Ep. 14 What It Really Takes to Build a Home with Riley Gibbs

n this episode of Housing Matters: The Housing Trust Podcast, host Roman Tiger Abeyta sits down with Riley Gibbs, Vice President of Arete Homes, to talk about what really goes into building homes in today’s market.

From construction costs and labor challenges to design trends, fire-resistant building materials, and even the future of 3D printed homes, Riley shares an inside look at the realities of homebuilding in Santa Fe and beyond. The conversation also explores the importance of affordable housing, thoughtful community design, and why partnerships like Arroyo Oeste Phase II matter for the future of New Mexico housing.

Whether you’re interested in real estate, architecture, affordable housing, or the future of construction, this episode offers a thoughtful and behind-the-scenes perspective on what it takes to create homes and communities that last. 

To learn more about The Housing Trust: 

https://www.housingtrustonline.org/

Follow us: 

@santafehousingtrust on Instagram & Facebook

Transcript

SPEAKER_00 0:00

This is Housing Matters, the Housing Trust podcast, where we share stories and insights about affordable housing and making homeownership a reality. I am your host, Roman Tiger Abeta. Welcome to another episode of Housing Matters. In this episode, we'll talk with Riley Gibbs. Riley works with Arete Homes. So, Riley, uh, tell us a little about your role with Arete Homes.

SPEAKER_01 0:26

Hi, yeah. So I'm Riley Gibbs. I grew up here in Santa Fe. And so, in a lot of ways, it feels like a full circle moment kind of being back. Um, after high school, I went to school in Colorado and then spent about nine years at Goldman Sachs. And um, the first half was in New York on the mortgage trading desk, structuring and trading CMOs, which are kind of these complex securities backed by pools of mortgages.

SPEAKER_00 0:48

And then Okay, hang on, hang on. Goldman Sachs? Yeah, that's pretty big, isn't it? Yeah. What so what did you do in college to get to Goldman Sachs?

SPEAKER_01 0:56

Well, I studied surprisingly, actually, when I was uh at Colorado, they did what was called um everyone's I studied business and everyone did what was called a focus. And my focus was supply chain management. And so Goldman recruited heavily out of Colorado for its Utah office. Oh, okay. But as kind of while we're here today, I had a lot of background in residential and commercial real estate. And so I got hired into their real estate group originally, which was in Dallas, but I only was in Dallas for about nine months and then moved up to New York to the mortgage trading desk and started working on what's called CMOs, Cloud Eyes Mortgage Obligations. And so that was my first half of my career at Goldman was there. And then the second half was uh I was based out of Austin. Our office was in Dallas, and there I was helping manage our real estate portfolios. And so that's kind of my connection to real estate. And then I left because um I after almost 10 years there, I was kind of, I mean, to be honest, a little bit burnt out. So then came back to Santa Fe and I officially joined Rate Homes in September of 2023. I'm our vice president and just kind of cover a multitude of things from obviously my background is in finance. So I do our financial modeling and some of our accounting, our bidding, our contracting. And then the most fun thing for me is now I get to also be involved in the creative side. So I get to help out with our architects, our interior designers, our um, and so that that to me is kind of this thing I was always missing in my prior career is this creative side. And so now I'm lucky to have that again.

SPEAKER_00 2:30

Okay, but there's a connection with the Ray Tay Homes, right? It's not like you put in a resume and went through an interview process. So tell us about the creative. Exactly.

SPEAKER_01 2:38

So um my father is a founder of Arate Homes, Rob Gibbs, and he's been building in Santa Fe since I think we moved here in '95. Um, and so he's been building in Santa Fe since then. It was originally under BT Homes and then with Homewise and then Arata Homes. And so my dad's built over 1,500 homes here in Santa Fe, um, especially in this area where we're sitting right now in Tierra Content, and where we guys, where we have a project with you guys. Um and so I actually what's interesting is I actually come from three generations of home builders. My grandfather was a builder too, and wow. Um, my dad and my grandfather had uh what was called the Gibbs Company in California and we're builders there for a long time. Where in California? In Southern California, Orange County specifically. Wow, yeah.

SPEAKER_00 3:27

I always just thought Rob was born and raised here because we've always gotten along really good and I've known him forever.

SPEAKER_01 3:33

So I was like it's a secret that he's a truly a Californian. Wow. Yeah, like like a lot of us here. And so I was born there and then moved here when um I was five and my brother was three.

SPEAKER_00 3:43

So you you pretty much are are from here. I'm from here. This is where where'd you go to school when you're five?

SPEAKER_01 3:50

Uh I went to the Waldorf School, actually, which is um unfortunately closed a couple years ago, but now is reopened as a new charter school. So I was at the Waldorf School for uh for a while and then um I went to high school at Prep.

SPEAKER_00 4:02

Oh, you went to Santa Fe Prep? Yeah, I did. There's a connection there. My sons went to Santa Fe Prep. Yeah, I I have five uh five sons. The two youngest went to Santa Fe Prep. They both graduated. Uh one fin just finished his master's in London in film, and the other is wrapping up his bachelor's at Occidental. Oh no way. Prep was a good prep was a good experience for them. And I have a grandson now who's going to prep next year because after seeing what their his uncles, their experience at prep and kind of how it prepared them for college, I insisted with his dad that you need to send him to prep and I'll help. And so he's going to prep. So that that's cool. I didn't know you went to San Prep.

SPEAKER_01 4:43

Yeah, I did. So I was very lucky to go there. And and I agree, it's it it did such a good job kind of prepping us for yeah, the future. And and I actually would say my junior and senior year there were more challenging than my freshman year of college. So that seems to be, yeah, that's what I think.

SPEAKER_00 5:00

Yeah. So getting back to to construction and um for listeners who may not be familiar, what goes into building a home from start to finish?

SPEAKER_01 5:10

I think there's a lot of steps that go into to kind of building a house. And I think what's interesting is a lot of people see the the kind of the tangible piece that you see of a building. So it's the slab that goes into the ground, the sticks that go into the you just see the house. It's the exciting part. And I think I think what's surprising about that is that's actually probably the fastest part of the entire process. Is the actual putting up the walls putting up the walls and putting on the roof and installing the windows and that sort of stuff. I mean, it still takes us months and months to do that, but overall, this whole process of building a new community is as you've experienced as we've worked through Arroyo Este, is it takes years of preparation to basically work with the cities to come up with a plan that that they accept to work with the engineers to design it, to even even just starting with a raw piece of land and to take a look at it and understand like how can this become a community of 20 homes or 40 homes? And and that takes so much coordination. And so I think we typically kind of like to break it into sort of these five different stages. It's this vision, finances, design, preparation, build. And so to start with kind of this vision is that's looking at this piece of land and trying to envision how it could become homes go on there. Yeah, can homes go on there? How how can we maximize the space, but also make it still feel like it's not just a mass graded um kind of changing of the landscaping? It's it's something that's rooted in place and connected still. Because we're lucky to grow up and live in a place like Santa Fe that's just beautiful landscape-wise.

SPEAKER_00 6:43

And that's actually easy or would seem to be easy to do on a flat piece of property, but it's not all property is is flat.

SPEAKER_01 6:51

No, and as we know from Arroyo Este, I mean, we're we're basically built out kind of on little peaks above a giant arroyo. So it's it's it's challenging. We have to either take out a lot of dirt, move in a lot of dirt. It's it's really unique in that sense. And then I think from there, after you have that vision, then you that's when you work with the design teams of the engineer. How how many homes can you fit on there? Does it make sense? Can you fit roads? Can you meet all the city requirements? And simultaneously, then you're doing all the finances. Does it actually make sense to build it? Because you're having to then project costs multiple years in advance, right? So before you do the horizontal construction, which is the streets, the roads, the utilities, it's at least two years away from when you're first looking at the land. And then the vertical construction is even further beyond that, too. So there's so much preparation that goes into the early stages that that's takes could take anywhere from two to five years for us to get all the preparation done before we even have that first slab on the ground.

SPEAKER_00 7:46

So when you're driving around town or and you see homes being built, that was somebody's vision four or five years ago. Exactly. Just six months ago, right? You didn't see houses there.

SPEAKER_01 7:58

Right. Exactly. So yeah, again, like because not only do you have to plan the community, then you also have to work with the architect to plan the house. And then you have to bid the house, you have to work with your subcontractors and vendors to come up with a plan and the costs of because you can't then just go in blind and and build something and not knowing what it's going to cost you. Otherwise, wouldn't make sense.

SPEAKER_00 8:20

And construction costs have been a big topic in housing. Uh I mean, it's always a big topic, but it seems like more recently. So, what would you say are some of the biggest factors that influence the cost of building a home today?

SPEAKER_01 8:33

It's a great question. And I think I really like to look at this one from two lenses, both in a macro sense and a micro sense, because I think being here in Santa Fe is a unique area. But so at a macro level, we live through the pandemic supply chain disruptions. And unfortunately, when construction costs go up, they they don't really come back down in the same way. As we know, they have this real stickiness to them. And then just kind of more recently in the last couple of years, of course, there's kind of the tariffs and geopolitical uncertainties that are pushing costs higher. So anything that's coming from overseas, whether it's small components and appliances, appliances altogether, precious metals, lumber, all that stuff is is the costs continue to go up. And then another one we we see and have seen a lot recently is just concrete has gotten really expensive. And one of kind of the surprising facts is from a residential perspective, residential construction actually only accounts for about a quarter of all concrete use in the nation that most concrete is going into infrastructure projects and commercial projects or things like data centers today, that kind of stuff.

SPEAKER_00 9:32

So and so you're paying that same cost though.

SPEAKER_01 9:36

We're yeah, and we also have no bargaining power because we're only representing 25% of the entire market. And we're a small builder here in Santa Fe, so we have zero bargaining power. That's interesting. I didn't realize that. Yeah, so that that's kind of one of the things that's that complicates stuff, especially from a single family residential perspective.

SPEAKER_00 9:53

But I think let me stop you there because something that you said triggered precious metals. What precious metals go into a house?

SPEAKER_01 10:00

Yeah, great, great question. So I I think one of the big ones would be copper that goes into all the wiring for the electrical use of homes. So I so one thing we tend to do now a lot because copper fluctuates so much, especially with kind of geopolitical things that are going on. It we pre-order as soon as we know, as soon as we have a permit for a house, we'll pre-order the wire with our electrician to just lock in our prices today. Okay. Um, so there's things we try to do to mitigate some of it. And there are some builders that could maybe the bigger builders will use things like commodities futures to offset some of those costs and things like that. But we're we're too small.

SPEAKER_00 10:40

Okay, I'm not even gonna get into commodities futures on this episode. Not maybe that's the next episode.

SPEAKER_01 10:46

That's the next one. But I would say at a micro level, Santa Fe kind of has its unique pressures. We're of course a relatively small city in the sense of the the nation, and we're a smaller city than Albuquerque or Rio Rancho or Bernalillo, et cetera. And so labor availability is a real constraint here. I think so. That's another stress another stress, especially for kind of highly skilled trades. Um, it's just it's hard to find really quality subcontractors um that can also keep up with a multitude of kind of the production side of the project. So RT homes is we're a little unique in that we we do both production homes and we do kind of semi-custom and custom homes. And so we have we have different groups that work on different projects. And Santa Fe is pretty heavy in the custom home building market, so there tend to be more custom trades here, but they just they run very small, lean crews and are very expensive. And so it just it just kind of adds to the cost and complications of building in Santa Fe.

SPEAKER_00 11:43

And so time too, right? Because they'll be busy with other jobs and they try to fit you in or you fit them in.

SPEAKER_01 11:49

Right, right, exactly. So really trying to figure out the proper cadence of building, especially on the production side, is is a challenge here in Santa Fe. It it the build times can can take longer. And also, I mean, unfortunately, this winter has not not been an issue. Um but but there's weather. But there's weather constraints. There's all kinds of different things. So so it's it's a it's a complicated place to build for sure.

SPEAKER_00 12:13

So talking about the the home itself, the the end product that we all see and know more about, you know, for the layman, uh what's one thing that you you've noticed, or maybe there's more than one thing that homeowners ask for that's actually really difficult or expensive to build?

SPEAKER_01 12:29

Yeah, you know, that's a great question. I think it's not probably like one specific thing. I think it's more probably the sense that during well, it's little changes to the plants. So it's it's can I move this wall a couple feet or can I remove this wall? Can can I shift a window? Can I push the home back a couple feet on the lot? That sort of stuff just it creates so it can have a cascading effect. So for example, yeah if if if uh someone wants to remove a wall, is that wall load-bearing? Do we need to redesign the trusses above? Um, is now do we have to reinforce the slab somewhere else because there's gonna be a greater load on a different wall?

SPEAKER_00 13:09

Okay.

SPEAKER_01 13:09

Um, or if you're pushing the house back even just two feet on the lot, that that requires me to go back to my engineer to do a whole new site plan, a whole new grade and drainage plan.

SPEAKER_00 13:19

So it so just so you basically you you spent three to five years getting to that point, and they're wanting a change that you there's a reason for everything, I guess is what I'm trying to say. And so when you want a change, it's yeah, yeah.

SPEAKER_01 13:34

Exactly. And and of course, we want to always try to accommodate it's a home is is someone's special place, right? And so we always want to try to accommodate sure if we can, but those are kind of the complications that that come in. And funny enough, just like a really random, I guess, for Santa Fe one. The other one that we we see a lot is people tend to ask for wood floors here, and we find that wood floors are just very expensive in Santa Fe.

SPEAKER_00 13:59

It's cheaper than tile actual wood floor and not the stuff.

SPEAKER_01 14:03

Even wood floor, wood vinyl, a vinyl anything like that is can be more expensive. It's just there's not a lot of trades that that install them here, or okay. It's there's a lot more tile installers here in Santa Fe, or of course, carpet is is of course cheaper, but it that's kind of an interesting conundrum that we are challenged with, and maybe it's a little bit more is it a Santa Fe thing? I don't know if it's a Santa Fe thing, or is it just a trend that's happening?

SPEAKER_00 14:27

Um well, I don't know about a trend because let's say Because I remember the Satillo tile trend back in the day, like in the 90s, everybody had to have sateo tile in the exactly.

SPEAKER_01 14:36

I know, for example, when I was living in Austin, pretty much every house I lived in had some form of wood floor, not necessarily traditional wood floors, but whether it was real wood or or some sort of fake wood. It I think it just sort of depends on your market. It's really interesting that tiles just seems to be much more popular here. Um that's kind of that's that's an interesting one that we get lots of questions on. And I don't know, maybe maybe it's also just an RT thing. Maybe we haven't found the right the right group to to help us with that either.

SPEAKER_00 15:03

So yeah, because it seems like, yeah, that's you go into like the like the Home Depots and the Lowe's, or you watch the advertisement every you're right, you see nothing but advertising for that type of floor. You see tile floor advertisements.

SPEAKER_01 15:15

Exactly. Yeah, I think wood is is become super popular just for the look and kind of the feel and the softness of it is is nice to have in a house. Um, so I I would love to be able to find a way to get it into more of our homes for sure.

SPEAKER_00 15:28

And so is there anything that uh people may assume is expensive, but actually isn't?

SPEAKER_01 15:35

I think one of the things that I really kind of strive for in our designs and when talking to clients, I think something that's pretty easy is lighting. If you can do the lighting correct, it's gonna give a really unique feel to the house. Um and lighting is pretty easy to adjust and change, especially after the fact. We can always add in lights here and there. Oh, I did that during construction at least. We can run, we can run what additional wiring, all that kind of stuff. But just being able to have kind of uniqueness to lighting, whether it's under cabinet lighting in the kitchens, or if you have floating vanities in the bathroom, or little cove lightings underneath uh a bar top, that sort of thing, it just creates this extra little glow within the house. Okay. Like that gives it this other kind of new feel. And then kind of speaking on that also, I think another big one, especially here in New Mexico where we have over 300 days of sunlight, is our skylights, especially one of my favorite things to put in houses. And and I know this is a bit of a a point of contention with my father and I of I love wall wash skylights and trying to get as many wall wash sky wash skylights. So essentially what we do for a wall wash skylight is we align the skylight with a wall. So basically that the light is then kind of as it comes through the skylight, it's reflecting down the wall and really kind of creating this unique sense that that then changes throughout the day depending on whether it's morning or evening light. And what that does, it just creates this kind of it makes the wall look like it's extending into the sky. So it just sort of adds this depth to the house. And so it's a really kind of a unique way. We we tend to add them in a lot of bathrooms, and so then it gets it's another way to get natural light into the bathroom that creates this sense of the bathroom feeling larger while also protecting the privacy because the bathrooms are usually small anyways, so to make it feel bigger. But I I would say that's probably more a little bit of a medium cost range versus the lighting, is is something that's generally on the more affordable side that can easily kind of change the feel of a house.

SPEAKER_00 17:30

So so are there other design trends or features that you think will become the standard in the next say five to ten years?

SPEAKER_01 17:39

I think, well, on the design side, I think what we're starting to see a lot is so there's kind of this change in the design of homes where a lot of homes over the last 10, 20 years were designed more for this open concept of you have these big open spaces of combined living, dining, kitchens, all this massive space. Um, which and I think we're starting to move away from that as people kind of want some more back to kind of these consolidated spaces where you can have a little bit of separation. It just feels more cozy and maybe a little bit more kind of this sense of like the living room walled off from the living room walled off and kitchen. Exactly. And maybe there's still some sort of connection between some of them, but it's not just one giant open square or rectangle room, which is unique. As and I think that's kind of it's cool here in Santa Fe because we have so many old homes, especially downtown, that it it's kind of and so many of those old homes probably started as a small one bedroom and then added on a bedroom and another bedroom, another bedroom.

SPEAKER_00 18:36

Yeah, my grandfather's homes didn't even have hallways, they were just squares. Like you said, they just add a room, out of room, out of it. It wasn't a traditional, like, yeah, home with hallways. Right, exactly.

SPEAKER_01 18:46

So it's it's creating these unique spaces within the home that can that you can make each space very unique in in a way that that works well for you and your family. So I think you're kind of starting to see some of that. And then on the design side, of course, it's always changing quickly. And so I think right now we we went from kind of this lighter color schemes over the last probably five years of a of a lot of soft grays and taupes and and tans and browns and all these kinds of things. And now we're kind of moving more back into these richer, darker colors. So we're doing a we're seeing a lot more deeper reds and blues and greens and things like that in in a lot of our design choices. And so that's kind of on the on the design level, but uh but I think the bigger things to kind of keep in mind that we're seeing over the next five, 10 years, I think is more actually probably about like survival and community. It's that we are seeing what's happening with the intense hurricane seasons, the powerful winter storms, the fires in California in the west and southwest. It's all environmental stuff. So I think here in the Southwest specifically and the west, you'll really start to see more probably fire-resistant construction. And and what the fires in California were exactly horrible. So, and uh for how dry of winter we're having across the southwest and west right now. Yeah, exactly. It's just I'm it I'm already nervous about the fire season in springtime here in New Mexico. So I think moving away from this traditional kind of stick built out of wood, it's maybe we we go back to more of a steel frame or using things like there's a insulation company called Rockwell that makes insulation out of lava rock and it has a much higher fire resistance than normal insulation or things like metal roofs or CMU block.

SPEAKER_00 20:32

How much more expensive is that though, or is it that's or do you or do you save money in the long run with less energy costs or lower homeowners insurance rates because of fire?

SPEAKER_01 20:43

Yeah, that I mean that's that's probably the million dollar question right there. Is unfortunately a lot of these things are still more expensive. And so it's to put it in kind of a production or middle range home, it's still really challenging. And I think that's what we hope to see a big shift in over the next five to ten years is the cost of that stuff coming down. But I I do think, and also it one of the main things is working with insurance companies to try to come up with some sort of maybe it's a certificate of your home is built in more of a fire resistant capacity. It's you took all these steps to to to frame out of steel, to put in a rock wool insulation, to maybe even put in a fire suppression system, all these things. So it really helps people lower their homeowner premiums. Because that's something we're gonna have an issue with here in Santa Fe and RDR. And then you are starting to see a little bit of steel framing um kind of coming back into it. It's still a little bit more expensive than than traditional wood framing, but it it is actually starting to the cost is starting to become a little bit um more equal. And a lot a lot of it is because the steel framing is kind of more prefab. So they'll they'll prefab a lot of walls off site and then ship it in. And so they have they have more control over where they're building it. So they it's built in a factory, so they're they're not held by weather delays. Their crew show. Up um and build in the same environment every single day. That's maybe it's not a true like modular. It's more of just your walls are being delivered more complete than they are just a pile of lumber. And so I think that is maybe an area where you could start to see some cost savings.

SPEAKER_00 22:16

Um but is there then less chance for changes during the construction? Exactly.

SPEAKER_01 22:21

A lot less changes. Yeah, once once the walls are delivered, then they're there.

SPEAKER_00 22:26

So but that's something you obviously should communicate up front with the exactly the buyer that look, there's this is it. So take a good look at the floor plan. And sometimes that's hard to visualize just on a piece of paper. Then but you also you'll have model homes, right? In a lot of your developments, which you can go look at.

SPEAKER_01 22:43

Yeah, exactly. We try to because because yeah, it is really difficult to take a design from a piece of paper and look at it and try to visually try to visualize it as something that you can stand in and live in. And so, yeah, we try to do model homes, we try to help people understand that. But yeah, it would be a concern of that, yeah, there's no changes if you're framing out of steel. Otherwise, there could be, but the delays would be much more significant. Um and then I think another really interesting thing, um, and I'll maybe kind of leave this as a little bit of a tease because it's we're just kind of really in the early stages of it, but is um 3D printing of homes. There are some done up in Colorado recently that were qualified under the most kind of the highest level of fire resistance possible.

SPEAKER_00 23:27

Okay, hang on. I think of a 3D printer of something that fits in this office here that you could build a nice little, you could build a model for like a kid's school project home, but you're talking about an actual home that is 3D printed.

SPEAKER_01 23:40

An actual home that is 3D printed. So really one of the big companies is called icon out of Austin. Um, and they have a a huge project out there. They're they're printing it's at least a few hundred homes. And so essentially they have basically what looks like this giant kind of robotic arm that sits over the home and it it wow it pour it it's basically a modified concrete that is being quote unquote printed. It's so it's acting like a printer as it's pouring. It's acting like a printer as it's pouring. And so it's it these homes are considered what are called like mace masonry homes because it's it's a concrete faster and is it so it's dependent on the technology you're using, but yeah, it can be fast. I know the the homes they did up in Colorado, they were able to the the walls they finished printing within 16 days, which is pretty quick. That's about equal to framing a house, depending on the size. So they're they're getting faster and faster. And so on this 3D printing, I'm I'm working with one of our business partners, Roger Bose at Studio Bose. He's also one of our architects. And we really are excited about the 3D printing idea because it we feel in New Mexico it has a special connection to original Adobe because it's kind of this modern interpretation of Adobe. Sure. It's yeah, and so we we feel like this could be a perfect place for it to thrive, but we're really kind of in the early stages of of talking to kind of some some other principals that that have a lot more knowledge than we do and seeing how we can incorporate it here in uh in the Santa Fe market.

SPEAKER_00 25:10

Okay, here's the here's the billion dollar question though. Would the city of Santa Fe or the county the permitting allow for it or the code, or would they be or does it do they not get into that kind of detail? But that would be my concern is someone at the city tells you you can't use that to build those walls.

SPEAKER_01 25:27

Yeah, I I think that's a great question. And I think it's probably a conversation we need to start having with the municipalities here.

SPEAKER_00 25:34

Um because at the end of the day, you would think as long as it passes inspection.

SPEAKER_01 25:37

Yeah, I mean, essentially it's just a concrete wall. So it it should, um, as long as you're following all the other building codes and and I mean, you're printing your exterior walls out of basically a reinforced modified concrete, and so it's a extremely stable and secure structure. Right. Um, and is also much more fire resistant too, because it's concrete, not wood.

SPEAKER_00 25:58

And so is it cheaper than wood because you're doing with concrete?

SPEAKER_01 26:01

That's the one issue, is it's gonna be more expensive because it is a concrete, and so concrete is just more expensive in general.

SPEAKER_00 26:08

But but could you save time on labor and I mean money on on time and labor?

SPEAKER_01 26:12

Exactly, because the the machine's doing the printing, not a crew doing the framing. So so and also if you have the right type of project, the machine's just rolling from one house to the next.

SPEAKER_00 26:22

And so So maybe the housing trust and a Ray Day Homes, our next project, we're gonna bring one of those to Santa Fe.

SPEAKER_01 26:28

I think that would be the dream. Absolutely. That would be the dream. So we'll so we'll yeah, we'll have to continue talking about it. And maybe Raj and I can come back at some point and we can share some more.

SPEAKER_00 26:37

That that we we should, that's probably a whole whole other episode. Yeah, but is there, Riley, are there like do trends start somewhere like on the east coast or west coast, and then you kind of and then it like moves throughout the rest of the or like where's the is there a trend setter or an area that starts and then it kind of works its way throughout the rest of the country, or even there's a trend in the world and it comes here. I mean, is there in the construction field?

SPEAKER_01 27:04

Yeah, that's such a good question. I think well, I know I'll I'll speak about this in two sense. I know for me, I think a lot of trends and a lot of kind of color schemes and stuff, and just beautiful design for for me comes out of Europe. You kind of see these changes. Um, I know, like for with new homes in Europe or it's new homes or remodels or different kinds of things, just um the way they're remodeling and Europe. Yeah, exactly. The way they're remodeling, just the way they approach the the way here in the US, we we kind of build more for affordability and quickly, where in Europe they're building for buildings to last a thousand years. And so they just take these different approaches to they build more securely. They their walls, their exterior walls might be a foot and a half thick, where we're doing six uh two by six studs with then OSB and rigid foam, and so it's a 10-inch wall here, sort of thing. So it's just they they build in a very different way, and then they just come up with very clean, unique color schemes and interiors, and and they also are because you have more confined space there, you're coming up with more creative designs that that so it's kind of taking these smaller 500 square feet, 2000 square feet, and just kind of reimagining this the space of how how do you make something feel large, but its actual expansiveness isn't really that big, right? Sort of and so that I think that's an interesting design problem that we have here in in the US of we we've always kind of just kept building bigger.

SPEAKER_00 28:33

Three bedroom two bathhouse and two parts.

SPEAKER_01 28:36

I I think we're kind of kind of moving away from that. But for the trends just in the US, I I do think it comes from it comes from the big cities, I would say usually it's it's the New York CLAs or places where you're just building a lot of homes and and they're and then it's all the vendors that are involved in it too. It's it's your guys like Kohler coming up with new designs and ideas and color schemes. It's the tile companies that are coming up with new designs and color schemes. It's the the paint companies that are that are kind of following. And actually what's interesting about paint is it it seems there's some correlation with the fashion world, is is if you always look at paint, it's usually like one year behind some of the colors you'll see in fashion. And so that's I think there's like there's kind of these trends that that just kind of fall into place of you you start to see colors in one area of life and then they kind of morph and merge into another area, and so it it's really unique.

SPEAKER_00 29:24

So I think yeah, design is and you're being exposed to it or quicker, or like you learn about it quicker with social media now. Exactly. It took a while to catch up.

SPEAKER_01 29:34

And I would say, like, for for me, my social media accounts weirdly enough, I get a ton of design stuff from Poland and a ton from Australia. Those are like the two that really come.

SPEAKER_00 29:42

That's the algorithm.

SPEAKER_01 29:43

That's the algorithm, and and they're all beautiful. So I love to be able to take some of that design piece and try to put it into some of our homes here.

SPEAKER_00 29:50

So, how much time do you spend out away from work thinking about work and and seeing stuff like that? Or do you are you able to just disconnect and go fishing or hiking or something and not worry about like the latest trends in housing that you're yeah?

SPEAKER_01 30:06

I I probably spend too much time thinking about it, but it is also having now access to this kind of more creative side that I really missed in my prior career. I think that I I try to think when I'm away from work, I try to focus more on the creative pieces, the design pieces, the the colors, the flow of houses, the connection to uh to place that these homes can be. And I think that's that's more fun for me. So I do like that's a it's it's a fun puzzle to try try and solve. And so I think that's something I I really kind of think through.

SPEAKER_00 30:38

Um and does your dad have veto power on on the design and the the like you're talking about, the the sellers?

SPEAKER_01 30:46

We we have our we have an in-house designer, um, Amy, that that all our clients work with, and and she and I tend to um so you go through Amy over design. Um, but we we probably overdesign on purpose, so then my dad's only cutting out some of the stuff, so then we can still get some of the fun things in into each house. That's awesome.

SPEAKER_00 31:04

Well, but it's helpful too to know the financial side and the impact. Because sometimes designers they don't think about that, they just want what's cool and trendy and late or whatever. And exactly you have both that you're able to.

SPEAKER_01 31:18

I am very lucky in that sense, and and also I am my own worst enemy sometimes too, because there's things that I want to add into a house and I know the cost, and I just know it's not feasible, or or we start with the house with everything we want to possibly imagine, and then I see what the numbers come in, and I'm just like, well, this is not gonna work.

SPEAKER_00 31:34

But so so your dad probably likes that too, though, because he's not just you know, it's not just a one-sided it's not always no, you'll you'll police yourself and say, Okay, yeah, we can't do that. Exactly. Yeah. So is there anything that that I didn't ask you or or we didn't cover that you'd like to go over or talk about?

SPEAKER_01 31:53

It's a good question. I'm trying to think. I had a couple random kind of can construction cost facts.

SPEAKER_00 31:59

Yeah, go for it. That'd be that'd be interesting.

SPEAKER_01 32:02

Oh, yeah. So kind of coming back to the question about parts of home building process that have gotten significantly more expensive. One of the interesting facts I was reading in in preparation for this is um, and this is from the National Home Builders Association, the broader number that puts all um basically all this cost into context is in 2024 construction costs hit a record of 64% of average new home sales price, the highest in history of that data series dating back to 1998 when they first started um kind of tracking those numbers. And so so basically what that means is for us, kind of in a perfect building world, we want the cost of vertical construction to really probably account for about 50% of the total the total cost of the house. That's basically the sales price of the house versus where our construction costs are coming in and and maybe even a little bit lower than that. It depends on the type of project you're doing, whether it's a production home or a custom home, that number might fluctuate between 40 and 50 percent. But but we're really kind of getting, and I I noticed that here that that we're kind of hitting those 60 percent, 65% range. And so it's just really it's making it complicated in the sense that um building is also harder on the builders too, because the profit margins are just dropping because you're you're capped by what people are willing to pay and and what the market speaks at. But if our costs keep coming in higher, there's only so much we can do. Um so I think that that's kind of an interesting point.

SPEAKER_00 33:26

Yeah, because if if materials get too expensive and labor gets too expensive, and like you said, you can only sell the house for so much, though.

SPEAKER_01 33:34

Yeah, exactly. It's like to kind of close. I I I I think one thing that also coming back to the cost is one of the the real challenges um we face and is just the whole sense of affordability. And I think that's like where we really value our relationship with with the housing trust and you guys is that for us to ha be able to do a Royal Estate phase two as a hundred percent affordable is extremely unique and very it's like it it's kind of an honor to be a part of that, but also we know how much work went into being able to do that, and we needed help from the state and from the city of Santa Fe and to be able to make that possible. And so I I think that's a that's something that should be noted and really probably shared because it's it's something that for us to be able to do more affordable housing without any help is not is not possible. So what is it that we need to do and how do we kind of really bridge those gaps?

SPEAKER_00 34:35

Yeah, we're really we're fortunate that we had uh a governor in Lujan Grisham and state representatives and senators that are recognizing how critical housing is to the health of the state overall. And if yeah, if people can't afford to live here, they're not gonna work here, right? They're not gonna contribute to the the economy, their kids aren't gonna, they're gonna live in another state. And so yeah, yes, it's it's it like they say, crisis and opportunity. We're we're fortunate, it's it's unfortunate that things are so expensive and construction, like you just said, just continues to get more and more expensive. But we're we're fortunate that we we have a uh a state government that's willing to put money to that problem. And that's really what it what it takes. It takes money. It is, yeah. Because it I tell people all the time, it costs the same. I'm paying, like we said earlier in the podcast, we're paying as much for the concrete as the custom home and the wood and the maybe not to the scale, but still it's it's the same cost.

SPEAKER_01 35:41

Yeah, a price for a two by four is a price for a two by four, no matter what project it's going into. That's right.

SPEAKER_00 35:46

And but again, I'm not gonna sell the house to to somebody, you know, it's to the a rich person at market if I wanted if I want it to be affordable. I gotta sell it at a certain price point and that's it. Because then otherwise it's not affordable. Right.

SPEAKER_01 36:01

So exactly.

SPEAKER_00 36:02

So yeah, you're you're right. The the fact that our state and the city of Santa Fe, the city of Santa Fe has always done a really good job with trying to help with down payment assistance or funds for construction, but there's only so much money they have available. Like I think it's three million a year to spread around all of the city for helping with that. Um, but the the state has really stepped up, especially this last year. And like you said, our our uh Arroyo Estef phase two, all 20 homes were able to be affordable. So that's pretty awesome. And and uh yeah, I value the relationship we have with you and Arete Homes. And um, hopefully there'll be many more projects to come in the near future between the two of us. Absolutely.

SPEAKER_01 36:42

We certainly hope so.

SPEAKER_00 36:43

So, Riley, we end all of our podcasts asking our guests the same question. Uh, the title of our podcast is Housing Matters. And so the question I have for you is why does housing matter to you?

SPEAKER_01 36:57

Yeah, such a good question. I think housing well, housing matters in in all these ways we've kind of we've talked about today is it's it's the sense of community, it's a sense of place, it's this idea that's kind of embedded in in the American lifestyle. And um I think just being able to have a place to kind of come home home to every day, to have a place to share with your family, share with your friends, to really just have the security of a roof over your head is an inc an incredible blessing. And so I think housing is is I don't know if it can be like summarized into one word. It's it's just sort of all these, I mean, maybe, maybe it is just this this sense of place, of it's home, it's where it's where you belong, it's the place where you can relax, where you can laugh, where you can cry, where you can sleep, where you can eat. And so I think I think that's what what housing is.

SPEAKER_00 37:55

Well, Riley, that was a uh great interview. Uh, thank you for participating in this podcast and for all you do, not only for the housing trust, but the Santa Fe community as a whole. So thank you very much, Riley. This was great.

SPEAKER_01 38:08

Thank you so much for having me. It was an honor to be here.

SPEAKER_00 38:11

Thank you for listening to Housing Matters, the Housing Trust Podcast. If you enjoyed today's episode, please subscribe, share it with a friend, and leave a review. To learn more about our work and the latest at the Housing Trust, visit housingtrustonline.org. If you are interested in partnering with us or supporting our mission, we'd love to hear from you. You can find our contact information on our website.