Urban NW Homes focuses on sustainability

That January, the Bank of Clark County failed, prompting a credit freeze for many of its customers — including builders who had started developments and suddenly lacked the cash to finish work. In the months that followed, other banks failed and federal regulators forced the survivors to get tough on collecting overdue bills from home builders. Many builders shut down or were forced into bankruptcy.

But Johns had seen it coming. He had sold off his construction holdings in 2004, convinced that the market was out of whack. It was too easy for builders to take out loans and pop up cookie-cutter homes, too easy for borrowers with bad credit to qualify for a loan.

“The market was going crazy,” he says. “But we got out very early. We thought things were going to crash sooner, and spent a couple of years wondering.”

When prices plummeted, Johns saw opportunity. Even before the Federal Deposit Insurance Corp. started bundling and auctioning off foreclosed Bank of Clark County lots, he was on the phone with regulators.

“We offered cash to buy properties,” says Johns, who is the company’s sole owner but is backed by business partners. “The FDIC let us buy up bundles of foreclosed land.”

He also became familiar with local bankers involved in foreclosures, offering to buy permitted properties for about as much as he would have paid just to get permits in place. From 2009 through 2012, Urban NW Homes purchased more than 1,500 lots. Since then, it has built some 200 homes and developed about 200 to 250 homesites in residential communities from east county to Ridgefield, Johns said. Asking prices for those homes have ranged from less than $200,000 in Vancouver’s Walnut Grove area to more than $500,000 in Ridgefield.

Johns said he recently brought in three partners so he would have time to work on community development and design. “I think it’s fair to say I was the founder, but the company has completely outgrown me and needed more like-minded people,” he said.

Miami-based Lennar Homes, which did not have a Clark County presence before 2009, also gained a foothold in the region during this period. The company spent more than $243 million, through a subsidiary, to buy troubled construction loans across the Northwest, including in Clark County.

Lennar representatives did not respond to messages seeking comment for this story, but the company had received permits to build 140 local houses as of last year, and its website lists seven Clark County developments with properties for sale.

While those with deep pockets bought lots at a discount, many small builders quietly stopped operating.

“I went from $5 million net worth, like I jokingly say, to negative $10 million,” says builder Peter Glavin, who shut down his company TaylorMade Homes during the market crash.

He’s back in business with Glavin Homes, co-owned with his son, Niall. He says his son’s strong credit and a relationship forged over years working with M&T Bank helped him return. He’s also partnered with New Tradition Homes, which came out of the recession strong, by taking on projects for that company.

Market shifts

Building a home construction business today requires understanding the subtle ways the market has shifted, Johns says.

“Before the market crashed, everybody was building townhouses, there were plats filled with townhouses, and the city was pushing it,” he says. “The buyers were people with the worse credit. Today, those people aren’t on the market. People who have stronger credit and are qualified buyers do not want to share a wall. Thousands and thousands of lots designed for townhomes have had to be redrawn.”

Buyers are also being choosier about the neighborhood amenities they’re seeking, Johns says.

Many want walkable communities with access to outdoor spaces, shops and businesses — though land-use regulations don’t always allow this option for developers, he says. With the zoning rules already in place, however, Urban NW Homes has opted to build fewer houses in a number of developments, to include common areas buyers want.

At Urban Oaks, a new development just getting going off Northeast 152nd Avenue in Vancouver, Johns plans to include a community amphitheater where residents can gather to watch music or movies together, for example.

Buyers are also increasingly interested in “green” amenities, Johns says.

“They always ask about price first,” he says. “But our average house uses 50 percent less energy than a standard house, and that is a strong selling point.”

Glavin, who also focuses on green building practices, says the extra costs associated with environmentally friendly construction have dropped enough to make it affordable for more buyers.

As he reviews the market shifts that he’s weathered over the past five and a half years, Johns says he hopes he’s seeing a shift toward sustainability: construction companies that can sustain themselves for generations, just as he learned about real estate from his grandmother, just as Glavin is partnering with his own son; and houses that will likewise stand the test of time.

“We don’t want to build houses designed to last 30 years, if we can build them to last 200 years,” Johns says. “I grew up here. I like to drive around with my two boys and say, I built that. And more and more, builders are thinking like this. We want to build multi-generational communities.”