Price isn’t what the construction industry should be focusing on. Fulton knows what should be.
Dennis Webb has a blunt read on why most of the housing industry hasn’t made the jump from price per square foot to value per square foot. The biggest players don’t have a reason to.
“Public builders don’t have the value. They don’t have the foresight to make that an important part of their thing,” says Webb, vice president of Fulton Homes. He has spent nearly two decades pushing the company toward deeper certification standards in the Phoenix market. “Everything is based on price, and it’s a race to the bottom. That’s why housing is unaffordable right now.”
It’s a strong statement, but Webb backs it with straightforward business logic. Public builders, he argues, are incentivized to protect quarterly earnings, stock performance, and shareholder bonuses, not to spend money educating buyers about energy efficiency or certifications they don’t build to in the first place. “They’re simply going to stay away from those points,” he says. “Everything their marketing is based on is price. And that’s why they build the cheapest possible home.”
Fulton has the freedom to take a different stance in part because of who they answer to. Founded by Ira Fulton in 1975, Fulton Homes remains Arizona’s largest family owned and operated homebuilder. It’s still headquartered in Tempe, still privately held, and still without a board of shareholders to satisfy every quarter. That structure gives Webb room to make long-term certification decisions that a public builder answering to Wall Street might never sign off on.
Fulton Homes has taken a different path, and Webb traces the company’s certification history back to the 2006 housing crash. That’s when Fulton decided to commit to building more energy-efficient homes and started certifying to ENERGY STAR. Indoor AirPlus followed to address indoor air quality directly, then WaterSense, which Webb calls especially important given how much water conservation matters in Arizona.
Most recently, and most significantly, Fulton added the EPA’s Efficient New Homes program, formerly known as Zero Energy Ready. Webb calls it the hardest jump the company has made. “The move to Indoor AirPlus was very easy. WaterSense was very easy. This one was more difficult, more challenging,” he says. It’s also the accomplishment he’s most proud of.
VALUE VAULT
Building with Purpose: Fulton Homes
Fulton Homes stress quality of lifestyle, which is why there are numerous parks and green spaces in a master planned community, along with aquatic centers, recreational areas and other nearby amenities.
Courtesy Fulton Homes
Understanding of the value of energy-saving standard features such as ceiling fans, Wi-Fi thermostats, 16 SEER Carrier air conditioning, and Low-E vinyl windows is increasing, but it’s a long way from complete.
Courtesy Fulton Homes
Builders typically based decisions on price instead of foresight, resulting in a “race to the bottom,” according to Fulton Vice President Dennis Webb.
Courtesy Fulton Homes
Developing consumer understanding about value per square foot has been more successful by showing rather than telling—bringing buyers into a home to see and feel features, not just read about it. Fulton does use green appraisals on its homes, and Webb says energy-efficient homes generally do receive somewhat higher valuations.
Courtesy Fulton Homes
Of the Seven Pillars of Value Per Square Foot that Green Builder Media tracks, Webb says indoor air quality is the one most buyers underestimate until they’re actually living with it. Fulton leaned into that message hard during COVID, when the connection between indoor air and health became much more visible to the average buyer.
“I think the healthiness and the indoor air quality is probably the most underrated thing,” he says. “We saw that during COVID. We would advertise that their homes are healthier because they are, because we build them that way. Most builders don’t build that way. Very few of the publics do.”
That underrating is directly connected to the biggest barrier Fulton runs into, according to Webb’s own survey response: a general lack of consumer understanding about what value per square foot even means. He says the misunderstanding usually shows up as buyers fixating purely on the sticker price without factoring in what a certified, high-performance home is actually worth over the 10, 15 or 20 years they’ll own it, or what it will be worth to the next buyer down the line.
“The value of an energy-efficient and healthy home is far greater than the value of a code-built home,” he says. What’s worked, in his experience, is showing rather than telling, bringing buyers into a home with spray foam insulation and sealed ductwork and letting them feel the difference physically, not just read about it on a spec sheet.
Fulton does use green appraisals on its homes, and Webb says energy-efficient homes generally do receive somewhat higher valuations. But he’s clear the practice hasn’t scaled the way it needs to. “It’s not 100 percent,” he says, “and until this thing is exploded and made very, very aware to the American people, it’s not going to be nearly as effective.”
He puts a good deal of the blame back on the same public builders driving the price-per-square-foot race, arguing they have no incentive to advocate for appraisal reform that would make their own homes look comparatively worse.
Decarbonization and electrification are the pillars where Webb is most skeptical, at least in the near term. Ninety percent of Fulton’s buyers in the Southwest cook with natural gas, and Webb doesn’t think pushing electrification-only homes onto that market makes sense—especially given the brownout and heating failure risks he’s seen play out in colder, fully electrified regions.
“I think we just got to be careful as an industry what we’re wishing for,” he says. His philosophy is to focus effort on where buyers are already receptive, rather than spend limited resources trying to educate people on pillars they don’t yet care about. Indoor air quality is the clearest example.
In terms of how the industry actually makes the full shift to value per square foot, Webb keeps coming back to marketing dollars, or the lack of them. Small and regional builders such as Fulton are the ones most willing to have this conversation, he says, but they don’t have the budgets to broadcast it at scale. The big national and public builders do have that kind of budget, but no incentive to use it this way.
VALUE VAULT
Five Facts About Fulton Homes
An Unexpected Beginning
Founder Ira Fulton bought the original incarnation of Fulton Homes from his nephews, initially intending to phase out the business.
30,000+ Homes
Fulton Homes is now Arizona’s largest family-owned and operated homebuilder, having built more than 30,000 homes statewide.
Built for Community
Fulton Homes communities feature landscaped open spaces, walking trails, playgrounds, ramadas, and onsite recreation.
30% of Profits
Fulton Homes donates 30 percent of its profits to causes supporting education, water safety, and charities important to Arizona families.
Building Standard Alignment
Fulton Homes’ Acclaim master-planned community is the first in the Phoenix area to build all its homes to Zero Energy Ready, ENERGY STAR, Indoor airPLUS, and WaterSense standards.
“The problem we have with builders that are building high-performance homes is there’s no huge players,” Webb says. “If there aren’t huge players, they don’t spend the money on marketing and advertising, and communicating to the public what’s important.”
Until that changes, he expects the shift toward value per square foot to keep happening the way it’s happened so far: slowly, and mostly from the ground up.
Case Study: Fulton Homes
Price isn’t what the construction industry should be focusing on. Fulton knows what should be.
Dennis Webb has a blunt read on why most of the housing industry hasn’t made the jump from price per square foot to value per square foot. The biggest players don’t have a reason to.
“Public builders don’t have the value. They don’t have the foresight to make that an important part of their thing,” says Webb, vice president of Fulton Homes. He has spent nearly two decades pushing the company toward deeper certification standards in the Phoenix market. “Everything is based on price, and it’s a race to the bottom. That’s why housing is unaffordable right now.”
It’s a strong statement, but Webb backs it with straightforward business logic. Public builders, he argues, are incentivized to protect quarterly earnings, stock performance, and shareholder bonuses, not to spend money educating buyers about energy efficiency or certifications they don’t build to in the first place. “They’re simply going to stay away from those points,” he says. “Everything their marketing is based on is price. And that’s why they build the cheapest possible home.”
Fulton has the freedom to take a different stance in part because of who they answer to. Founded by Ira Fulton in 1975, Fulton Homes remains Arizona’s largest family owned and operated homebuilder. It’s still headquartered in Tempe, still privately held, and still without a board of shareholders to satisfy every quarter. That structure gives Webb room to make long-term certification decisions that a public builder answering to Wall Street might never sign off on.
Fulton Homes has taken a different path, and Webb traces the company’s certification history back to the 2006 housing crash. That’s when Fulton decided to commit to building more energy-efficient homes and started certifying to ENERGY STAR. Indoor AirPlus followed to address indoor air quality directly, then WaterSense, which Webb calls especially important given how much water conservation matters in Arizona.
Most recently, and most significantly, Fulton added the EPA’s Efficient New Homes program, formerly known as Zero Energy Ready. Webb calls it the hardest jump the company has made. “The move to Indoor AirPlus was very easy. WaterSense was very easy. This one was more difficult, more challenging,” he says. It’s also the accomplishment he’s most proud of.
VALUE VAULT
Building with Purpose: Fulton Homes
Of the Seven Pillars of Value Per Square Foot that Green Builder Media tracks, Webb says indoor air quality is the one most buyers underestimate until they’re actually living with it. Fulton leaned into that message hard during COVID, when the connection between indoor air and health became much more visible to the average buyer.
“I think the healthiness and the indoor air quality is probably the most underrated thing,” he says. “We saw that during COVID. We would advertise that their homes are healthier because they are, because we build them that way. Most builders don’t build that way. Very few of the publics do.”
That underrating is directly connected to the biggest barrier Fulton runs into, according to Webb’s own survey response: a general lack of consumer understanding about what value per square foot even means. He says the misunderstanding usually shows up as buyers fixating purely on the sticker price without factoring in what a certified, high-performance home is actually worth over the 10, 15 or 20 years they’ll own it, or what it will be worth to the next buyer down the line.
“The value of an energy-efficient and healthy home is far greater than the value of a code-built home,” he says. What’s worked, in his experience, is showing rather than telling, bringing buyers into a home with spray foam insulation and sealed ductwork and letting them feel the difference physically, not just read about it on a spec sheet.
Fulton does use green appraisals on its homes, and Webb says energy-efficient homes generally do receive somewhat higher valuations. But he’s clear the practice hasn’t scaled the way it needs to. “It’s not 100 percent,” he says, “and until this thing is exploded and made very, very aware to the American people, it’s not going to be nearly as effective.”
He puts a good deal of the blame back on the same public builders driving the price-per-square-foot race, arguing they have no incentive to advocate for appraisal reform that would make their own homes look comparatively worse.
Decarbonization and electrification are the pillars where Webb is most skeptical, at least in the near term. Ninety percent of Fulton’s buyers in the Southwest cook with natural gas, and Webb doesn’t think pushing electrification-only homes onto that market makes sense—especially given the brownout and heating failure risks he’s seen play out in colder, fully electrified regions.
“I think we just got to be careful as an industry what we’re wishing for,” he says. His philosophy is to focus effort on where buyers are already receptive, rather than spend limited resources trying to educate people on pillars they don’t yet care about. Indoor air quality is the clearest example.
In terms of how the industry actually makes the full shift to value per square foot, Webb keeps coming back to marketing dollars, or the lack of them. Small and regional builders such as Fulton are the ones most willing to have this conversation, he says, but they don’t have the budgets to broadcast it at scale. The big national and public builders do have that kind of budget, but no incentive to use it this way.
Five Facts About Fulton Homes
“The problem we have with builders that are building high-performance homes is there’s no huge players,” Webb says. “If there aren’t huge players, they don’t spend the money on marketing and advertising, and communicating to the public what’s important.”
Until that changes, he expects the shift toward value per square foot to keep happening the way it’s happened so far: slowly, and mostly from the ground up.
By Amanda Ingle