NHA’s Regional Development Discussion was held on the morning of March 30th with an expert panel including representatives from The Signorelli Company, Woodforest Development, Costello, Inc., Toll Brothers, and The Howard Hughes Corporation. The room was packed with over 150 individuals all primed and ready to hear about the development and growth occurring in the North Houston region.
The panel began with a question about affordability, a key issue in the market today. Jeff Dewese, Signorelli Company’s Senior Vice President in the Land Division responded that they are combatting the rising costs in the marketing by building on smaller lot sizes which allow companies to provide a quality product at a lower rate. Stephen Barrera, Johnson Development Corporation’s Senior Development Manager, echoed that adding that regulations that limit just how small lots can go make it harder to keep homes in an affordable price range but that they’re getting creative in home designs to combat that issue.
The next topic, transformers, had the room buzzing before our moderator, Dustin O’Neal, President at Costello, Inc., could finish the question. “How has the issue with transformers affected your business plan and what are some strategies taken to hedge the issue?” he asked the panel. Jimmie Jenkins, Vice President of Master Planned Communities at Toll Brothers spoke on the national perspective stating that the situation with transformers and the lack of availability was going to get worse over the next few years. “Everyone is feeling the hurt on this one,” he said as he shared two letters written in November and December of 2022 to both the House and Congress urging them to appropriate $1 billion to $2 billion for implementation of the Defense Protection Act and address the supply chain disturbance for electric distribution transformers. The average cost for transformers has grown along with the amount of time needed to make and deliver one. Jeff Dewese mentioned a candid conversation with an out-of-state company GM who told him it is a workforce issue. Right now they have workers with 20-hour shifts and can’t find people to work the next set of shifts to keep up with demand.
Up next our moderator asked how each developer was prompting new home sales with 90% of existing homeowners locked into sub-5% interest rates. Steve Sams, The Howard Hughes Corporation’s Senior Vice President of MPC Residential stated that the demand to move to the region is spurring a lot of new home sales, along with the increase in a variety of products with high-quality amenities.
“How impactful is regional infrastructure investment on development?” our moderator asked of the group. Each panelist agreed that the proper infrastructure is crucial to keep up with the amount of growth the region is seeing, especially in Montgomery County. Stephen Barrera said one of the factors for their purchase of a new property in Magnolia was the access to the recently built out Aggie Expressway and its connection to 1486. With the North Houston Highway Improvement Project federal pause lifted and the Grand Parkway completion of sections F & G, mobility to the growing North Houston region continues to improve and provide connectivity to previously difficult-to-reach areas.
After a rapid-fire round of questions including their thoughts about a recession, normalizing mortgage rates, and their top amenity requests (booze & trails btw) the panel wrapped up their wonderful discussion with very similar thoughts, which was that the North Houston region is a great place to live, work and play.
Thank you to Zonda’s Director of Business Development, Lana Lawrence for providing our members with a 2023 Market Preview of Houston, The Woodlands & Sugarland. View that info sheet below along with a list of our amazing sponsors! We hope to see you at another NHA event soon.