The Valuation Metric: Building Homes for Human Flourishing

Sara Gutterman talks with Doug Tarry, President of Doug Tarry Homes and author of From Bleeding Edge to Leading Edge, about what happens when housing is valued not as a commodity, but as human infrastructure. Together, they explore why homes must do more than meet code or maximize price per square foot—they must support health, safety, resilience, connection, and long-term well-being. From net-zero homes and climate-ready design to nature-integrated communities and seven-generation thinking, this conversation reimagines what it means to build with purpose, responsibility, and care. 

Transcript

SPEAKER_02 0:04

Welcome to the Valuation Metric, a podcast about the risks, rewards, roadblocks, and revelations reshaping the way that we measure worth. I'm your host, Sarah Gutterman, CEO of Green Builder Media, North America's leading media company focused on green building and sustainable living. The central premise of this podcast is simple. Across housing, business, culture, we're measuring the wrong things. We've built systems that reward short-term extraction over long-term well-being, transaction over transformation, price over value. But homes are not just economic assets. They're the places where lives unfold. They shape our relationships, our health, our finances, our sense of safety, and our connection to the future. Today's guest, Doug Terry, president of Doug Terry Homes, Canada's second leading net zero home builder, which is also very involved in innovation and codes to transform the industry. And Doug is the author of From Bleeding Edge to Leading Edge, has spent decades building homes and communities through a deeply values-driven lens. This conversation is about much more than construction. It's about meaning, stewardship, leadership, and what happens when we begin to see housing not as a commodity, but as human infrastructure. Doug, welcome to the valuation metric.

SPEAKER_00 1:33

Thank you so much for inviting me. I'm really excited to be here today.

SPEAKER_02 1:37

Wonderful. We're so happy to have you. Now, you've spent your career building homes, but what do you actually believe a home is? Not from a transactional standpoint, but from a human standpoint. What role do homes play in shaping identity, relationships, and well-being?

SPEAKER_00 1:54

Okay. Well, the first thing is I have to clarify, I did take some time away from the industry, but the punk rock thing didn't work out. And the chef thing, I had to give that up to come back to the family. So I did have a couple of other forays in there. I believe that housing is a basic human right. And if we use that as the premise, then we have to look for this can't be just for the elite to have higher performance, safe, and healthy homes. We have to be able to deliver something that houses the underhoused and make sure that we're helping to improve society by what we the decisions we make.

SPEAKER_02 2:29

One of the core ideas behind this podcast is that modern systems often measure the wrong things. So do you think that housing has become too transactional and financialized, too commoditized? And if so, what do you think we've lost culturally or even dare I say, spiritually in the process?

SPEAKER_00 2:50

You know, I was driving down the highway the other day and I came across a livestock truck and I saw the pigs in the livestock truck. And I'm thinking, well, I know where they're going, right? Well, if we take that premise that maybe we could treat them a little bit more humanely as because we need to eat, right? No different than a builder's got to make a profit. But can we do it a little bit more humanely? If we treat our customers like livestock, we're going to get results that are poor. If we treat them humanely and try and create a better living environment for them, it helps to improve society overall. So I do think we've become transactional and I and I think we need to be more aware that what we provide is meeting basic emotional needs for our customers.

SPEAKER_02 3:35

It's interesting because I hear the term uh warehousing humans with uh housing stock that is designed and construction constructed to just extract every dollar out of every square foot that is constructed, you know, kind of building only to a price per square foot metric as opposed to a value per square foot metric, which leads me to my next question for you, which is Doug Terry Holmes is unusually values driven in an industry that's often dominated by cost cutting and short-term thinking. So talk a little bit about how you've been successful in that strategy and really manifesting that ethos. What experience has shaped your philosophy about business leadership and responsibility?

SPEAKER_00 4:22

Uh, it's a family dynamic that we apply to the company, but it's from our dad. Uh as kids, he used to take us to Alconquin Park up in north of us here every summer for a long canoe trip every week, every summer. And, you know, we'd be we'd be going and we'd get to the campsite, and he would make us clean up the campsite, even if it wasn't our mess. And it was, guys, always leave the campsite better than you found it. And that is a driving proposition for us as a company. The work ethic came from our dad as well, and that was also on the same canoe trip situation. But you'd get tired, you know, you're paddling for a long time, and I'd say, hey, dad, can we take a break? And he's like, No, switch. So instead of paddling this way, I'm now paddling this way. He'd say, switch because the change is just as good as a rest. And then about five minutes later, you'd get a whack on the elbow and it would be his paddle, and you'd look down, and on the flat of the paddle was a stick of juicy frick gum. And that was your reward for shutting up and keeping working. So that just got ingrained into us. But it's also about how we choose to provide the housing we're choosing to provide. So I'll give you an example. Uh, the city of London has an issue which is a joining community nearby. They had a fairly significant um problem with homeless. And they basically built like the slums out in the middle of nowhere, just get them on penitentiary. Here in St. Thomas, we've been working with Mayor Preston and the council for years, but we're doing a project with the YWCA. It is a fantastic looking product. It is tiny homes. Uh, yes, we're making a small profit on it. We're happy with the profit, but we are very close now to being able to label this as net zero ready product. Uh, and it'll be the first net zero tiny home community in Canada if we can get it done. And I'm very confident we're going to. Uh, it looks great. And these people are under housed, and we're helping them to provide housing that is close walking distance with trails to where they need to work and live and get their groceries. All of that is available. Now, those are choices that you can make. You can you can house them like it's a penitentiary, or you can make them integrated into our community, then they can have a better life. Which one should we do?

SPEAKER_02 6:32

I love that. In fact, we've recently done some math on um uh housing here in the US. Um, and this may or may not be applicable to Canada, I suspect it is, but uh, we've done the math where if a builder takes an acre of land and and builds uh four homes on that um uh that are, you know, average like maybe say 2,500 square feet, um, and they end up shooting, you know, those houses end up um being priced at, let's say, the national median average here in the US, which is about 430,000, um, you know, they're building, and these are round numbers, but let's say it's about $180 per square foot in terms of that math. Um, and uh whereas if they take that, if the builder takes that same acre and builds six houses that are maybe 1,300 or 1,500 square feet, and these are not, you know, similar to your tiny homes in terms of the size, a little bit bigger, certainly, but uh, you know, very feasible and actually more desirable size of a house right now. But they build that house to the amount that most you US families can qualify for, which is not $430,000. It's closer to $300,000, $250 to $350,000. Um, they actually can build a better, higher quality house that ends up being closer to say $250 per square foot. And think about what you can do with that delta between $180 per square foot versus $250 uh dollars per square foot. You can add a uh heat pump HVAC systems and uh water heaters and you know, higher quality, healthier materials. So, you know, the math works out in that sense in a similar way that you're pointing to with these tiny homes, where you know, they might not be as big, but they provide a better lived experience. So I love to hear that you're doing that.

SPEAKER_00 8:30

Well, I I actually write about this, and it's the very closing thinking in the book, Final Thoughts. And it starts off referencing Halley Selassie's speech of 1963's United Nations War, which Bob Marley turned into a song, right? And I finish off the book by asking, you know, our choice is one love or war. And I choose one love, right? But I talk about do we really need 2,800 square feet or 1400 square feet? We'll do. Right. And I think that it's it's not just, you know, locally here within the community I'm deciding to build, it's how we interact geopolitically. If we don't take care of our neighbors globally, we are going to have problems. People are going to migrate to where they can be safe, right? That's the bottom line. Whether it's caused by drought, whether it's caused by famine, whether it's caused by hurricanes. It doesn't really matter what the impetus is. People want to have safety for their families. Not everybody, but I would say the great majority, that's the driver. So, how can we get them into housing that is going to be more durable, healthier, safer, more resilient? You know, it's be they're becoming catchphrases, but there's actually meaning behind this. And I think sometimes we we lose sight of that as we think of things as more of a commodity. You know, did we make our profit margin for this year? Yes, I track profit margin. I'm in business. I have to. Can I not just do that as well as provide this service to my consumers? Our goal is to try and build that net zero home at the same cost of the other guys building code.

SPEAKER_02 10:06

So I have two questions for you based on what you just said, which I agree with everything you said and I love it. Uh, the first is philosophical, the one is more about storytelling. Um, so do you believe that builders carry a moral or even spiritual responsibility beyond simply delivering shelter to help protect those people in the way you just mentioned?

SPEAKER_00 10:30

I I think it's a fundamental requirement. Uh if we're see, I don't know if you remember this movie. It's it's a major guide in my life, but it's a wonderful life with Jimmy Stewart.

SPEAKER_02 10:41

Beautiful movie.

SPEAKER_00 10:42

Or it's called trading Bailey Park as opposed to Potterville, right? There's lots of people out there that can create Potterville, and it's not helping to move systemity forward. Our goal is to try and create Bailey Park. We want to have nature integrated within our communities. It doesn't matter what the price point is, everybody benefits by having a more holistic society. I would say that one of the best examples of that is we have in our area here, we had an issue with uh a psych uh psychiatric hospital the closed. And rather than those people being repatriated to their home communities, they all ended up in our downtown. So we had this explosion of homelessness in our downtown. And we've been working on them for more than a decade now, but really successfully in the last eight years. Do you think we would have attracted Volkswagen's PowerCo. Which will be the fourth largest factory in the world, if they'd come to our town and saw slums and the downtown and all this homelessness, but they came and they saw there was a bit of homelessness and they saw what the plan was, and they're like, we want to invest in this community, fourth largest factory in the world. We would not have gotten that if we didn't have a better plan.

SPEAKER_02 11:50

Wow, that's incredible. Why do you think that the industry has lost sight of that moral or spiritual responsibility? How do you, why do you think we've just gotten so askew uh in terms of just focusing on that bottom line of profitability and um the the monetization and commodification of housing?

SPEAKER_00 12:13

I I have to say that some of it would be uh risk avoidance, but I think a greater underlying piece is profiteering. And it's our industry has attracted people that are like they they want profit. And I'm not against profit. I don't ever want people to think that. But I don't think that that like we are not as a company, we are not driven by profit. We believe that profit is made because we do a better value proposition to our consumer. And they they choose us because they're getting greater value, they're being better recognized, we're looking at their emotional well-being. I I think that what's happening is that we've kind of lost the hands on the tools. I created this. I'm thinking about what I've created lasting a hundred years, right? I also write about that in the book, why we need to build the 100-year home. Like that's to me kind of the minimum, right? And I and I think that, you know, as you start to get people that are MBAs and they're out there about driving the dollar, it's more so about can I drive the dollar as opposed to can I give uh a benefit back to society that I can make a profit from by doing the right thing?

SPEAKER_02 13:20

Yes. Like you, I run a business and profitability is of paramount importance. Um, I had the good fortune before I co-founded Green Builder Media 21 years ago now, I was in venture capital and we I was with a mid-sized fund in Boulder, Colorado, and we invested at that time mostly in internet infrastructure, uh, one of the first storage over IP companies, which basically led to the cloud, um, one of the first uh virtual private network companies. But we had a niche since we were in Boulder where we invested in organic foods and natural retail companies like Horizon Organic Dairy and the Whole Foods of Europe, which we sold to Whole Foods. And I learned there that you, the companies can actually be more successful with that set of blended values, where it's not just about profitability, but when you include the other elements of um, you know, environmental stewardship, um, you know, social responsibility, these other things, whatever you want to call them. Um, today it's called resiliency and risk reduction and uh community investment or whatever those things are called. I don't really care what you want to call it, but that you actually uh engender more loyalty from your employees, from your team, from your customers, you reduce risk, you know, all these things. So I think you're really Doug Terry Holmes is a great example of uh that that set of blended values in a way that's helped your your um your business benefit. Um now you tell a story. I love this. I've heard this, you tell a story where, you know, as you are walking your home buyers through your homes, you don't talk about price per square foot or you don't even talk about cost. You talk about the lived experience. Walk us through how you sell one of your homes.

SPEAKER_00 15:06

Well, to be honest with you, I'm probably the worst one to ask about what the price for the home is. I I track the sales reports for sure, but it it's more so are we getting them into the right home, the right square footage and that sort of thing. But I love spending time with them down in the basement. I'll be walking them through why I've got this detail in that way. And oh, by the way, look at the ducting. And isn't that cool? There's no ducts on your floor on the main floor. They're all up high, and you can put your furniture wherever you want. I will often take them into the basement for about 15 minutes. And after about 15 minutes, and I'll say, Notice anything about being in the basement here? Yeah, my feet aren't cold. Is this floor heated? No, but we're using thermal mass to our benefit. You're going to be more comfortable. Imagine your kids playing down here. Your kids are going to feel more comfortable down here. And don't you want them to be in a safer, healthier environment? Yes, absolutely. Okay, well, it's also mode resistant. It doesn't have radon. Is that pretty good? Oh, yes, I like that, right? So we really like the sell-on emotion of how it helps the family to feel connected to the home, greater comfort, greater feeling of well-being. One of the absolute best examples I've got of this is actually from our work done in Puerto Rico after Hurricane Maria. And it didn't matter. Like we went down, I think, on four missions. The first was a triage mission, and then we did three build missions. And this was all in our own pocket, basically. A little bit of sponsorship, not enough. And invariably, we would be five days in, we're just about done, we're just grinding out that last little bit to finish. And then it would rain, and it would really rain. And you'd be in the house with the homeowner, and you'd see the look on their face. Remember, these guys have post-traumatic stress because this hurricane was so devastating. And you'd see like they would be crying with joy because the roof sounded differently. Now, you can't put a price on that to have that experience. You can live the experience, but you can't, you can't really buy that. You have to experience it. And so that's really ultimately what we're trying to do. That's kind of a microcosmic example. But that's what we're really trying to do is say, can we provide that experience to have people feel well within their home? Right?

SPEAKER_02 17:18

Yeah, that's a nice dovetail into my next question. And I'm going to give some context for this. So uh my favorite children's book is written by Antoine Descent-Exprit called The The Little Prince. I don't know if you've ever read it, but um, it's a story about this little boy, and he goes on this journey through the universe and he goes to different planets, and on one very small planet, he meets a fox. And um, the fox uh asks the little boy to tame him. And the little boy's like, I'm busy, I got things to do. I can't tame you. I don't know, even know why you want to. And the fox says, Well, when you tame me, I become your fox and you become my person. And we, you know, we basically fall in love. And they, and so the boy decides to tame the fox and they become best friends. And, you know, like most children's books, the little prince is ultimately a meditation on what truly matters in life: love, connection, responsibility, the invisible emotional truths that modern culture often overlooks. Um, and my favorite line in the book is um the fox reminds the little boy that what is essential is invisible to the eye. So when you think about housing and, you know, kind of the product that you're delivering, um, what are those invisible things that never show up in spreadsheets, appraisals, or price per square foot that you believe matter most to people?

SPEAKER_00 18:47

Well, I do this with my uh new cat, Roy, who's about eight months old, but he decides he wants to come and like kind of lay on me and he needs to get petted, and then when he's done, he'll take his back leg and push on me. Like, okay, I'm good. Stop, right? Uh we do that on the, you know, do the reclining love seat, you know, he sits with me. Where am I going with this? Um, people want to do that. They want to have that connection. So it's got nothing to do with, you know, how much the house costs, but it's again, how does it make them feel? Do they feel like they can sprawl out on the couch and their cat's gonna play with them and then they're gonna feel comfort and joy, right, in their home? And so it really to me, housing comes down to how does it make you feel? And I really try and get our team to focus on this all the time. If you are talking to a customer about a technical detail, you might have five to 10% of the customers that will respond to that because that's logic. Logic's way later in the buying proposition. Like, you know, the the buying proposition is you have to connect with them emotionally. So a cold and drafty house is not going to provide them comfort. It's not gonna make them feel good. So if you got a window that's sucking energy out the back of your head, you're you're not thinking about, oh, I'm cuddling up with my cat here. You're thinking about, wow, I don't feel good, right? I don't know why I don't feel good, but I don't feel good. That would be one lighting, and I'm not just talking about lights, but windows and how they're used to provide light throughout the day and the flow that's so much in essence of our homes now that was less so before, because we spend so much more time indoors now. It's just incredibly important. And I'm not saying you have to have massive banks of windows and you're over over-stimulating light, but you should have good vistas and a natural feeling for light to progress throughout the day. That's kind of our circadian rhythm type stuff, right? Uh it's that's also about providing some tranquility to them. So that's back to the emotion. I feel safe, I feel comfortable, I feel relaxed, I feel good about my well-being and where I'm at. That that's not transactional, that's emotion, right? And then connectivity to nature is incredibly important. If we build slums, you're going to get slum responses. If we can build in connectivity to nature so that people feel like I'm five minutes away from a trail and it's an amazing trail. I want to be on it. It gives people a different sense of connectivity and well-being. Now, the animals also don't realize that the trail was built for the humans. It's built for both. At our company, one of our, and I it's not a slogan, it's a truism, is that we don't just build for humans. We actually think about how animals are going to integrate into our communities because they're going to be there. So we may as well acknowledge it and plan for it. An example would be uh years ago, we planted this field of poppies because it was just it was uh a grassland area. Instead of it all being grass, we thought, well, let's plant this field. We had we had tourists coming to our subdivision. Who gets that? Like tourists. Another one is uh we had some old telephone poles. And so my brother Greg said, Hey, I'm gonna put a couple of pallets on top, and it's now gonna be offspray nest beside the lake we got.

unknown 22:10

Wow.

SPEAKER_00 22:11

And so we had within a year, we had ospreys nesting there.

unknown 22:14

Wow.

SPEAKER_00 22:15

So we're not just building for humans, it's actually creating this other environment or butterfly meadows. They might ultimately turn into a forested area, but it's a butterfly meadow. And the idea is we're looking at the pollinators. Well, guess who loves that? People. They can look out their window and see the birds and they feel like, wow, I'm part of I'm part of nature here. So you're getting a premium on the lot, and you didn't really do anything other than plant, you know, green that was this high when you planted it. But you plan for it. So one of the aspects I talk about in the book is developer friend or foe. Are we actually out here to rape and pillage, or are we actually trying to create a better society? Can we make money by doing it the way I'm talking about? We planted trees 20 odd years ago. They were saplings like this, and we had the environmental club at the local high school planting for us. Those are now forested lots.

SPEAKER_02 23:08

That's incredible.

SPEAKER_00 23:08

Because we planted it 20 years before we needed it.

SPEAKER_02 23:10

Yep. Yeah. What's the the Chinese saying, the best time to plant a tree is 30 years ago. The next best time to plant a tree is today.

SPEAKER_00 23:19

Yeah, absolutely. And we've done this concept called microforesting. We didn't even know that that was the name of it. Just, you know, that's what Brother Greg did. Was we we just we we plant microforests and break up within our communities. And then we found there's this whole culture out of Japan about microforesting. And an arborist uh horniculturalist that was famous for this, I was like, oh wow, that that's there's actually a guy that did this. We just made it up. And then found out afterwards that there's actually a movement about it. I was like, well, that makes sense.

SPEAKER_02 23:51

I love that. So, Doug, we live in this culture that's obsessed with speed and optimization and extraction. How do you resist that pressure personally and professionally? How do you stay connected to purpose in an industry that often rewards the opposite?

SPEAKER_00 24:10

I would say that professionally, I believe that we have to be able to build faster, better, and at less cost. Uh, I think that also means we have to look at stocking values within. So, a great example I often give is when we talk about if I ask you to spend 10% more on your window package, and you and I've talked about this one, if I ask you to spend 10% more on your window package, you're gonna tell me to pound sand. Doug, I'm not doing that. Like I'm not spending an extra thousand bucks on my windows. Yeah, but if I say, okay, I want you to spend an extra thousand bucks on your windows, but your bulkheads are gonna get smaller, your mechanical system is gonna get smaller, you're gonna have greater comfort within the home and it's gonna be healthier for you. Your overall cost went down by spending $1,000 more on the windows. Would you do it? And the answer, the vast majority of times, is going to be yes, absolutely. And that's because we stacked value and we got past first cost. And ultimately, I think that this is one of the greatest mistakes we make as builders is we look at first cost and say no.

unknown 25:06

Yeah.

SPEAKER_00 25:06

And that that's something that I think we have to get beyond. I want to be able to build, like I said, that home for the same price as the Code Bill Kai.

SPEAKER_02 25:18

Yes. Well, you know, all of our cognition smart data shows that um all four generations that are impacting the housing market today, boomers, X's, millennials, and Zs, tell us that they're looking more at long-term uh costs and operating costs than they are at first cost and price per square foot when making home buying decisions. And all of those four generations, but particularly millennials and Gen Z, tell us that uh they are willing to or already have invested in uh upgrades like energy efficiency, electrification, resiliency, um, water-related uh upgrades, uh, health and wellness upgrades, if those upgrades will lower their operating costs because they get the ROI. It's a pretty easy equation. So um, you know, I think that that the data is there that shows that the consumer desire uh is there. Um now, when you think about legacy, what matters most to you, not in terms of what you've built physically, but what you've helped cultivate in people, families, communities, or the culture in general.

SPEAKER_00 26:30

Uh I would have to say probably number one with the bullet would be watching people use the trails. You know, I remember it was probably 15 odd years ago now when we were like, okay, we're we're gonna build this house, we're gonna use it for a fundraiser, and and we're gonna use that money for putting in this trail connection we had to get from one community to the next. And we went to the municipality and they're like, we don't know how to handle this, we don't have a trail plan. I said, Well, we're doing it. We're just like, we're going forward, we're gonna do it. My brother Greg and I were adamant, we're we're we're doing this. And uh, and so we did. And then that led to the community saying, We need a master trail plan because we have to figure out how to like connect into what you're doing here. And so they developed an active transportation plan and a master trail plan. And I sat on the one, the one working group, and it led to this integrated network of trails that actually changed the impression of our community. It used to be, well, we're south of the 401, that's a major highway in southern Ontario. We're south of the 401, nobody lives there at south of the 401, to now it's the preferred destination because we have this integrated trail network. The first year of COVID, we went from from six, seven years before that there was no trails. The first year of COVID, there was a million users of our trail network here in St. Thomas.

SPEAKER_02 27:48

That's incredible.

SPEAKER_00 27:49

So that that is something like, you know, I'll be long gone and it's still going to be there, and people will still be using it. So that's back to the you plant a tree, you might never enjoy the shade. Well, I'm actually getting to use it because I don't want to ride my bike on the highway anymore. I'd rather ride my bike on the trails, I feel safer. Um, the other one that's a really it's kind of a buzz, I gotta admit, is when I see other builders that are using our details. And I'll help them. If they ask me, it's like, yeah, sure, I'll share it with you. I don't mind. But that's where you're starting to get the acknowledgement. Hey, we're on the right track, we're making a difference. If they're picking up on it and they have to do it, then that's cool. An example of that would be uh we use these canvas recycle bins. They're they're six by six by four and a half. And we were one of the very first builders to do this, and now it's ubiquitous. Everybody uses these, and it keeps the job site so much safer and cleaner. But then it comes back to okay, but I want to look at lean now, and I will teach my staff and anybody else that wants to listen to this about lean, hey, how many of those bins do you think the customer wants to pay for? One? They want to pay for three, or is it five? How about zero? They don't want to pay for anything. So, how do we eliminate that? And that that's another one of those legacy pieces is we're teaching the industry to think leaner because everybody deserves to have high performance housing.

SPEAKER_02 29:11

I love that. Thank you for that leadership. Um, in a previous episode, I talked about how many of our systems today are really governed by fear. Fear in markets, fear in companies, fear in people. And as we know, fear narrows imagination. Do you think fear drives a lot of decision making in housing today? And what does cur courageous leadership look like in response to that?

SPEAKER_00 29:40

I think it's maybe not just necessarily fear, but also perhaps risk aversion. I I think that you know, builders feel like it's death by a thousand paper cuts. You're gonna ask me to do this, this, this, this, this, and the list just keeps getting longer. And part of that is goes back to the code cycle saying you've got, you know, non-builders with the best of intention out there that are special interest groups that just we got to have this. We got to have this, we got to have this. But when you stack this and this and this and this and this together, all of a sudden the builders go, I don't know what I'm building anymore. So there gets to be pushback because you're like, can I just please understand what it is I'm supposed to deliver and understand how I'm gonna make any money whatsoever on it? Oh, and by the way, you want me to warranty it as well. I don't even know what I'm putting into this house, and I've got to warranty that how does that work? So there's like, I think there's a fundamental breakdown in how we do our codes that's a root problem. Beyond that, then it comes back to the and I got to make money. And I'm okay with that. I, you know, fill your boots, Matt. If you got to make money, that that's great. But can we do it by looking at what's better for the consumer? And that's where I think we we break down because the risks have gotten so big. You know, I remember the one community that we're in right now, we bought that land, and this is Canadian dollars, so it's like monopoly money, okay? We bought that land with $7,000 an acre. It's now worth about $500,000 an acre.

unknown 31:08

Right?

SPEAKER_00 31:08

So great, we're you know, we're making a buck or two. But now when guys are buying it, you know, raw land, and I'm saying that because it's a development plan of subdivision, that's why, like service lots. When we're looking at raw land, and raw land is now $150,000 to $160,000 an acre for raw land that can't be developed for 10 years, you start making those bets, and yeah, you're attracting investors that need to make a profit. So I don't know how you put that genie back in the bottle, but it starts with the land.

SPEAKER_02 31:43

Yeah, interesting.

SPEAKER_00 31:44

And you know, we've got this massive land mass. How is it that we're having a housing crisis on affordability when we've got like it's not like Europe where you're so condensed, like we're so spread out, and yet our housing is getting like you said, 400,000. I know US, I'm going, okay, that's about 1.6, so that's about 640,000 roughly. Oh, well, that that's for 2800 square feet, that's insane. We'd be Canadian, we'd be another hundred and change thousand on top of that, and that's an inexpensive market.

SPEAKER_02 32:17

Wow, interesting. Yeah.

SPEAKER_00 32:19

Yeah.

SPEAKER_02 32:20

So um let me ask you kind of a multi-layered question. Um, you know, there's a this growing sense that people are exhausted, not just financially, but emotionally and spiritually. Uh, do you think that the built environment can deepen or heal that exhaustion? And um, kind of as a follow-on question to that, what do you think happens to society, to our culture, when homes stop being sanctuaries and start really becoming speculative investments?

SPEAKER_00 32:53

I think if we don't meet our customers' emotional needs, then it will worsen. I think it's critically important that we we have to be able to, that's just a and to me, it's a fundamental that we have to get to. The concern is um there they are, the homes are becoming more transactional. And we actually work pretty hard to try and keep investors out. I guess sometimes you can't help it, but we're trying to create communities, neighborhoods, if you will, where people feel connected to each other. And some of that is you see each other out on the walk, you see each other, you put your garbage out, you know who your neighbor is. Hey, listen, can you watch the cat for me tonight? Because I gotta I gotta bust to move, I'm out the door, right? That sort of thing. And I think that we we we can't lose sight of that. I don't know what the perfect answer is, but I think looking at it holistically and how we interconnect our neighborhoods, it's not just the house. And I and I and I think we we assume that the developer gets a pass here, and I don't think they should. Housing is critically important, but it's where the house is nestled also makes a big impact. And I'm not saying it has to be a forested lot, you know. No, no, it can be like the homes can be together and tight, but is there a space? Can people breathe? Do they feel like they're stacked on top of each other? And I get you're gonna have to offer that type of product as well, but then what's the local amenity? So the tighter it is, the better the local amenity better be.

SPEAKER_02 34:22

What do you think people are truly searching for when they are looking for a home?

SPEAKER_00 34:29

Wow. Um I think it's important that like it's not, you know, the green buzzwords. It's it's really comes back again, and I'm being a bit redundant. It's about how it makes them feel. Is my family gonna be safe here? You know, is is are the kids gonna be able to play like you know, floor hockey downstairs? Um, are they gonna be safe? Is it is it is it a mess? You know, am I going into a community that doesn't feel safe? Trails are fantastic, but if it's a narrow little corridor that's like fenced on both sides and you can't see the end, it does not make people feel comfortable. They are they get kind of uptake about that. So it's it's about providing space. And oftentimes I think what happens is we try and cram so many people into a specific area. The more the density happens, the better the amenity green space has to be, in my opinion.

unknown 35:25

Interesting.

SPEAKER_00 35:26

And so what they're looking for is lifestyle doesn't really do it justice. It's part of it, but it's the emotional attachment to well-being that I think is on some of our radars, maybe not enough people's radars, but I think it's the emotional attachment to well-being. Lifestyle is a portion of that, in my opinion.

SPEAKER_02 35:46

So if we are able to transition from this antiquated housing metric of price per square foot, which only tells you how big a house is and what it costs today, to a new metric like value per square foot that incorporates health and well-being, resiliency, performance, sustainability, energy independence, what changes culturally and economically.

SPEAKER_00 36:10

Well, I and I'm not sure if I fully understand the value per square foot if if we're talking about like trying to attach a dollar metric to it, or if we're trying to attach what's contributing to their perception of value, because people's perception of value can can vary somewhat. But I think at the root, are we are we meeting what the need is? I like to talk about total value contribution. And you can use whatever index you want to include within that, but it comes down to the decision making on whether we should add something or not, add something, whether we should take something out or not. And part of that is are we improving their emotional well-being? Part of it is is it better for the environment? Part of it is is it better? Um whatever your metric is. And I and I think that we have to look beyond first cost because that's it it's a bad and a leading indicator if you're only looking at first cost, because you can stack first together and get a total price, but if you're adding the wrong things together, I'll give you back to the garbage bins. Do they really want to pay for five garbage bins or would they be okay with only paying for one? There's no value to the garbage bins. We need them, but there's no value to the customer. So what are they willingly gonna pay for? What would they like to have and try and give them that?

SPEAKER_02 37:37

Yeah. Doug, what gives you hope right now, despite the instability we see across housing, climate, economics, and culture? What makes you believe a better future is possible?

SPEAKER_00 37:52

Well, I guess one thing I would say is that in this downturn, and it's been fairly dramatic for a couple of years up here north of the border, um, it only really started to hit us about, say, six, seven months ago. And it was we we hit the wall just like everybody else has. Um, but there's still people out there, and I think one of the drivers of why we stayed busier longer than everybody else, is because we had that value proposition figured out. And I and I see our sales returning faster than others because of the same reason. Uh, you know, I'm never gonna win on that buyer that's looking for the lowest cost per square foot. Like we're just we're not that guy because that that consumer is not educated enough to understand value. And so we we try and uh we try and relate with our customers based on value all the time. Are we perfect at it? Absolutely not. Are we able to get better at it? Continually, we have to stay on the path of continual improvement. Do you know that later today I'm I'm leaving you to go to an event we're having, which is celebrating the 20th year, 20th anniversary of us building energy star homes.

SPEAKER_02 39:02

Congratulations.

SPEAKER_00 39:03

That's pretty cool. Yeah, and in that time, five times the Canadian government, Natural Resources Canada, has named us as Energy Star Builder of the Year.

unknown 39:11

Wonderful.

SPEAKER_00 39:12

Five times. That's kind of cool. Yeah, that's a pretty good legacy piece, too, eh?

SPEAKER_02 39:16

Yes.

SPEAKER_00 39:18

So I'd say value. Let's let's continue to focus on value, but we have to figure out what the client sees as the value, not what our perception is. We could love it. Like, you know, I was mentioning to you before this uh Sun Amphermino. I think it's a really awesome water heater opportunity. But if the clients look at that and say, I don't trust it, I'm not buying this, there's no end to selling that's gonna make that work. So we have to make sure that we fully understand it. The staff's got to be fully engaged on it, and hopefully it's gonna be a game changer for us.

SPEAKER_02 39:49

Indeed. Now I ask these final two questions to all of my guests. The first is what does value per square foot mean to you?

SPEAKER_00 40:00

Whatever the customer tells me it is.

SPEAKER_02 40:03

All right. So aligning your values with your buyer's values.

SPEAKER_00 40:08

Yeah, if you're if you're not connecting to your buyer on a root basis, then there's maybe something wrong with what you think is your value proposition. If you want, you know, a gold-plated toilet and they're like, can I have just a tall elongated toilet? We might have an issue with our value proposition. So I would say we have to be in connection with with what is important to our customers and and make our decisions based on that. And that's going to vary by market. If I'm in a forest integration area, I darn well better be providing a better fire interface, right? You know that the area you're in. For me, it's wind, you know, and and that's included in our price, but I can go further than that. So I've got a base wind package, but then if I want to get into LifeArc, I've got a it goes even further than that. And LifeArc conceptually would be we're looking at this area needs this package, this area might need this package and this package, whether it's wind, whether it's hail, whether it's uh fire, whether it's flooding, what's required in your area? And that's a supplement to life arc. The other piece to that is can we go off grid for an extended period? And so we're about to build our fourth and fifth life arcs now in the next little while. And we are really pushing hard on this because we think it's where society is going to go. And we believe that there's gonna be high benefit for at least the rough end portion to be something the clients want because they want their family to feel safe and they're concerned about changing weather patterns. It's actually a thing.

SPEAKER_02 41:39

Indeed. Well, we have some really interesting data that shows that uh the younger the generation, uh, the more they're concerned about climate impacts on their home and the more they're considering moving uh to kind of a climate safe haven um because of the changing climate. Uh so you know, the that uh willingness and interest and awareness is highest among uh Gen Zs and then millennials, then X-Res, and fairly low among boomers because a lot of them are in their forever homes.

SPEAKER_00 42:08

Um, but I might get in trouble with I might get in trouble with other builders on this, but if I was a young person looking where to buy a home, I'd probably look to make sure there's a major source of water nearby. Like the Colorado River basin might not be a great bat right now, just saying.

SPEAKER_02 42:23

I get it. I'm actually um we have uh a property that has the first water rights on one of the major tributaries to the Gunnison River, which is a major tributary to the Colorado. And uh we're feeling pretty lucky because by the time that our water reaches LA, it's been used and recycled and put back into the waterway 12 times. So water is a huge mitigating uh factor.

SPEAKER_00 42:51

You know what one of the number one exports out of California is water and all your food.

SPEAKER_02 42:58

Right. Yep, indeed. Indeed. Uh, but I also agree with you in terms of energy independence that is absolutely soaring in terms of interest um as we query our consumer audience in terms of priorities, particularly resiliency-related priorities. It's um making sure that they have a fire-safe roof and then battery storage and backup and you know, some level of energy independence. We won't build a project anymore that's not energy, you know, doesn't have some level of capability of energy independence, even if it's for a short time.

SPEAKER_00 43:30

Yeah, we're we're trying to target three days, and it doesn't mean that you're gonna maintain a perfect 22 Celsius temperature. Sure. 71, 72 Fahrenheit. It's really about like, can they survive? Yeah. Can we keep the occupant alive? And we don't want to lose the building to freezing.

SPEAKER_02 43:44

Yes, indeed.

SPEAKER_00 43:45

Your your freezing uh ice storm or big the big storm you had in in Texas back about four years ago. That was a major game changer. A lot of the problems was is where the water heaters were, but that was a significant named wintertime storm.

SPEAKER_02 43:59

Well it Changed people's minds in terms of that lived experience, how they live in their home, how they perceive the safety and security of their home, but it also changed their experience because of the spiking uh utility bills. Um, you know, there are folks in Texas that um, you know, had to pay hundreds of dollars more than they normally would on any given month um because of that stor that that storm and you know the spike in those bills.

SPEAKER_00 44:29

And it was only half a year before that there was a heat dome in BC that killed 800 people in six days.

SPEAKER_02 44:34

I remember that, yeah. Yes, yeah. Well, you know, we used to say that it was a here in the US, um, that it was a tale of two countries where the western half of the U.S. um had too little water and you know struggled with drought and wildfires, and uh the eastern half of the U.S. struggled with superstorms and flooding and too much water. But now we're seeing wildfires in New York and New Jersey in February, or you know, just uh last month in April. There were these massive wildfires in Georgia and Florida and uh, you know, and and flooding in California because the soil has had, you know, can't retain uh stormwater. So it's it's really everything that we once thought we knew in a more stable climate, you know, we'll say uh decades ago is no longer applicable. But even in terms of like a changing climate that we thought we knew 10 years ago is no longer applicable, applicable. And I know, you know, the folks in US states get the Canadian wildfire smoke now. And so it's a whole new reality. And we don't even know what we don't know at this point. So um, you know, I think it makes it that much more important that we really do create homes as sanctuaries and try to future proof our homes and communities from a resiliency standpoint as much as we can.

SPEAKER_00 45:51

And that's honestly why we're investing so heavily in life art. And it's not that we think Dugterie Homes needs to have a program exclusive to us. No, we're trying to create this program to share with industry because we recognize there's a gap here. So we'll, you know, we'll guinea pig it. We're happy to pilot the thing, but that's not the end goal. The end goal is where can this land that other builders can say, yes, this makes sense. At least let's get LifeArc ready as a standard. We're very close. We think we can do LifeArc ready as a standard within six months. So then it's starting to look at, okay, how do we create the program? We're we're investigating that. No.

SPEAKER_02 46:28

Now, if people want to learn more about LifeArc, where can they go?

SPEAKER_00 46:32

The book. It's in the book.

SPEAKER_02 46:33

Okay. And speaking of the book, I was gonna ask you that next. If they want to buy the book, where's the best place to do that? What they should what should they do?

SPEAKER_00 46:40

Well, I would say I make more money if you buy it off of Freeze and Press, but you can get it on Amazon too. This is the book right here. From Bleeding Edge to Leading Edge, a booter's guide, the Nets are a home. This is my annotated edition. I got all my cheat notes in there. Um, yeah, and happy to do it. I'm actually looking at doing my Life Art Bootcamp again this year, where we walk people through like the secret sauce about what we do, because it just it's not enough. If you know, back to that legacy piece. If we're the only guys knowing how to do it, I'm doing something wrong.

SPEAKER_02 47:11

Yes. Um, and I have read the book, and I absolutely can tell our listeners that it is a worthwhile and fascinating read. So pick up the book. Thank you. Absolutely. Yeah. Uh reading.

SPEAKER_00 47:24

I have to admit, I don't look that good in the peanut butter incident. I'm just saying. Yeah, but you know, I was truth, truth sharing. Truth sharing there.

SPEAKER_02 47:37

All right, Doug. So for my final question, if listeners could carry one idea forward from this conversation, one truth that changes how they see the world and really perceive value, what would it be?

SPEAKER_00 47:52

I think we have to do a much better job of caring for each other, not just as homeowners. I think societally. We, you know, we we we seem to have lost the middle ground here. And that's it's a sh it's a shame, you know. I don't really care what color stripe you are or what your your your thought process is. Are you a good person and can you help make the world a little bit more comforting of a place? Or are you just there to to to take? And try not to be that person, I would say is is what I would want to see. And if I if I can pass that legacy along to anybody to say there's a better way here, then I'll feel pretty good about the world.

SPEAKER_02 48:30

Oh, I love that so much. One of my favorite mantras is just be kind. Everybody's going through something. So a little kindness goes a long way. Well, Doug, thank you so much for joining us on this episode of the valuation metric. I have enjoyed this significantly. Um, you know, one of the ideas that I always return to is that value is relational. You know, a home has value not simply because of what it costs to build, but because of what it protects and supports and holds together and nurtures and fosters. And, you know, from this conversation, you know, maybe the real shift before us is not just learning how to measure differently, but also how to see and perceive differently. Because when we align what we measure with what we truly value, we begin creating homes and businesses and systems that really support human flourishing, not only economic activity, even though that economic activity is of paramount importance.

SPEAKER_00 49:29

I think, Sarah, that another lesson that we've kind of learned is our work with indigenous communities here nearby. And, you know, they they look at seven-generation thinking, like planning for seven generations in the future. And and we that that for us, we would say it's the hundred-year home, but we societally maybe need to do a little bit more of that as well, you know, to think of our children's children's children and what what their world is going to be and how do we make sure that they've got a world that's worth inhabiting.

SPEAKER_02 49:59

I love that so much.

SPEAKER_00 50:00

And that's not just environmentally, it really isn't. It's about the society we're creating.

SPEAKER_02 50:06

It's so true. You know, if you think about how technology and, you know, these things and you know, AI, which I use every day, by the way, um, uh, you know, and digitization in general has sped up our world and um created a bit of a disconnection. I think you're right that um, you know, it's perhaps our duty to find ways to uh help foster reconnection. Yeah, yeah. So I agree. Well, Doug, thank you again so much. Uh, this is the valuation metric. I'm Sarah Gutterman reminding us to uh value and measure what is worthwhile because when we do, we build a better world. Thank you.

SPEAKER_01 50:49

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