Green Seattle

Two factors, “Price” and “Lifestyle” are macro trends that have significant implications for housing, according to industry analyst Mike Luis. However, not all players in the field agree on the best ways to accommodate future home buyers, he acknowledged at a recent meeting of marketing professionals from architectural, engineering and construction firms.

With that premise, the Seattle Chapter of the Society for Marketing Professional Services invited four panelists with different perspectives to join moderator Michael Luis (who is also the manager of The Housing Partnership), in offering insights on residential trends.

Panelists included:

Kevin Capuzzi, director of land acquisition at D.R. Horton
Dan Lungren, vice president at D.R. Horton
Denny Onslow, executive VP and chief development officer at Harbor Properties
Kristen Scott AIA, principal at Weber + Thompson
To set the stage, Luis pronounced “You don’t solve an affordability problem with a lifestyle product,” then opened the discussion with a question about green building.

Storm water ponds at subdivisions are not always aesthetically pleasing, Luis suggested, adding, “How are environmental and marketing concerns balanced?” Architect Scott said the solution often depends on a project’s size. Also, she said, new materials are becoming more affordable and landscaping can help mitigate unsightly retention ponds.

Capuzzi said his company tries to make such set-asides a community amenity, which is achieved in part with buffers and landscaping. He acknowledged soil conditions in the Northwest are such that things like retention ponds are not always ideally situated from a marketing standpoint.

Luis also asked the panelists to comment on “Green Building” as marketable features.

Using the Alcyone Apartments on South Lake Union as an example, Onslow said their research indicated only about five percent of the renters were aware it was a LEED (Leadership in Energy and Environmental Design) certified building, but once they understood it, “they embraced it as a source of pride.” Asked if that meant the renters would pay more, Onslow said no, but added he believes that will change.

Scott said the growth of green building is a big design driver, noting the Weber + Thompson architectural firm has experienced a spike in inquiries in recent years. The firm is even embracing green building principles for its new four-story, 40,000-square-foot headquarters building that is slated for completion next year. Located in the South Lake Union area, the environmentally friendly building will feature “passive cooling,” distinguished by no air conditioning, instead using windows that open, special adjustable blinds and high performance glass shades. It anticipates energy savings of 30 percent and is seeking to earn LEED Gold Certification for the building from the U.S. Green Building Council.

Lungren said that while there is a growing trend for sustainable building, buyers in general aren’t demanding it. “It’s an ongoing education process,” he believes. Nevertheless, D.R. Horton is striving to “build green” without adding to a home’s cost. He cited Issaquah Highlands as a good example of a joint commitment to environmental stewardship by more than a dozen home builders. At that planned community every home is designed and constructed to Built Greenâ„¢ rating standards.

Built Green is well accepted among luxury condo buyers, according to Onslow. A recent survey revealed about 45 percent of that segment is aware of Built Green and three-fourths of the buyers were willing to invest in environmentally friendly building by paying a premium on the price.

Buyers of Built Green products will get a payback of their investment over the dwelling’s life cycle, Scott emphasized, noting the U.S. Green Building Council documents numerous benefits, whether measured by cost savings, enhanced productivity or healthier work and living environments.

Moving the discussion from green building to land, Luis said GMA (Growth Management Act) “completely changed the way the land works.”

Onslow agreed, saying he’s observed a 100 percent increase over four years for land in the urban areas. “A lot of land is underutilized,” he remarked, a situation he says is often tied to ownership issues.

For D.R. Horton, overcoming high land costs has meant casting a wider net. Until recently, most of that company’s home building in Washington state was concentrated in King and Snohomish counties. Now, it has projects in Pierce, Thurston and Whatcom counties and plans to add Clark and Lewis counties as well as areas in Eastern Washington.

With land prices skyrocketing, maximizing densities is critical, according to Capuzzi.

Scott agreed, using Crofton Issaquah II as an example of how buyers are becoming more accepting of new ways to use scarce land. Developed by The Dwelling Company, that project of 107 homes is described as a “self-contained urban village.” Seven home styles are offered, ranging from 1,054 to 2,085 square feet.

Scott said parking garages may be 150 feet from the bungalows, carriage houses, town houses, row houses and cottages. “It took a while to catch on,” she recalls, but says people now see positive tradeoffs of shared green spaces that promote community connectivity. She believes appraisers need to change methodologies so evaluations are not based solely on square footage.

Citing work by a Harvard economist, Luis said buyers pay for location rather than extra land. In response, Onslow agreed, saying proximity to services and the character of a neighborhood can be important drivers.

Turning next to what he called “the legendary baby boomer,” Luis asked the panelists “if we have figured out what they want.”

Scott said condo designers must always be mindful to two segments, empty-nesters and singles looking for security. Offering upgrades is important, along with flexibility, such as designing rooms that can be used for multiple purposes as needs and seasons change.

“Not all boomers are empty nesters,” cautioned Capuzzi. For example, he stated, some have boomerang kids (who move back home) and some choose to locate in areas where their kids and grandkids will want to visit.

Capuzzi also said as prices rise, opportunities change. “What didn’t work a few years ago now does.” As an example, he said D.R. Horton recently released 15 triplexes it built at Horizon Pointe in Thurston County and all sold over one weekend.

“Master down” plans, with the master suite on the main level, are another way builders are appealing to aging boomers while still building a two-story product.

Panelists were also asked to discuss mixed use buildings and whether they are planned for aesthetic or economic reasons.

It depends, Onslow replied. In an urban setting, anything that adds to the energy is an ultimate goal, but cautioned, “With joint uses come challenges.”

Scott agreed, emphasizing there needs to be a clear demarcation of residential and non-residential spaces in mixed use buildings. Even psychological boundaries that help create transitions from commercial spaces to the sanctuary of a home can be effective, she believes.

During Q&A, audience members asked about overbuilding condominiums and making downtown Seattle more appealing for families with school age children.

Onslow thinks there is little risk of overbuilding in the short term. Scott acknowledged that while there is an upper limit, their firm’s research indicates “we’re in for a 10-year run.”

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