Housing Innovation Alliance's Podcast

Affordable, Healthy, Earth Friendly + a Sound Investment with Douglas Gilliland, Taurus

June 29, 2020 Housing Innovation Alliance Season 1 Episode 9
Housing Innovation Alliance's Podcast
Affordable, Healthy, Earth Friendly + a Sound Investment with Douglas Gilliland, Taurus
Show Notes Transcript

Calling all homebuilders, residential developers, and community policy makers –this one's for you! Learn the most cost efficient and easy way for today’s home builders to deliver high-tech, zero energy-capable homes at an attainable cost- for the mass market. "The world is changing, and we need to do our part to make that change serve both our fellow humans, while caring for the earth that sustains us. We must have a win-win belief system."

Get to know Douglas, President of Taurus of Texas Holdings, a local partner of Taurus Investment Holdings, a worldwide real estate investment firm. And founder and advisor for EcoSmart Solution, an innovative energy provider. Check out Whisper Valley, developed by Taurus, voted Green Builder Sustainable Community in 2019. 

Douglas is a Past President of the Texas Association of Builder and a National Vice President of NAHB, he currently serves on the Community Development Council at ULI and is committed and passionate about creating sustainability and meaningful lifestyles.

Many thanks to our partners at the University of Denver for their editing and post-production talents, specifically Lija Miller and Lisette Zamora-Galarza.

The University of Denver Franklin L. Burns School of Real Estate and Construction Management, teaches the full life cycle of the built environment. From integrated project leadership skills to a cohesive understanding of the built environment ––experience the only school of its kind!

"Upbeat Party" is brought to you by Scott Holmes, songwriter from Free Music Archive

Support the show (http://www.housinginnovationalliance.com/join-us/)

Eric Holt (00:06):

You're listening to the housing innovation Alliance podcast in partnership with the university of Denver's Franklin L burns school of real estate and construction management. The housing innovation Alliance is a nationwide community of game changers driving the future of home delivery through crowd accelerated innovation. We represent thought leaders from dirt to dweller with a focus on the production builders business environment.

Speaker 2 (00:33):

Hi, this is Dennis Steigerwalt and the president of the housing innovation Alliance. And you're listening to our podcast series. I'm joined today by Douglas Gilleland, president of tourists of Texas holdings, a real estate developer based out of Austin. Welcome Douglas. You know, we've had a lot of opportunity to talk together over the past year or so, but you know, what I want to get into today is really talk to you about your role as a developer and leading collaborative innovation for a better world and better placemaking. And I think that for me hearing some of your stories through our other conversations, I think the best place to start would be, you know, tell us a little bit about your career path. I know this development's been a family business, so maybe you can talk a little bit about, what's been passed down to you from those around you, a bit about your purpose and just the journey you've been on.

Speaker 3 (01:20):

Sure. So Dennis, I am a second generation developer. I was under the tutorship of my father. You know, I was sort of my self as a land developer. And at one point he said, no, what you really are as a promoter. And when I first heard that, I took a little bit of exception to it, knowing the stereotypical idea of what a promoter is. And he said, no, you have to understand you're promoting ideas and you're creating dreams and you're fulfilling the expectations of the people that you serve. You can't have a much higher calling than that. So that's always stuck in my mind. I'm excited about land development. I'm particular, I'm excited about the direction that's going. I love innovation. I think we have a responsibility to deal with change and we have to go through that change according to the needs of the people that we serve.

Speaker 2 (02:10):

Okay. Douglas. So in your, in your journey as a developer, one of the things that stands out to me specifically, as I've been looking at the projects you've been involved in, some of the things we've talked about is you have a real commitment to sustainability. Can you tell us a little bit more about that commitment, where that comes from and what you're looking to achieve? Sure. You know, it's been my experience that within the industry, you find companies that try to be green, they produce green products and they're committed to that sustainable principle. And then on the other side, you have builders and developers who have investors that they're trying to generate a certain return to. And sometimes there's a gap between environmentalism and capitalism. And so our goal, my goal has been to create communities that respect sustainable principles. And at the same time that provide

Speaker 3 (03:00):

The return, my investors are expecting if we can be successful in creating that model, I think it becomes sort of a template for others to think that it is achievable to be sustainable and to live in a capitalistic community.

Speaker 2 (03:16):

And to propagate these ideas, you have two business entities that you kind of operate through, right? You have the tourists of Texas holdings, which is part of a larger global firm. And then you also have EcoSmart. Can you tell us a little bit about those two entities and how they

Speaker 3 (03:29):

Yeah, it's a great marriage between the two principles. Uh, Tarsa Texas is what's called a local partner for Tarsus investment holdings, which is an international real estate development firm. And our activity is, is really creating communities, working with a group of investors and to help us get to the sustainable principles that we believe in. We created a company called EcoSmart solution, which is a, an energy delivery company. And it's really through EcoSmart that we're developing principles of how to look at developing a little bit differently. And the balance is between being very sustainable and at the same time doing communities that are in some ways look like traditional communities, but we're able to blend the two together. Okay.

Speaker 2 (04:14):

In one of those communities that I was, I had the pleasure to visit last last fall was whisper Valley. Can you, uh, let's, let's tell our community about a bit about that project that you're working on. We're excited because whisper Valley,

Speaker 3 (04:26):

It really represents those principles put into practice. So we have a 2000 acre community. So it's a large plant community. We have entitlements for 7,500 homes. It's mixed juice. We have 2 million square feet of services and villages all connected together with 700 acres of open space. So it is a, it's a large community and our branding principles that we've been able to carry out there is number one, we want to remain affordable. When you put that entire load of innovation on the builder to meet changing energy codes or higher efficiency, the result oftentimes is a more expensive home and it becomes unattainable for more and more consumers. So we found one of the keys to be able to create the affordability is to look at helping the builder by actually changing our infrastructure, the traditional developer as roads and streets and sewer and water and so forth.

Speaker 3 (05:19):

But so our product start in the two hundreds go up into the four hundreds. And our goal is to be able to provide housing the first time and second time home buyers or families that are transitioning down into different life styles. There's just a, a lot of different types of products that we're doing, that all the homes have zero energy capability. And that just simply means that we can build a homes and have very low or nonexistent utility bills. We add another infrastructure called the geo grid and the geogrid is just using geothermal technology. That's been around forever. It's very clean in the environment, very efficient, but what we did was to, instead of putting the geogrid or the geo lines in the ground, one house at a time, which is very difficult to do with production builders, very expensive. We put the geogrid in just like you'd put in a water line.

Speaker 3 (06:14):

We ran the grid. We have a Wells on each lot that are connected together with the district system and made it very easy for builders just to tap into. So the really great thing is people love geothermal energy because of its efficiency and cleanliness. And all the builder has to do is bring their standard production floor plans and, and hook onto the geogrid just like that hook onto a meter for a water line. So the only thing that they change in their home really is that they replace the central heating and traditional sensor, central heating and air system with a ground source heat pump. That means they don't have to have a noisy outside condenser. It's one unit that goes in the attic. It's very small, uh, very easy to hook onto. And then every house in the community, we add solar panels. So we, we create an energy production ability.

Speaker 3 (07:06):

And so the combination of creating energy and reducing consumption allows the home to be zero energy capable. And most importantly, it allows it to do that at an affordable price. So that change then allows the home to operate very efficiently. It reduces energy consumption by about 65%, uh, very low utility bills. And we want to do it in a way that's environmentally sensitive, that is respectful of the earth. We also know that housing is changing. So technology is very important to us. We have super fast one gigabyte service through Google and all of our homes, all of our homes are pre-wired for hybrid and electric vehicles. And there are devices that we put into our design guidelines in the homes. We have security, doorbells, very energy, efficient appliances. So the homes are designed to interact very well with the lifestyle of the folks that live there.

Speaker 3 (08:02):

And then finally we believe in healthy living, we have fitness center resort-style pool, and in those 700 acres of open space, we have lots of pedestrian trails. We find that the biggest amenity is just getting people outdoors and involved with community activities together. We have a dog park, we have gathering areas throughout the community. So the emphasis is on affordable quality lifestyle. That's very friendly to the earth and it's working great. Our builders have adjusted to the things we've asked them to do. Our consumers are really reacting. Well. We found a new group of consumers that what we call our environmental activists. These are people that really have always been seeking these types of principles. And they've just not found very many communities that are committed to this idea and knowing how well the sales have gone and how our builders have responded. We know that this demand is going to grow beyond just Austin, Texas.

Speaker 3 (08:59):

And what we've found is that it's easy for the builders to build. And more importantly, it's easier for the, the lenders to underwrite in their mortgages. We're all hearing more about green mortgages. Lenders love to offer green mortgages. And then most importantly to the mortgage lenders is that appraisers have no problems appraising the green investment that we're making in the homes. In fact, most appraisers are surprised that we can bring this package and this green package into the home at such an affordable price. So it's a real win, win situation. Many cities are really embracing our land use ideas. Cities tend to be the leaders in setting up zoning codes and conditions for development. And when we sit down with city after city and they see our commitment to these sustainable principles, they're literally interested in writing those into their land codes.

Speaker 2 (09:48):

Would you mind just sharing some stories with us? So some of the hurdles you faced and how you overcame them with different parties involved in this collaboration?

Speaker 3 (09:57):

Sure. You know, it took us three years Dennis, to bring in our first production home builder. So what we found in that process, and we've talked to builders the largest down to the smallest, what we found was that builders tend not to be innovators. They tend to be the slowest to change in society. They're very production oriented in that they want certain number of units, a certain return on investment and so forth. So what we found is that our biggest challenge was education. We realized that to change builder's minds, it wasn't enough just to change the leadership of the company. We had to go in and, and sit down with the purchasing department, the architectural department, the marketing department. And what we found is that if we could show them that this was an easy transition from the way they're normally doing business into something that really takes them where they want to go. Anyway, most builders are interested in innovation. It's just very difficult for them to do it sometimes in that corporate environment. So, um, EcoSmart, and Tarsem Texas have really sort of taken their hands and walk them through that, uh, transition, uh, corporately in their culture so that now we've shown them a path that they can reach their goals, which is a to comply with codes, but B go beyond those codes and really become innovators.

Speaker 2 (11:22):

Yeah. And I mean, and this really isn't the builder's fault as you described, right. And organizations do what they're organized to do. And, and it's, you know, they're operating with tight margins and historically the risk reward profile just didn't match up. Um, you know, we have, you have a situation where on it just wasn't embraced or encouraged as it, as it has been in other industries, but that's with rapidly changing market dynamics. I think we have a whole new opportunity in front of us and it's going to take pioneers like yourself to help guide us on that journey.

Speaker 3 (11:52):

Yeah. I really think the most, the simplest message that we can use to communicate with builders is one they understand very well, which is we want to increase their margins and we want to increase the number of units that they sell. Uh, most corporate judgements are made by the production performance. And once they understand that they have a strong market that wants to purchase this type of technology, and once they understand how to price it and to get it appraised, they're actually finding that they can distinguish themselves from other builders much more. And in doing so capture a market that gives them an opportunity to have a better margin. And so what we have found in the, in the sub markets that we're in, we're outperforming our competition and in the mindset of most corporate builders, that's how you're judged. So the educational part was the second major thing, which was, it's not hard to make the transition into this building program.

Speaker 3 (12:50):

And because we, as the developer, we're committed to, we wrote design guidelines and deed restrictions, and we really created a path for each department in their companies to easily go through the necessary steps to get to the product that we're, that we're offering. So we're able to help them achieve what their goals are. And that's really what builders need to understand is that they don't have to radically change their culture, uh, or change their, their expectations. If they will simply go through the very easy learning curve, we can take them generally where they want to go.

Speaker 2 (13:22):

And I think we all have this tendency to fall into, um, kind of the paradox of things are so good. We're too busy to look at the new or the flip side. Things are not, things are a little tough and we don't have the money to invest. And I think that's another kind of experience we're all having at this point in time where we're kind of looking beyond and saying, where do we need to invest now? Because this is gonna, this has caused us all to kind of stop pause, look at process, right. And identify opportunities to eliminate inefficiencies. Now you're not doing this alone. You've mentioned that you have, you know, tourist, global organization supporting you of EcoSmart you have your collaborators locally, but there's also a number of product manufacturers that are involved in this community. I know you had mentioned the high speed internet Google's involved. Correct. And there's another, a number of others that you've, you've collaborated with to help educate all the stakeholders involved. Can you tell us a little bit about that, those partnerships?

Speaker 3 (14:13):

So, so what's really exciting is that there's a humongous amount of capital that's being invested at new products and what we found by having scalability, uh, and by writing the deed restrictions and showing the way that we become an access point for some of the best manufacturers in the world. And we found people like Bosch who have come in and helped us with our heat pumps and very energy efficient appliances. Uh, we're working with Tesla. All of our houses are pre-wired for a charging station. Uh, we're ready for hybrid cars and electric cars. There are companies like Enertech those, and WaterFurnace who phenomenal at producing quality, uh, key pumps. And what we're able to do for them is to show them how they can get access into the production, uh, market. Uh, and then they're able to bring even a additional products that, that are becoming very innovative.

Speaker 3 (15:05):

So it's all about data and measuring and monitoring the effect of some of this technology. So we're finding that the innovative manufacturers are out there. They need somebody to write the script if you will. And because we've taken on that role as the developer and brought them together with the builders are finding that it's much more affordable because of the scalability. The markets are changing. The environments are changing. We're moving from a carbon based society to a renewable society. Buying habits are changing. Traditional views about homeownership are changing and the earth will be the beneficiary as well as our society.

Speaker 2 (15:41):

So do you, do you think with everything we've gone through with the recent public health challenge, that we're going to have a renewed focus on consumers desires versus the per let's say the production needs,

Speaker 3 (15:52):

You know, it's hard to tell because we're still in the period of reacting to what's what's going on. Certainly there are some aberrations that we're seeing in the way we're doing business and the way we're traveling, the question really becomes, um, what will the longterm picture look like? I think there will be some changes in the way we decide how we want to live, where we want to work, how we want to purchase the goods that we have. I think you'll see some changes in different asset categories, retail, offices, and so forth. I'm confident that we're going to get to a better place. Dennis. I'm confident that through a prices we see the needs and sometimes the crisis reveals shortcomings and things that we should have been paying attention to. So it helps us focus, but I I'm very confident in our country and our citizens, our builders, developers. I see a very bright future.

Speaker 2 (16:43):

No, that's great. I saw this wonderful post on LinkedIn a few, a few days ago, maybe even last week where it was basically, um, someone speaking to a friend and said, I can't wait until things go back to normal with a giant question Mark above his friend's head, then leading. Well, why would we do that? When we can go forward, we've gone through a reset and we have a chance to kind of reevaluate the work life balance, how we do things, why we do things. And to your point, it really kind of recalibrates our behaviors and habits. And I think there's a lot of great things that could come out of that as we architect our future, which the stories are, is we might as well write it.

Speaker 3 (17:15):

Well, we really have to pay attention. There are a lot of voices out there right now, and as we understand better what's happening, we'll see the things that were good changes and, and we'll adopt those things we need to get rid of. We will, but it's, uh, it, it changed and we're always going to have it. I'm confident that we will overcome the challenges that we're facing right now.

Speaker 2 (17:35):

I love the optimism and I'm right there with you. So really want to say thank you for taking the time out of your day and joining our communities, conversations to introduce, you know, the latest and greatest ideas that are circling the nation. Uh, before we part, I would just like to ask

One more thing. Any, any words to live by that you want to share with the community. 

 

Speaker 3

As we sign off a concept that I've always thought was important in our, in our communities. And it's a simple idea that our, our communities should be a blend serving man in nature and change is always going to carry us forward. And if we're responsible in that change, our priorities should be to take care of our fellow man and to take care of our mother earth. I, uh, I live by that creed and, uh, I think that's something we should all consider 

 

Speaker 2

right on. Well, you certainly embraced it with all of your work and you, and you're making it accessible to all of us and for those that live in your community. So really appreciate all the effort you've put into that and taking the time to share your story with us today. Douglas. All right. Thanks.

Speaker 3  (18:34):

Pleasure. 

 

Eric Holt

On behalf of the housing innovation Alliance and the university of Denver, this is dr. Eric Hall. Thank you for being part of our journey. This is where innovation calls home.