Building Savvy November 2019

RODDIS LUMBER

BUILDER’S RISK CLAIM? HERE’S WHAT TO KNOW

San Antonio | November 2019

JIM WILLIAMS & GREG HIRSCH FORM A POWERFUL TEAM

A Homebuilding Industry Publication

GIVING BACK AND YOUR TAXES

Building Savvy

Building Savvy

New Showroom Coming 2018

PREMIUM WINDOWS AND DOORS LUMBER | MILLWORK Service. Quality. Value. www.guidoco.com | 210.344.8321 | info@guidoco.com | 8526 Vidor Avenue San Antonio, Texas 78216

Your customer wants a home built for the world of today – and tomorrow.

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Building Savvy

SAVVY’S A-LIST Air Conditioning Classic Services AC 830.358.1499 www.classicairconditioningandheating.com Architectural Photographer Jason Roberts and Associates 210-789-2033 www.jasonroberts.biz Building Materials BMC 512-977-7400 www.buildwithbmc.com Guido Companies 210-344-8321 www.guidoconstruction.com

[from the publisher] Lessons Learned in Times of

Custom Stone & Granite Sublime Custom Stone 210.495.1053 www.sublimecustomstone.com

Flooring Metro Wholesale Flooring 210-655-7050 www.metrofloors-sa.com

Mortgage Colonial National Mortgage 830-714-1236 www.gocolonial.com

Drywall R. Hernandez Drywall 210-733-6437

Garage Doors Hollywood-Crawford 210-494-3434 www.hollywoodcrawford.com

Painting Texas Quality Drywall & Paint 210.560.2698 www.texasqualitypainting.net

Home Warranties Centricity 727.385.7599

Plumbing Diamond Plumbing 210-967-6100 www.dptexas.com

Electrician MSF Electric 210-781-4112 www.msfelectric.com Elevators Home Elevator of Texas 210-340-5702 www.homeelevator.com

StrucSure 210.232.3947 www.strucsure.com Insurance Hotchkiss Insurance 210-581-0420 www.hiallc.com

Fireplace Installations Integrity Fireplace Installations 210-294-1383

Lighting Turney Lighting 210.308.9966 www.turneylighting.com

S M A RT E R P R O C E S SES

SI MP L E R S Y S T EM S FA ST ER CLOSINGS

Lumber and Millwork Roddis Lumber 210-226-1426 www.roddislumber.com Masonry Diamond Masonry 210-473-1264

We lead the industry in change. No matter the location or complexity of your development, we offer customized services to fit your specific needs, including credit reporting, appraisals, property valuation, flood determination, document preparation, maps imaged data, and more.

San Antonio Masonry Tool and Supply 210-695-8222 210-651-7394 www.samasonry.com

You care about your customer, and so do we.

We even work with you to offer property & casualty insurance, home warranties and other convenient products to your buyer.

Radiant Barrier Texas Radiant Barrier 833-343-4328 www.texasradiantbarrier.com Roofer Kendall County Roofing 830-331-2650 www.kendallcountyroofing.com Roofing Supply Beacon Roofing Supply 210-598-5634 www.westendroofing.com Specialty Electronics and Appliances HomeWerks 210-499-5760 www.sanantoniocentralvac.com Specialty Glass and Mirror B&T Glass 210-656-8507 www.btglassandmirror.com Title Company First American Title 817-918-2323 www.firstam.com

DISCLAIMER: Any articles included in this publication and/or opinions ex-

C O N N EC TI O N PAR K 4795 Regent Blvd., Mail Code: 2003, Irving, Texas 75063 (817) 918-2321

pressed therein do not necessarily re ect the views of N2 Publishing but remain solely those of the author(s). The paid advertisements contained within the

Profound Change Are things getting simpler or more complex?

Programmable thermostats, smart doorbells and door locks and lighting control have indeed transitioned from “nice to have” to “expected.” Our Focus Section on Home Technology will get you up to speed…for now. I don’t know how you feel about these things, but I would say that things change about as soon I finally garner an understanding of them. Things like Facebook and Instagram and iPhones also continue to change, it seems, as soon as we think we’ve finally gotten them figured out. Headlines report that construction, more than most any other industry, holds the biggest opportunity for technology growth and innovation. They’re talking about technological innovations already proven to increase safety and reduce costs.

both feet and just being willing to keep at it until you figure it out; and then start this cycle all over again next time it changes.

You’ll enjoy our On The Drawing Board case study which illustrates that YES things do change, but other things always stay the same.

Read all about the success of a millennial home builder and his out-of-the-box thought leadership resulting in neighborhoods that sell! At the same time, we just not forget to slow down and understand where we are and where we are going – or risk learning the lessons, that Paul Evans talks about, the hard way.

I hope that the fall season has been fruitful for you and that you get an opportunity to sit back and evaluate your performance and engagement. Now we’re talking about measuring your success as a builder… and also about getting behind the wheel to test the capabilities of a new car or truck. Boy oh boy. The parallels of the automotive and the homebuilding industry draw make for some interesting observations.

Certainly, advancements have been made in mainstreaming what used to be complex things and improving platforms so that there is less specialization needed to make things work. But we’re still only part of the way there and staying relevant means plunging in with

TERRY KEMMY terry.kemmy@n2pub.com 210.844.1542

[association news]

MEMBERSHIP The Greater San Antonio Builders Association is a not-for-profit trade association established to represent builders, developers, remodelers and affiliated industry members in cooperation to benefit and promote home-ownership.

There are several ways and opportunities to get involved with the association. One of the most important committees GSABA has is the Government Affairs Committee, which works in conjunction with the association staff to address issues that impact the home building industry at the city, county, state, and federal level. One of the primary goals is to protect the industry from onerous regulations that could raise the cost of housing in the Greater San Antonio area.

To learn more about the benefits of membership, or if you need help getting started, contact GSABA Membership Director Feliz Morin at (210) 696-3800.

GSABA members include, but are not limited to: homebuilders, developers, remodelers, architects, suppliers, general contractors, mortgage lenders, interior designers, title companies, banks, service providers, tile and masonry, and many more trade contractors and home-building categories.

Building Savvy magazine are not endorsed or recommended by N2 Publishing or the publisher. Therefore, neither N2 Publishing nor the publisher may be held liable or responsible

©2017 First American Financial Corporation and/or its affiliates. All rights reserved. | NYSE: FAF | 45147780917

for business practices of these companies. NOTE: When community events take place, photographers may be present to take photos for that event and they may be used in this publication.

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Building Savvy

Building Savvy

[industry news]

BUILDER’S RISK CLAIM?

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Builders Risk insurance can be tricky and include wording that can be problematic should a loss occur. Coverage that will properly and thoroughly address any lost profit and additional costs, including “soft costs,� must be carefully considered. Other areas of coverage, which can be added as an endorsement to your policy, should also be evaluated.

Builders Risk policies can be written in either the name of the contractor/builder or owner. In either case, you will want to ensure that all “additional interests,� including lenders (Mortgagee), investors (Loss Payee), etc., are included by endorsement. In other words, if a builder gets a policy in his/her name, you will need to make sure you add the owner as an “additional interest� on the policy and vice versa. This will ensure at the time of the loss that ALL parties with an insurable interest in the project are made whole.

HERE’S WHAT TO KNOW

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After

25 Years in Business • Various Types of Custom Textures

Builders Risk Insurance protects you from damages caused during construction by accidents that were out of your control: fire, wind theft, lightning, hail, explosions, vandalism,

By Colby Duke flood, earthquake, etc. Most BR policies are written on an “all perils� basis — the loss is covered from any causes, unless specifically excluded by the policy. Along with “acts of God,� common examples within the context of construction

Work with an experienced agent to build the right policy, understand your exposures, and be ready should you need to file a BR claim.

contracts also include war, famine and embargoes.

BR claims require swift action to ensure all the right information is collected from the start. You’ll need a detailed description of the incident including time and date. Photographs or video of the damage taken from several angles is also helpful.

Before

First, the cause and extent of the physical damage must be assessed. Sometimes, the claim will necessitate a third-party construction consultant or engineer to estimate the true cost of repair or replacement and the cost of labor for those repairs.Â

Diamond Masonry LLC 939 NW 34th San Antonio,Tx 78228

diamondmasonry1@yahoo.com

Julio (210)630-1171

Diamond Masonry LLC. has a long family history in masonry of more than 28 years experience.

Drywaller For the Custom Builder

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BR policies are unique in their coverage of a wide variety of “soft costs� stemming from a single incident. Most policies include a “delay in opening� endorsement that outlines exactly what soft costs are covered. These might include extra expenses incurred during a delay caused by the physical damage including carrying costs and also business interruption or losses of rent resulting from the delay in completion. A detailed analysis of the pre-loss and post-loss construction schedules may be required to determine the actual soft cost impact of the delay.

738 W Hildebrand Ave. #2 | San Antonio, TX 78212

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Building Savvy

Building Savvy

[focus section]

By Beverly Smirnis

Home Technology – Evolution Brings Simplicity In the past, smart home features set a house apart from the rest. But today, programmable thermostats, smart doorbells and door locks, and lighting control are transitioning from “nice to have” to “expected.”

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Smart home technology has become a lot less overwhelming thanks to products that allow all facets – automation, entertainment, security, and more – to share a single technological platform. Brilliant is one example of an all-in-one that can control Amazon Alexa, Google Assistant, Sonos, Nest, ecobee, Honeywell, Ring, Philips Hue, and WeMo lights, as well as smart plugs and more. It all works seamlessly using voice, touch, or gesture. This type of new technology makes things simpler and less costly while simultaneously freeing up outlets and reducing techno-clutter.

With single-platform control now reaching near perfection, specialty products that address the previous challenges of the latest technology making it to the mainstream market come next. Brinno’s DUO smart peephole camera is a great example, as it addresses home security system issues such as being difficult to install by the average homeowner, being used by renters, being openly visible to burglars, or requiring a monthly fee. The DUO is designed for DIY easy

installation and removal, keeping the front door intact and unaltered. It combines proprietary low-power Wi-Fi technology and reconfigures the door’s standard peephole into a discreet smart home security detection camera, which is unnoticed by outside visitors.

Dual screens and dual storage (on the back of the door and/or transmitted to a smartphone via Wi-Fi) allow residents to easily see who is at their door, whether they are home or away. These images are automatically saved onto an SD card locally in the device.

Front door security is a hot, hot, hot area of home technology. As fingerprints are one aspect that make us unique as human beings, this technology stands to introduce some interesting possibilities in this product category. Your finger can now be the key to your smart home, thanks to a strategic partnership between Crestron and ekey biometric systems GmbH, a leading provider of fingerprint access solutions. The partnership will allow Crestron to leverage biometric processes that add security and make stolen keys and cards, as well as forgotten passwords or codes,

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things of the past. By saving multiple fingerprints of individual users, different functions can be triggered. For example, your right index finger can become the new key for unlocking the front door, and your left index finger can trigger a silent alarm when used under duress. Intelligent software even detects the growth of children’s fingers, minor injuries, and habit changes. Sleek wall-mounted ekey finger scanners integrate seamlessly with Crestron 3-Series® control systems.

Smart lighting is a huge selling point that can now be included in any home without complicated setups, thanks to products like the Noon Lighting System. Noon installs like a light switch but works like a system, rivaling the performance of high-end lighting systems without the complexity or cost.

Patented bulb-detection technology automatically creates beautiful lighting scenes using the fixtures you already have with no need for custom wiring.

Another interesting product from LIFX controls lights via Wi-Fi – no hub or bridge required. LIFX innovations include tap control, infrared for security cameras, high lumen range,

ultra-low energy settings, and more.

LIFX uses Brilliant controls to turn indoor, outdoor, and feature lights on/off, dim lights, change colors, and create scenes using an all-in-one mobile app for iOS and Android.

Smart home neighborhoods definitely present compelling possibilities. While early projects, in most cases, are not entirely practical yet for the marketplace, the knowledge gleaned is a positive step forward. Alabama Power, Alabama’s largest utility, has made headlines with its Smart Neighborhood Builder Program at Reynolds Landing, a 62-home smart neighborhood that is interconnected via smart home technology and powered through a 1-MW microgrid. The homes in the community are 35 percent more energy-efficient than homes built to state building code, according to the firms involved, with smart home features including remote-controlled door locks, lights, and security systems. In exchange for living in such a technologically advanced environment, the homeowners in the community agreed to allow their energy usage data to be harvested and analyzed. The neighbors also participate in focus group discussions with the partners to talk about what’s working and what needs improvement. While new homes sold out quickly due to the marketing of the smart home community, developers say their main objective is to use this project to understand what load shapes and customer interactions will be like 20 years from now.

While developers explore the possibilities of smart home neighborhoods, builders can no longer contend that including some smart home capabilities is impractical or reserved purely for higher-priced homes. Likewise, remodelers seeking the best and least

In contrast to exposed smart doorbells, the theft-proof indoor Brinno DUO camera produces a clear picture of outside visitors via a built-in 2.7-inch LCD screen, With one touch, Noon’s modern switches collaboratively

transforming the hard-to-see peephole into clear head-to-

transform a room’s mood or accent an activity.

shoulder images.

It’s now impossible to lock yourself out of your home, as the key is always, literally, on hand. Your fingerprint is your access key.

expensive way to upgrade a home without a full renovation also benefit from current advancements. In considering what projects will include, we must keep in mind that the goal is to make homeowners’ lives easier; thus, it will be important to know your buyer and their specific expectations to best determine which products and platforms make sense right now and which to focus on in the future.

Chances are, anything you think might be possible next year probably will be possible even sooner. And some things we never thought of will be too!

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Beverly Smirnis is the co-founder of Building Savvy magazine and publishes its flagship Dallas/Fort Worth edition. She and her business partner and husband, Steve Smirnis, have served as judges for the International Builders’ Show Best of IBS Awards, the Greater Houston Builders Association PRISM Awards, the Greater Orlando Builders Association Parade of Homes, and the Building Industry Association of Okaloosa-Walton Counties’ Parade of Homes.

Building Savvy

[savvy builder]

Building Savvy

&

By Terry Kemmy

Builders

JIM WILLIAMS GREG HIRSCH Make Their Customers Proud Home Owners

In 2001, Jim Williams decided to break off from a former building partner and start his own residential construction enterprise. One of the senior superintendents, Greg Hirsch, got wind of this and quickly reached out.

“I was always very impressed with Greg… his thoroughness and professionalism, and so I welcomed him on and we became partners,” Williams said.

It probably didn’t hurt that Greg was also an Aggie.

So 18 years ago Jim and Greg started building custom homes together. Their clients all have one thing in common, they want something they haven’t found in an existing or conventional home. They all want a home to not only be unique, but to intimately reflect their lifestyles and personal passions.

“People who choose to build a custom home are a different breed, they’re tough to define by income, occupation or even personality,” adds Williams. “We want their home to make people feel a certain way, as if no other home could fit them quite as well. To reach this goal, we work closely with homeowners, taking into account their lifestyles, tastes, and needs every step of the way from design to completion.”

Jim Williams is a graduate of Texas A&M University, and has over 25 years’ experience building custom homes. He is a former Army Helicopter Pilot who used and still uses leadership skills learned 10

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as a pilot in Vietnam to start up and manage Williams-Hirsch. After his military service, Jim started a furniture design and manufacturing company, then bought a cabinet manufacturing company and finally transitioned into custom home building. He is a Certified Graduate Builder, Graduate Master Builder, Certified Green Builder, Lead Safe Renovator, BPI Building & Envelope Analyst, and RESNET Rater. Jim recently celebrated his 50th anniversary, and he and his wife have 3 children and 7 grandchildren.

“I grew up on a farm in San Antonio, and my dad, brother, and I were always building something. My dad actually built the home I grew up in…by himself with nothing but hand tools, no power tools. I’m still amazed at how he did

Building Savvy

that. After 70 plus years, the home is still standing and in great shape.”

Greg Hirsch is also a graduate of Texas A&M University and has over 25 years’ experience in Project Management, Quality Assurance and Customer Service. With his experience as a site supervisor, Greg excels in communication, organizational, and interpersonal skills. Greg is experienced with architectural design and is an active member of several building associations including GSABA, TAB, NAHB, TRCC, and BSAG. Greg is married with two children.

“Even as a kid, I always had an interest in the design and construction of buildings and especially homes,” he said. “I was fortunate to have had a great high school architecture program and mentor and eventually received a degree in architecture from Texas A & M University. My dream was to design and build homes. After working for a few other builders, I was blessed to be able to partner with Jim, where we have become a design-build company.

Since Williams-Hirsch is a design build firm they work with clients from design to completion. They have several meetings with their clients throughout the entire process to accurately interpret the style, size and finish of their home.

“The planning stage may take a while, but we feel that it is worth the time spent to ensure that our clients are thoroughly pleased with the architectural plans and concepts,” adds Williams. “And as we are designing the home, we are always considering and discussing the price. We really get to know each other during this phase, and this sets the stage for the actual building process.”

Jim and Greg build a lot of craftsman/ cottage style homes and often include actual antiques, such as antique front doors, newel posts, stained-glass windows, and even some lighting fixtures to tie the new home into the past. And, although their homes may appear to be from a different era, they are equipped with the most cutting edge energy-efficient technology.

“We are seeing an influx of buyers interested in smaller homes on smaller lots, requiring less maintenance,” says Greg, “however, they still want high quality finishes and timeless design.

More homebuyers today are also embracing the mixed-use neighborhood model, where residential and commercial properties comingle. Busy families are looking to walk to restaurants and shops close by.”

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Building Savvy

Williams-Hirsch is a long-time member of the Greater San Antonio Builders Association (GSABA), Custom Builders USA, Texas Custom Builders Guild, Build San Antonio Green and the New Braunfels Chamber of Commerce. They’ve received numerous Smart Energy Builder awards, SA Tomorrow Sustainability awards, the 2019 Best of New Braunfels Home Builder Award, and numerous other accolades.

They have several long-standing relationships with their subs and suppliers, with many of them like an extended family. Here’s what a few of them had to say: “We really work well together. They have a great understanding and respect for our process. And we get challenged in a good way to create finishes of better quality than average on tighter budgets.”

Danny Amaya, Amaya Custom Cabinets

“They are both great, down to earth. They’re a smaller builder, more hands-on…which is what a lot of people really like.” David Rowe, Factory Builder Stores

“Greg is very patient, personable and so very easy to work with. They’re understanding when products or materials sometimes get delayed.” Caryn Musick, Moore Supply “I’ve done several projects with Williams-Hirsch.

They’re very creative; have a high level of integrity and they’re very financially secure.” Warren McLendon, Jefferson Bank “When you keep seeing their clients come in at closing - happy and stress-free - you KNOW they are delivering what they promise. They are very meticulous and awesome to work with.” Brenda Arrazate, Stewart Title.

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Building Savvy

Building Savvy

[savvy partner profile]

By Trevor Whitney

“We have the ability to make our own decisions and move to different product lines because we are small and family-owned,” says Bob Weaver, the 4th generation of family leadership at Roddis and current Vice President.

“It’s a more personalized experience for the builders we work with. They know who they are talking to when they call us”.

Roddis focuses on providing interior and exterior finish out, including door packages, built-in shelving, closet installations, stairs, railing and more.

The company currently partners with high-end custom builders such as Garner Homes, Dale Sauer Homes, and Trinity Custom Homes.

It all started with a stranded rail car and an idea.

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In 1920’s Kansas City, Roddis Lumber & Veneer Company was created in a moment of opportunity. A local railyard in Kansas City had gone bankrupt, stranding a shipment of plywood. Roddis Lumber distribution was born when company pioneers convinced the supplier to let them sell the stranded plywood on consignment. The partnership was a success and proved to be a profitable, long-standing relationship.

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By the 1960s, Roddis has grown to several branches all over the country. In the latter part of the decade, family ownership of Roddis sold off various branches in multiple states to buy out shares of the company from Weyerhauser in order to focus on one distribution area – south-central Texas. Roddis has been serving the San Antonio area ever since with both wholesale hardwood and plywood distribution, as well as doormill manufacturing services. In fact, Roddis currently supplies an area that stretches from Temple to the Rio Grande Valley.

“We are very lucky in our region to have a strong demand for custom home building,” Weaver explains. As homebuilding expands in the Texas Hill Country, Roddis is positioned to be a key provider of some of the features that today’s buyer demands.

When asked about trends in the market, Weaver was very direct about the economic impact of the current trade war and tariffs that the United States has placed on many building materials.

“Without a doubt, tariffs have impacted our business dramatically. From 2017 to 2018, prices for plywood rose 30-40%,” Weaver explains.

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Roddis sources about 60% of their material domestically, but has seen its foreign grown supply shift from traditional markets like China, to emerging markets like Vietnam. “Most imports are coming from Asia. Currently, poplar and soft maple are in demand because they have a less prominent grain pattern [which leads to a finer finish when painted]. I’d estimate that 80% of interior products being installed today are painted either white or grey”. Interior design trends show no sign of departing from these painted surface finishes.

Custom home builders today have a lot of options when it comes to finding vendors of various products, but using a locally-owned and locally-focused company can lead to a better building process. Roddis Lumber is anchored in our community and provides finish out options at all price levels, which gives your customers more options to choose from. This helps them connect with the building process and puts them in the driver’s seat – which is a key part of owning the customer experience. Give Roddis Lumber a call today and see the difference.

Building Savvy

Building Savvy

[sales savvy] When I counted the work he had going for 2019, I tallied that he will have built 18 homes and completed 15 remodels by year’s end.

Now, he told me he was busy, but I truly don’t think he knew how busy he was. He kept selling work, not knowing what he was really signing up for. So, was he too busy for his troops and, because of that, were things falling through the cracks? Well, when I looked back over the last two days, I thought his procedures were great and saw no issues. Then, I looked at the way the builder and his direct team were treating their customers. That, too, was just like it had been in the past.

When Is Busy

By Paul Evans

Too Busy?

Then, it hit both of us: The subs and their treatment, and, in turn, how they were treating end customers had changed! I spent the last half of that third day driving to those jobs and talking to the subs; sure enough, we had hit on an issue. The subs said they were pulled from job to job and were not able to, in their minds, do as good a job as they had in the past nor be mindful of all the details for which the builder was known. They felt this was reflected in the customers’ satisfaction with the work. In truth, the customers didn’t really know any better; they thought this was just how the builder normally operated. But they also thought the homes were just average and didn’t want to refer another customer.

I got a call from a customer in California who builds between five and 10 houses per year and does an additional five to seven remodels. The remodels are only done for customers he built a new house for previously. He asked me whether I could carve out some time to see him. He told me he felt he was not getting the referrals he was used to, and he couldn’t figure out why. He wanted me to look over his organization, to have another pair of eyes to see what he was not seeing. I told him I would make a trip to spend a day or two with him and his group.

So, our builder needed to do some soul searching. Should he start passing up jobs? Add staff and subcontractors? I told him, first, he needed to slow down and take care of what he had sold and get referrals from those jobs first. We worked out a plan of attack. He had forgotten to do the last step in Sales 101: asking the client if they really liked their home and whether they would please tell 10 friends about it. If he had asked this question consistently, he would have found out sooner that the end customer was not overjoyed. The builder had good but not great customer service.

So, the process didn’t result in loyal customers who were willing to tell their friends about the process and this builder’s business. If I had to bet, I’d guess he still hasn’t seen the end of this problem because his remodel business down the road will suffer.

His team consists of one admin, who pays the bills, and two superintendents, one for new construction and one for remodels.

He uses two real estate agents for sales and handles the referrals himself. He subs out all his work, mainly to the same crews he has used for many years. I spent two full days shadowing the team, including the admin and superintendents, the real estate agents, and the builder himself, to see how I could help. I even spent a bit of time with three sets of homeowners. Two of them were customers he had not worked with before in the process of building new homes. The other was remodeling the home the builder had built from scratch for them seven years earlier. At first, I didn’t see anything I could help him with because from what I could tell, he was working as I have known him to work for the last 10 years or so since I met him. Then, two specific things jumped out at me.

Lesson learned: Understand where you are now, where you are going, and where you want to be. Make sure your standards are not compromised for the sake of taking on another job. The bar you set for yourself needs to stay at least level or be raised higher if you want to continue getting work in the future. So, stop for a minute and ask yourself, “How busy is too busy?”

Paul Evans is a graduate of Lamar University’s School of Engineering and the national VP of millwork for BMC. His book, Life’s Lost Art, offers practical advice about how to turn satisfied customers into loyal customers by listening and responding to their needs. For more than 10 years, he has been an instructor for the NAHB, University of Housing, and the Home Builders Institute, teaching customer service, negotiating, and sales.

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Serving new residential home builders in San Antonio and the surrounding area since 1999!

Diamond Plumbing 6055 Woodlake Center San Antonio, TX 78244 Office: 210-967-6100 info@dptexas.com www.DPTexas.com License #: MPL-36865

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Building Savvy

[savvy finance]

GIVING BACK YOUR TAXES AND

By Steven Bankler, CPA

‘Tis the season for giving, but consider how recent tax changes affect your charitable contributions before you open your wallet. Whether your donations result in lower taxes depends on highly individualized factors. Seemingly huge tax breaks may not pan out for even generous givers who haven’t rethought their tax strategies.

Those strategies now include tools like donor-advised funds.

Now that the standard tax deduction is set at $24,000 for married couples filing jointly ($12,000 for single filers), it’s harder than ever for the average American to be eligible for extra charitable contribution deductions. The $10,000 limit on deductions for state and local taxes (including property tax and mortgage interest) doesn’t help. In fact, the National Council of Nonprofits estimates that 87% of taxpayers no longer have a compelling reason to itemize their deductions and, thus, miss out on specific deductions when they donate.

So how does it all work?

Building Savvy

Obtain the right paperwork. Contributions of $250 or more in cash and $500 or more in noncash assets require what the IRS calls a “contemporaneous written acknowledgment” from the donee organization with particular information included. Simply receiving a blank pledge card to fill out won’t cut it.

Be careful about gaining other benefits. If you receive a benefit in return for your donation such as merchandise, tickets to a ball game, or other goods and services, then you can deduct only the amount that exceeds the fair market value of the benefit received.

Besides DAFs, there are dozens of ways to donate to charities you may not have considered before.

If you’re over age 70½, for instance, you can donate up to $100,000 from your IRA as part of your Required Minimum Distribution. If you’ve had a windfall year, perhaps through business or real estate success, those gains may give you a reason beyond overcoming your standard deduction threshold to bump up charitable giving before the end of the year. Talk to a tax professional about your options.

Steven Bankler has more than 40 years of experience in the accounting industry. Steven’s expertise lies in consulting, planning, tax, and asset protection as well as exit strategy services for closely held businesses. He also provides litigation support (both as a testifying expert witness and a consulting expert), business negotiations and estate planning. For past Building Savvy tax tips and to learn more about Steven Bankler, CPA, Ltd., visit www.bankler.com

If your giving puts you just under the threshold, certain strategies can help. One of the most popular is called “bunching.” This strategy centers on skipping a year or two of giving to “save up” enough contributions to push past the standard deduction threshold in a single year.

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As you can imagine, bunching isn’t ideal for donation-based organizations that rely on regular, predictable giving. Options like donor-advised funds (DAFs) provide a balance. The growing trend can be described as a personal charitable savings account. Funds can be grouped into one donation in one single year and then potentially grow in value tax-free while being distributed over time to the charitable organization administering it.

Another interesting aspect of DAFs? They can be used to donate more than cash. Many individuals donate closely held stock, real estate, and personal property like jewelry and artwork through DAFs.

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However you decide to donate, avoid common pitfalls and: Give to a DAF or 501(c)3 in good standing. Only donations given to organizations that meet this requirement qualify for tax deductions. The IRS has a new Tax-Exempt Organization Search (TEOS) tool available online to check the status of nonprofits. Crowdfunding sites like GoFundMe and Kickstarter don’t qualify, and any money given to campaigns through those types of sites are not tax-deductible.

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Building Savvy

[on the drawing board]

By Rick Harrison, Rick Harrison Site Design Studio

Case Study of a Millennial Home Builder Building Millennial Neighborhoods My generation (us “hippies”) was never going to be like the suburban parents who raised us. Until the Detroit Riot of 1967, I was raised in a 1,100-square-foot, three-bedroom brick home built by my grandfather on Dartmouth Street in Oak Park, Michigan, with no garage. That home, as well as the neighbors’, has not changed since.

After the riots, we moved to 7320 Muerdale St. in West Bloomfield.

It was a 1,600-square-foot home with a two-car garage on 1.2 acres. Most of our neighbors also fled Oak Park to much larger homes with multiple-car garages on huge lots in the western suburbs. I went to Walled Lake Western High School, where many of my contemporaries spent their school days in a drunken or druginduced stupor. I was fortunate, as my after-school job was working as a draftsman/designer for Don C. Geake & Associates, the leading community planning firm of the region. At the time, I fearfully wondered, “How is my generation ever going to run this nation?”

No way us “hippies” were ever going to be like our parents, right?

Well, as time passed, we became an exaggeration of our parents – wanting bigger homes, more cars, and just more stuff. Somehow, my generation ran businesses and expanded the nation. Our offspring continued the trend of homeownership and were the ones most affected by the market crash. Their offspring, the millennials, suffered through the recession and are additionally burdened by today’s absurd college debt.

During the past 52 years I’ve been in the planning business, I’ve learned the following truths.

• There will always be urban planners and architects who make it their life’s goal to destroy the suburbs and who look to dense

cities, mass transit, and social engineering to save the world.

• There will always be a young generation seeking to live in gentrified redeveloped areas until they marry and have children, and then it’s off to the suburbs to have a yard for the kids to play • Suburban growth will remain the major source of new housing.

A decade ago, when the housing market crashed, urbanists rejoiced over the “death to the suburbs.” We were all going to live in heavily populated areas and replace our cars with bicycles and buses. In particular, the millennial generation was to lead that charge.

But alas, as they matured and worked hard for a living, they, too, desired a home to call their own.

A Millennial Home Builder Rhodes Enterprises Inc., a real estate development company, retained us to design The Villas on Freddy in McAllen, Texas, to attract millennials.

Nick Rhodes, president/CEO of Rhodes Enterprises Inc., is a millennial himself at 25 years old.

Nick Rhodes, He has been intimately involved with his family’s Rhodes development and home-building business from Enterprises, Inc. the age of 13, working summers in the business and demanding reports from his dad throughout high school. At 25, he has 12 years of experience and may be one of the brightest young minds in the home-building business.

Nick received his undergraduate degree in economics from Southern Methodist University in three-and-a-half years and immediately moved to McAllen to implement his aggressive growth plan for Rhodes’ Esperanza Homes division, taking the helm from his father, Mike, at age 23. At that time, both Mike and Nick took the LandMentor training to learn the technology and design methods introduced in the book Prefurbia, which was to be the foundation of many of their neighborhoods. In just three years, Nick has grown Rhodes’ Esperanza Homes division from 40 homes a year to the 270 homes he will build in 2019. He projects to build more than 400 annually by 2020.

Conventional Thinking Wasn’t Working When Nick commissioned our firm in March 2019, we discussed the engineer’s layout that shoehorned 200 units on the 26.7-acre site using an alley/street urbanist grid. This would have resulted in 6,691 lineal feet of 16’ wide alleys (2.47 acres paved) and 5,478 linear feet of 32’ wide street (4.22 acres paved). After deleting the right-of-way area, the 200 lots would have been an average of 3,900 square feet per lot. The larger problem was that between the street and alley right-of-way, the typical lot depth (without any setbacks) would be just 83’ deep! Clearly, lot depth was going to be an issue, especially with the desirability (market advantage) of a two-car garage and required setbacks.

Creating a New Housing Type Efficiency, pedestrian connectivity, showcasing along arterial roads, character, convenience, privacy, views, and amenities in social 22

Building Savvy spaces were a priority while keeping a competitive price point. Previously, Nick had commissioned us to redesign the future phases of Retama Village at Bentsen Palm in Mission, Texas, which offered single-family living for active adults. Villas (coined “BayHomes” in Prefurbia) were designed with considerable staggering to provide panoramic views of common open space from within living spaces in the homes. We were to apply the design advantages of Retama Village to the millennial neighborhood, too.

The Villas on Freddy’s target market is both millennials and baby boomers. Young professionals, 25-40, with no kids (yet!) who desire a low-maintenance, singlefamily lifestyle with amenities are the primary target. The 55+ buyer whose kids have moved out but who want to stay in McAllen with a low-maintenance, attractive, and energy-efficient home is a secondary target.

Working with Nick, we developed a new housing model that allowed higher density without sacrificing architectural character, pedestrian connectivity and safety, spaciousness, and vehicular convenience, while also not compromising the home footprint. All homes would have a zero-lot-line, allowing the 10 feet between homes to be fully used by residents.

In addition, we planned the homes to have an internal courtyard floor plan. The typical architecture in McAllen, Texas, has a Spanish theme. Nick chose to shake up the local market with exciting contemporary designs, including elements of the modern farmhouse look. This unique blend is timeless, not trendy, and allows for a significant front porch.

A problem with alley-based housing is that one side is unappealing (alley) while showcasing homefronts along the street and sidewalks. Typically, as density increases, greenspace is sacrificed – our goal, however, was to increase space. Along the north and east perimeters of the site, we backed homes onto the boundary line, meaning houses would be instead served by garages at the front.

Those homes were made wider to add some curb presence. We also added more common space, which did sacrifice some density (about eight homes, bringing the total to 192).

Detached Townhomes A major problem with using any form of single-family zoning is that planning commissioners and council members think of singlefamily lots as something along wide public streets with deeper setbacks and somewhat low density. If a city planning commission sees the neighborhood as bringing single-family living to those otherwise forced into attached housing, they are likely to embrace the detached alternative. When proposing “BayHomes” (detached townhome) units, we used existing townhome or multifamily regulations, allowing us to use private lanes. It also provided a bit more freedom in home placement, which was critical if we wanted

panoramic views of the commons from within living spaces. Other than the wider homes along the north and east borders, all homes were designed to expand the perception of space, both inside and out. All the detached townhomes have a two-car garage. Some of the driveways are deep enough to park four cars. Furthermore, we provided an additional 130 guest parking spaces.

Instead of a traditional alley, which, in Texas, is typically 10 to 16 feet wide, we proposed to use the same private lane standards as a typical townhome development. We ended up with .86 acres of total street — 80 percent less than the 2.84 acres of 30’-wide “alley” paving. The total street and alley paving plummeted to 45 percent less than the 6.69 acres on the original plan.

There were no major material changes between the initial submittal and the finished plan. It was quickly embraced by most city staff and commissioners, in part due to the site and architectural design, and in part due to the masterful job Nick did in interacting with the city and communicating the benefits of the neighborhood, as well as the outstanding reputation Rhodes has in the Rio Grande Valley.

Breaking Ground The community will have a gym, pool, pickleball courts, dog park, playground, gate, and many parks and greenspaces with miles of trails throughout its 26.7 acres. Every home will be spray-foamed and is expected to average 40 percent less in utility bills than a standard home. Every home will also come smart-home-enabled.

There are six floor plans ranging from 1,300 square feet to 2,200 square feet with one- and two-story options. Prices will range from $179,900 to the $230s. First conceived in March of 2019, the Villas on Freddy broke ground at the end of summer 2019. All homes will be for sale, but investors can buy them to rent. Nick anticipates most will be for sale and owner-occupied. Millennials will like the idea that they can live there and rent out later if they want to move up in a few years, Nick says.

The Villas on Freddy represent a new era in home-building with greater attention to design detail, offering a product to consumers that renders the cookie-cutter model most others in McAllen produce obsolete. Nick Rhodes goes that extra step to make sure every home setting is special, with greater attention to detail than his competition – all to make sure the home is as special as the residents themselves. Competition? There is no similar type of housing offering the design, function, pricing, and features, but to put the Villas on Freddy in perspective, the 1,800-square-feet “garden homes” across the street start at $280K. To learn more about the author, visit rhsdplanning.com and neighbor hoodinnovations.com. Contact Rick Harrison directly at 612-325-1950.

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Building Savvy

Building Savvy

[savvy trucks & toys]

By Beverly & Steve Smirnis

Performance & Engagement:

How You Measure Your Success as a Builder and What You Expect of Your Vehicle We had the pleasure of putting an Audi S5 four-door Sportback to the test on a trip to Colorado. The S5 is the highperformance variant of the A5. Allwheel drive is standard, as is an eight-speed automatic transmission. Freshly redesigned, the S5 lines up against the four-door coupes, including the BMW 4 Series and Mercedes-Benz C-Class.

W

Powered by a turbocharged 3.0-liter V6 (349 hp, 369 lb-ft of torque), it delivered everything one would expect of a German automaker and more. The all-wheel-drive system, delivering power to specific wheels for sure-footed handling, made it a blast to drive on twisty mountain roads, where it showed off on sharp turns. Yet, unlike a vehicle built purely for sports driving, the S5 also delivered on comfort and being well-mannered on the streets of Aspen and Vail. Inside, the cabin is aptly described as “understated luxury,” with high quality materials and a smart overall layout. The infotainment system keeps the need for buttons to a minimum for a clean, modern design. Quilted diamond stitching on the sports seats is a nice touch.

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The range-topping Prestige trim included the Audi virtual cockpit with MMI touch navigation and fullcolor head-up display, interior LED lighting package, top-view camera system, and a 19-speaker Bang & Olufsen audio system with 3D sound. It also sported adaptive cruise control and lane keeping assist.

Apple CarPlay and Android Auto are standard equipment on all S5 models. The upper-level trim also makes the S5 eligible for the S Sport Package with sport-tuned adaptive suspension and an upgraded rear differential.

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Audi has also released all-new 2020 S6 and S7 Sportback models with twin-turbocharged 2.9-liter V6 TFSI engines, delivering 444 hp and 443 lb-ft of torque. The 2020 S models feature a 48V electric compressor that enables low-end torque in addition to instant performance.

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Beverly and Steve Smirnis are members of the Texas Auto Writers Association and the Texas Motor Press Association, reviewing vehicles and casting their votes at driving events where the Truck of Texas, Car of Texas, and Off-Road Truck of Texas are some of the titles awarded. Follow their automotive blog on TheSavvyList.com/The-Savvy-Driver.

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Building Savvy

Building Savvy

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TX_San Antonio Building Savvy

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