers actually go.
Work the entitlements and then
turn around and sell the property
because it's now worth more money.
Speaker 3: There's a step up in value
Speaker: I was fascinated by the
way, commercial real estate works.
you were doing these fireworks,
you had all these beautiful
communities that you went through.
Did you ever stop and think, oh, I
think we put a development here, a home
Speaker 3: development?
Oh, not that age.
Later after college.
Mm-hmm.
Don and I were in college together.
We got Texas monthly out, 400
richest Texans, and most of them
were real estate or oil and gas.
So he said he wanted to be in real estate.
he went to work for Henry S.
Miller in real estate, and I
worked for Gaty Oil Company
In Houston for several years.
Oil and gas went to
$10 a barrel, whatever.
So that was not, and it's very risky.
Oil and gas is much worse
than land development.
Yeah.
ups and downs came back to
Dallas and got into real estate.
Don was brokering land we'd always
been kind of attached to land.
Mm-hmm.
Just like you, the dirt, you know?
'cause that's really where
the underlying value is.
And most real estate is the land.
And also we like it because
you can be creative.
It's a vacant track.
a blank canvas.
Let's create something
really cool if we can.
My father was a rancher and had,
some land in Carrollton where he
would check the cows every day.
And he loved doing that.
He was also an automobile business,
so I need to mention that.
Yeah.
'cause your grandfather was
Speaker: in the auto business from 1924.
Speaker 3: We had our hundredth
anniversary this year and my brother
Ray runs all the dealerships for a
hundred years it's been in the family.
Speaker: That's amazing.
Speaker 3: That's true.
Speaker: Just amazing.
Speaker 3: They,
Speaker: then you go to the
ranch in Carrollton and,
Speaker 3: we saw the houses.
And the subdivisions.
Encroaching in that area.
I discussed with my father, let's
maximize the value on the property.
Unfortunately, most of
it was in the floodplain.
Speaker: you can't build on it
Speaker 3: can't build on it
if it's in the flood plain.
Right.
Got you.
Had to remove it from the floodplain.
So we, hired people long story
short, we did, we removed it from the
floodplain that took several years.
in 88, 89 there was a big recession
Real estate was wiped out.
Banks were wiped out.
My father was in banking.
He lost all the banks.
We lost the property.
It was used as collateral for other deals.
we learned at a young age how to
mitigate risk for macro environment.
Something that can come up
that you're not prepared for.
Speaker: Right, exactly.
And be, be prepared for the rainy day.
Speaker 3: Well, that was a big storm.
Speaker: I remember that,
Overnight.
Speaker 3: Overnight.
Overnight.
Yeah.
Within a few months.
And the reason for that in your
audience probably doesn't know this
land is very illiquid because it's
not producing any cash flow stream.
This building or retail centers
produce a cash flow stream.
And even if tenants move out, there's
still some cash flow, coming in.
And then there's a
replacement cost, right.
So you can value no matter how bad
it is, well I'm buying it 50 cents
on what it costs to build it, or I'm
buying it on this cash flow stream.
Well, land just sits there.
Speaker: Yeah.
you have to pay taxes on it.
So it's, you know, it's not free.
Speaker 3: There's a lot of risk
associated with buying land,
Speaker: with land, and then if you own
a lot of it and it's not worth anything.
Speaker 3: we try not to have much debt.
Speaker: That's a good thing.
Speaker 3: try to have
something free and clear.
Speaker: So it's not been a piece of
cake to get to where you are today.
I mean, you had your ups and downs.
Speaker 3: But the lesson I learned
when I was in my mid twenties when
everybody went broke, including us.
is be very careful on
personal guarantees on wounds.
When you per and most individuals,
when they get into business, you have
to personally guarantee the loan.
The bank wants you responsible for
whatever you're borrowing the money for.
But if that business goes
broke, they're coming after you.
the bank will come after the
individual personal guarantee,
before they go after the collateral.
Speaker: Wow.
Speaker 3: Right,
Speaker: Path of least resistance.
Yes, absolutely.
Speaker 3: Don't want the collateral,
they want you to pay the loan.
Speaker: I remember covering the stories
during the, REO crisis, banks do not
want to get homes back because then
they gotta hire a whole department.
Train 'em, sell, basically go
into the real estate business
and that's not their business.
their business is banking.
I understand that, and I try to
explain that to people ahead of time.
I totally get what you're saying.
The end of the eighties for Texas.
we had just come here and all of a
sudden it was like all my friends in
commercial real estate were just selling
their homes and, downsizing hugely.
Mm-hmm.
How did you keep going from that point?
Speaker 3: Well, I don't wanna
dwell too much on the negativity
about what happened in those days.
we would go to auctions.
when the banks failed, the government came
in, took over the banks, they would move
all the loans over to a bad bank or what
we call RTC, Resolution Trust Corporation.
their job was to.
Sell those assets.
Loans and foreclosed real estate.
the best thing the government did was
put a three year life on that entity.
So the real estate community was sitting
back, waiting for that three years
Speaker: to clear
Speaker 3: And then they
knew that's the bottom.
'cause like I say, like everybody.
Falling knife is difficult to catch.
Speaker: Right.
Speaker 3: Because you just don't
want, you wanna wait till it lands.
Yeah.
so they started having auctions
and selling off assets.
we found a few investors but
mainly we would go to the auction
or to a savings and loan and
contract for subdivision lots.
Okay, so these were
the 300 lots, 400 lots.
and It's sitting there, no home builders.
Nothing's happening.
they'd give you 60 day look, 30 day close.
in that 60 days we'd run all
over town and sell off pieces of
those subdivisions to builders.
And they would close simultaneous with us.
Speaker 2: Wow.
Speaker 3: So we would get some
of the lots free and clear.
we just started doing that and
building lots and got familiar
with how you construct them
and which engineering firms.
our first master plan
community was about 1998.
Speaker: Oh wow, that's amazing.
you guys learned so much in that
process that is valuable to you as
a company and you took those lessons
and baked it in, I think that's
part of what your success has been.
So what was this development?
1998?
Speaker 3: It was our first
MPC and it was a difficult one.
It was in the city of Rawad.
we built a golf course and it's still
there, It's called Waterview Golf Course.
We don't like building
things that are widgets.
We're not just down the street doing
the same thing everybody else doing.
So something unique.
So we built this golf course and
hired famous architects it was
called a public improvement district.
Where we could sell bonds.
The city was reluctant to do it, they
said, okay, Huffines, you take your idea.
This public improvement
district to the voters.
And if the voters approved that and
it was six and a half million dollar
bond sale, then yeah, we'll invest
it in the golf course with you.
Speaker 2: Wow.
Speaker 3: So we got the
voters to approve it.
Big campaign.
That's where we started getting
involved in politics and campaigning
but it's not an 18 hole golf course.
Speaker 2: Oh,
Speaker 3: you're supposed to ask Why?
Well, because it's 21 holes, so
that it's different and unique.
There's a three hole training
course attached to it.
A par three, par four, par five.
And so the kids, the high school
kids or individuals could come out.
Speaker: Was it your idea to
Speaker 3: yeah.
Speaker: So you made it 21, hosted to
be a little bit different and And then
you built the community around it.
Speaker 3: Correct.
Speaker: That's still there.
Yes.
Can we talk about that a little bit?
How do you decide what activities
you want in these communities?
Is it based on something that's
been successful previously?
Speaker 3: back in the two thousands Don
and I took our team and our individuals
across the country touring various master
plan communities, and I think I need to
explain what a master plan community is.
Speaker: I was gonna ask you
Speaker 3: master plan
community can be small or large.
Most of them are fairly large, with
at least a thousand homes, maybe 1500.
Our communities vary from.
1800 to 3000 or 4,000
different home sites.
And, but it's a cohesiveness.
You know, what is cohesive
about this community?
That's what master planning is about.
the streets are all planned.
The architecture deed restrictions, HOA.
Speaker: It has a flow to it,
Speaker 3: Correct,
Speaker: yes.
Speaker 3: And you can usually
tell when you're in one, from
the signage or the architecture,
Speaker: there's a gate or there's
an entrance and there's boundaries
Speaker 3: you can tell when you're in it.
that's what we like to construct
as a master plan community.
we need a certain size in order to
have a certain amount of amenities.
Right.
Because otherwise.
The dues would be too expensive, right.
To keep up with it.
Yeah.
And so we try to always purchase at
least 300 acres, and that would be
somewhere around three houses per acre.
that would be a thousand home sites.
that's usually the minimum
size that we try to do.
Yeah.
It depends.
You lose some from drainage,
flood, plain drain in the streets.
Speaker: Yeah,
Speaker 3: Those would be about
10,000 foot lots or 8,000.
Speaker: What are some of your peaks as
far as the communities you've done now?
Some of the,
Speaker 3: how we came up with it.
Yeah.
we're always on the lookout
with UULI, urban Land Institute
what is it that they're doing
in other parts of the country.
Florida's big on master plan
communities as you can imagine.
Speaker: That's where
Seaside and celebration
Speaker 3: And then Houston
has a lot of master plans.
Yes.
California has a lot.
They're mainly in the sunshine.
States Right.
Speaker: where there was land.
Yes.
You know, new England, everything
just kinda hodgepodged.
Speaker 3: Yeah.
one reason North Texas didn't
have, and still doesn't have a
lot of masterplan communities is
because there were so many suburbs.
Speaker 2: Right.
Speaker 3: So in Houston
there were not any suburbs.
It was just one city and then
they would set up these districts
and then they would, 'cause
Speaker: there's no zoning.
Speaker 3: And here
Speaker: had it own zoning.
Speaker 3: boundaries
run into another town.
So it's really one big city.
Speaker: Yeah.
Speaker 3: I think the 80
to a hundred different.
Municipalities in the metropolitan area.
Development instead of the developer
regulating its own development.
Speaker: So you had to go in
and just go by whatever their
entitlements or the plan, the
rules that they had put in place.
Right, right.
So you built your communities then
outside of the municipalities, correct?
Speaker 3: Both.
Speaker: Both.
Okay.
We,
Speaker 3: We built
both inside the county.
in the city.
Speaker: In the city.
When you build outside of the
community, do you find that you
can offer more affordable homes?
Yes.
And why is that?
Speaker 3: Well, the reason I
hesitate is I don't want to throw
the cities under the bus, right?
but cities, create cost to a
developer, and all costs, are
passed on to the end buyer, right?
That's the homeowner, the home buyer.
And so whatever the cost of developer
experiences, the home builder
experiences have to be baked into the
product and the product's, the house,
Speaker 2: right?
Speaker 3: So cities add, at least.
20,000 to $30,000 to the price of a home.
Impact, fees, all of the
things that they charge for.
Speaker: Right.
Even though we love our environment
and we wanna protect it, environmental
laws, Home Builders Association have
told me that can add almost 30%.
Speaker 3: Well, the two and I'm just
talking about is a developer cost.
You're just talking about the developer.
Right, right.
Because we build the horizontal and
I think the audience needs to know
that, yes, we don't build houses.
Speaker: You develop the land
for the the builders to come in.
Correct.
yes, yes.
And we looked and you're like the pallet.
You clear the pallet, they
come in and they do the Right.
Right.
Speaker 3: Build the
clubhouses, the amenities.
Yes.
Swimming pools or golf course or
whatever it may be that attracts the
builders and thus the home buyer.
Because if the home buyer doesn't
like what we do, then the.
Builders go away
Yeah, so we try to find
amenities that are popular.
Of course, pickle balls super popular.
Speaker: pools.
Speaker 3: Oh, giant swimming pools.
you were gonna ask about two of
our communities and I can talk to
Speaker: dying to get
Speaker 3: It's over the top.
Speaker: because we know that that's
what consumers want, they want
these activities and amenities and
it's almost getting to be, isn't it
like, sort of a popularity contest
Speaker 3: now you're right, candy.
you know, like Hillwood, you had
Fred on your show and all these
other, they go do something.
Ah.
Okay.
We can do that better.
But that's what makes capitalism so great.
You know, I can build a
better product, I can do this.
They're doing that.
Then he says, well, Huff Finds
is doing, I'm gonna do that.
Speaker: Gonna do better.
Right.
Like the whole idea about the farms kinda
like living on the farm and the nature.
Yeah.
And the harvest concept
Speaker 3: But we always have
to evaluate what is the cost.
Speaker: Yeah.
Speaker 3: And how much
are people gonna appreciate
Speaker: and appreci that.
Speaker 3: Yeah.
And so we would go monitor.
Certain activities, certain things
that other developers are putting in.
And what we learned is a lot of
it's just the sizzle, the marketing,
they really don't use it, but
it looks good or sounds good.
Speaker: It's a good marketing tool.
And you know, people
Speaker 3: want to think
they're going to use it.
90% of the people say,
oh, this is great fitness.
Speaker: January,
Speaker 3: 60% never show up.
Speaker: So tell me about
your star properties.
Speaker 3: we started a community that
I'm really proud of, but we don't own it.
We started, we bought
the land in oh 6, 0 7.
It's in Arlington.
It's called Veridian.
And it's huge.
It's like 2000 acres.
3000 home sites.
But we got caught in the recession.
And it took three years to get our
quote entitlements, the zoning, the
master land plan changed that long.
With Arlington and it's because
we put a lot of acronyms on it.
Okay.
You're supposed to ask what's the acronym?
Speaker: What is an acronym?
Speaker 3: it's everything from a
municipal utility, district of mud, A
pits Oh, the M turfs, the PIs, the tur.
Yeah.
And all of these triple P's we
call it, where you can offset
the cost of the infrastructure.
And offsite utilities and all
the problems with the property.
With government.
Participation.
Speaker: Participation.
That's what they're really all about.
I often have to Google all
these when I'm writing.
Like I know, what is this one?
What is this one?
What is this one?
Yeah.
So that's why No.
So you, um, I, that is a
beautiful community, by the way.
You have a lot of water
features there, don't you?
Yes.
Big lake.
Speaker 3: property
was in the flood plain.
And I had experience
over the years with that.
Speaker: You know, from the ranch.
Speaker 3: So we had to reclaim
the land, move 8 million yards of.
Dirt.
The edges on these inner city
properties Can usually be difficult.
Because they're old.
It's everything that was
easy to develop, developed.
And so this property
had strip joints nearby?
Oh yeah.
Oil and gas tanks and industrial area.
'cause it was two cities, Fort
Worth and Arlington's border.
It had a landfill next to it, so
we had to overcome a lot of that.
And I wanna brag on Viridian.
last year I was at a real estate
function and an individual came
up to me and said, Huff Fines.
I said, yeah.
He goes, do you know what the tax assessed
valuation of Viridian was in 2009 and 10?
Of course it was recession year.
I said, no, You take the existing value
and everything that goes up above that.
Some of that is rebated back to
pay for infrastructure in the city.
Of course, it's their taxes, right?
I said, no.
He said it's 8 million.
And he said, you know what?
It was last year.
I said, no.
He said 2.1
billion.
Speaker: Oh my God.
Speaker 3: So it's been very successful.
DFW Business Journal said it's
third, highest median, home price in.
DFW so very successful.
Very proud of it.
We sold it in 16 and this was
Speaker: a flood plane.
Speaker 3: It was, yeah.
So the city really benefit everybody.
Benefits.
And so we're proud of that.
But recently, I'm really proud of
one we're constructing right now.
Speaker: Okay.
Speaker 3: And it's called Salter Salt.
Yeah.
And then you, you may
Speaker: we know.
Speaker 3: Okay.
Speaker: Well, well, we can talk about
Speaker 3: I'm really proud, of
the ability to overcome a lot
of the negativity in the area.
And for the city to participate.
it's important for us to under
promise and over deliver so they
can call up the mayor and say,
Huffines did this deal with you guys.
we usually get glowing reviews.
Speaker: Oh yes, That's true.
So, what I mean, would
you call it the star now?
Speaker 3: next.
we've got quite a few years.
These MPCs can take.
10 to 15, 20 years.
Salt Tara is gonna be at least 10 or 15.
Savannah, finished up a few
years ago on Highway three 80.
That was 20 years.
And Providence was, we were focused on
that traditional neighborhood design.
with rear entry and smaller
homes with the board.
Speaker: You it's much more
durable than wood, actually.
Speaker 3: Everybody can
paint it the color they want.
And it looks like the
house that grew up in,
Speaker: that was your.
Community, if I remember with
sort of the southern field Yes.
The front porch, requirement and they had
Speaker 3: But that's what
makes our communities unique,
unique sidewalk widths.
You know, we were some of the
first to mandate five feet.
Cities still had four.
So we try to narrow down
the roads a lot of times.
Traffic slows down traffic calming.
And trees in the front yard we
try to shade all of the sidewalks.
Speaker: Oh, wonderful.
Speaker 3: We put trees in the parkway.
Speaker: Mm-hmm.
Speaker 3: We do require trees in
the front yard for the builders.
We have design guidelines and
architectural rules for the builders
Speaker: architectural rules or
Speaker 3: And I think most
individuals listening, having
homeowners association, right.
In the old days, back when the
houses were built in the sixties
and seventies, there weren't a lot.
But now everyone has a homeowners and
Speaker: It keeps the, level of quality
up and makes it more harmonious.
Speaker 3: Absolutely.
someone's putting in the
flowers and Maintaining it.
One thing an HOA does, especially,
when you're not in a city, is.
What I call value enhance.
Now cities call it code enforcement.
Speaker 2: Mm-hmm.
Speaker 3: Our value enhancers drive
the community and it's mainly landscape
violations and handing out certified
letters saying You gotta mow, you gotta
trim the tree and do all these things.
Speaker: Right.
Which makes you, definitely,
not have to be the policeman
and kind of takes the heat off.
So that's great.
So, Salter?
salt is over a
Speaker 3: we bought it
from the Lucas family.
Speaker: Family.
Speaker 3: Okay.
In Mesquite.
Mesquite.
And it's very close to 6 35.
Okay.
Easy access.
they've owned that land
for a hundred years.
Wow.
they finally found a developer
they trusted that could really
create a legacy for them.
the city of Mesquite trusted us.
we are in the second phase of development.
We've already built 750 home sites
and we're building another 600 now.
It's been very successful.
the amenities I gotta tell you about,
so I think, you know, we built it.
the property had trees and
there was one tree that I
found that is just spectacular.
It was a red oak and it was 52 inches
in diameter, 140, 50 years old.
I said, we gotta build a tree house here.
And so who knows how to build tree houses?
tree House Masters on history
Channel, I used to watch.
we called 'em up, they came out
and built this giant tree house.
In this red oak we trimmed it up
improved all the grounds underneath
cleaned it all up it's a beautiful
park, and the tree house is probably
the largest tree house in a community.
And so we had a.
It, it, it's, it's just spectacular.
And now when I say that, the clubhouse,
it, it's just now being finished and
the swimming pool is Unbelievable.
Spray park for the kids swim
up bar and an adult pool
Speaker: swim up bar.
Speaker 3: And then we've got
something, no one's seen yet.
It's a blob that's in
the middle of the pool.
the kids can climb up and slide down and,
do all kinds of activities on this blob.
Speaker: Oh, I've seen
those at Boot Ranch.
They're amazing.
Oh yeah, yeah.
Down in the hill country.
That's amazing.
But a swim up bar that is awesome.
Speaker 3: I think most people have
been to Cancun or M Mail and they all
have it, so I said we gotta do it.
we're also in the.
Multi-family business.
We built over 2000 apartments, so
we built a big swim up bar in the
apartment complex It's just fun.
to be creative.
Speaker: It's awesome.
We have so much to talk about and I don't
wanna miss, I do wanna talk to you about,
affordable housing because you guys are
in this business this is the topic du
jour of every municipality Everyone's
talking about affordable housing.
Our state is trying to implement
some laws to get affordable housing.
The cities are handing out, 75 years
of tax free, bonds or, tax credits,
to get more affordable housing.
What do you think about
what you're an experienced?
Developer, how do we
get affordable housing?
What makes it affordable?
What can we do to ensure
that it stays that way?
Speaker 3: Well, that's a really
tough question because, it's
been studied over and over by
various institutions and groups.
I think it's really twofold.
It's where's the cost?
Because it's supply and demand.
If there's a big supply, then
the cost or the price comes down.
If there's limited supply, then
the price goes up, and then there's
a cost factor where you, how can
you reduce the cost of the home?
And so there's individuals and
groups that look at, factory
built homes To lower the cost.
Everything you can imagine
on how the construction cost
of the home can come down.
From our standpoint in developing lots for
builders to purchase and build a house,
a lot of it's, as I mentioned earlier,
is in the cost that the city places on.
Not only the home builder,
but the lot developer, through
impact fees or other costs.
most individuals when they talk
about cost, forget the soft cost.
every home builder, every developer,
everything you see works on a profit.
And there's usually investors
associated with that time.
So when a city delays a permit or
delays the approval process whether
it's the streets water or sewer,
and it sits on some bureaucrat's
desk for a month or two, mm-hmm.
Most individuals require 15%
minimum required rate of return.
Well, that cost just was
passed on to the consumer.
Because there's no revenue generated
until all of that gets approved and
permitted in one month delay, the cost
just went up one and a half percent.
Wow.
On a $400,000.
House's.
$4,000 if the entire cost was there.
But it's staggered, you
know, the expenditures.
I think speeding up the process,
one stop permit certainly can help.
Speaker 2: Mm-hmm.
Speaker 3: And what the state is talking
about, what you just mentioned Is.
What occurred back in the 1930s
and twenties and forties was zoning
was approved by the Supreme Court.
Speaker: It limits
Speaker 3: the ability for certain
communities to have affordable housing.
Because the city councils are controlled
by people who have a, I dunno, pick
a number, $800,000 house and they
don't want any $400,000 houses.
so they control the city council,
and those are what we call, not in my
backyard, individual, their babies.
Speaker 2: Mm-hmm.
Speaker 3: the government, the
legislature in Texas and the city of
Dallas is trying to, pass ordinances
or laws that says, well, you don't
need zoning for single family.
You can build it wherever you want.
the lot size can be as small as the
developer wants, or the market wants
Speaker: it's
Speaker 3: Market driven, and it opens
up a lot of land for more housing.
More housing in more convenient locations.
Not apartments or can be apartments.
But what the cities are talking
about is detached housing.
And small lots or fourplexes, duplexes.
Speaker: The quads.
Speaker 3: And then that lowers the cost
so that it makes it more affordable.
Speaker: what is the bottom line of
what you can build a home for today?
Speaker 3: Wow.
That's a great question.
Production builders, new home builders.
Have a lot of economies of scale.
Speaker: Mm-hmm.
same carpet all the same time.
Oh, that's right.
a big bulk.
Speaker 3: And custom builders
can't, lots of cost associated this
room's this size is more studs.
There's more this, it's all unpredictable.
So we usually focus our sales
with production builders.
Because they know what they're doing.
They know what they can pay, and they
know what they can sell the house for.
And they're not out there guessing.
Speaker: Right.
Speaker 3: What the question,
Speaker: What do you think?
400.
300.
maybe a hundred
Speaker 3: dollars a foot,
Speaker: hundred dollars a foot
Speaker 3: And so, and that's a
Speaker: safe home that has.
Speaker 3: Because they have
warranties associated with them.
And that's the last thing a
home builder wants to deal with.
Speaker: Exactly.
Speaker 3: So if they have a
subcontractor who's not performing,
they can get rid of that quick.
'cause they don't wanna deal
with that warranty work.
So
Speaker: a hundred a foot,
Speaker 3: so that 2000 foot house Would
be 200,000 just for home construction.
Then you have to add landscaping.
You have to add permitting cost.
And then they have to buy the lot.
Speaker: But it's usually about
a quarter of the price of the
Speaker 3: one fourth of the
price they sell the home for.
a hundred thousand
Speaker: up to 400,000?
Speaker 3: 400 for a new
home for 2000 square feet.
Speaker: Four
Speaker 3: Now the average price of a new
home in Collin County is about five 50.
And what keeps driving that is demand.
Speaker: Mm-hmm.
Speaker 3: That governments
place on housing.
a household who makes
$150,000 household income
can really only afford about a 400, 4 50.
Speaker: Right.
That's it.
A house.
Speaker 3: There is a big transfer
of wealth that's occurring
most people don't talk about.
As my parents and older parents, die
off, you know, they leave some wealth.
it may be $10,000, it may be.
10 million.
But the inheritance allows the
individual to borrow less so the
mortgage is less so they can afford more,
So if we don't get control of
the affordability problem, we're
gonna end up like California.
Speaker 2: Yeah.
Speaker 3: a lot of the NIMBYs coming in.
Or bringing that to the city
councils, you know, where we're not
gonna allow anybody else to build.
And every home in California's
a million dollars.
And the only way you can buy that
is you're already in the game.
Speaker 2: Right?
Speaker 3: You're selling a
house, taking your equity and
profit and buying another house.
Speaker: Exactly.
Speaker 3: just not what we want in Texas.
the spirit and frontierism
in Texas Exactly.
Speaker: Well, I hate that we're gonna
have to stop, but we're gonna come
back and do this again 'cause you
have so much valuable information.
It's amazing.
Speaker 3: the growth of the
Dallas-Fort Worth area is phenomenal.
And this is important to know, everybody
says, how can you live so far out and
they're not far out from their job.
Right,
Speaker: right.
Speaker 3: the tollway has more
job there than downtown Dallas.
Speaker: Downtown Dallas.
You are.
Absolutely on spot.
Not only that, but we saw
during Covid that people
started working from home more.
That's right.
And that kept 'em off the roads.
I mean, they're not all
driving to downtown Dallas.
We have to get that out of our heads
'cause that's not what's happening.
I would love to check in with you
periodically with what's happening,
especially on this affordability issue.
'cause I'm a big.
Believer in home ownership.
I think that's the basis of
the greatness of our country.
I wanna see that continue
and I don't wanna take that
away from these young kids.
Speaker 3: Absolutely.
'Cause then they're
vested in the community.
Speaker: Exactly.
the proof is there that kids do
better in school when they're
in a single family home.
the community does better.
There's more voters.
I'm sure your brother knows this
when you run for council or for any
state, they don't even bother with
the apartments 'cause they don't vote.
Go to their homes, they vote, they care.
Speaker 3: transient.
Speaker: of course what I do is
that basically the foundation of
everything is the home and the dirt.
Thank you so much.
And will you please come back,
Speaker 3: I'll come back
anytime you invite me.
Speaker: Thank
Speaker 3: you.
Speaker: Thank you
Speaker 3: Thank you
Speaker: Thank you so much for.
Watching us and listening to us
today, and please bookmark us because
we will be back with Philip again.
Thank you.