Doug Tarry, president of Canadian net zero home builder Doug Tarry Homes, joins host Sara Gutterman to argue that homes should be measured by comfort, health, durability and lived experience rather than price per square foot. He explains how a values-driven approach to building is also a stronger business proposition.
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Sara Gutterman: 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, Sara Gutman, CEO of Green Builder Media and 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.
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Sara Gutterman: 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.
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Sara Gutterman: 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.
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Doug Tarry: Thank you so much for inviting me. I'm really excited to be here today.
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Sara Gutterman: Wonderful. We're so happy to have you. Now you 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?
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Doug Tarry: 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 was 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 high performance, safe and healthy homes.
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Doug Tarry: We have to be able to deliver something that houses the under house and make sure that we're helping to improve society by what we the decisions we make.
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Sara Gutterman: 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 financial lies to commoditized? And if so, what do you think we've lost culturally? Or even, dare I say, spiritually in the process?
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Doug Tarry: 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 promise that maybe we could treat them a little bit more humanely as because we need to eat, right?
00:03:06:29 - 00:03:34:28
Doug Tarry: No different than the builders got to make a profit. But can we do 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, I think we need to be more aware that what we provide is meeting basic emotional needs for our customer.
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Sara Gutterman: It's interesting because I hear the term warehousing humans with housing stock that is designed and constructed, constructed to just extract every dollar out of every square foot that is constructed 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 Homes is unusually values driven in an industry that's often dominated by cost cutting and short term thinking.
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Sara Gutterman: 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?
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Doug Tarry: It's a family dynamic that we apply to the company, but it's from our dad. As kids, he used to take a sewing 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.
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Doug Tarry: And it was. Guys always liked 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, we take a break and he's like, no sweat.
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Doug Tarry: 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 flight of the paddle was a stick of Juicy Fruit gum.
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Doug Tarry: And that was more for shut 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. The City of London has an issue which is adjoining community nearby. They had a fairly significant problem with homeless. And they basically built like the slums out in the middle of nowhere.
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Doug Tarry: Just get them on. It's like a penitentiary. Here in Saint Thomas, we've been working with Mayor Preston and the council for years, but we're doing a project with the YWCA. It is fantastic looking product. It is Tiny Homes. 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.
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Doug Tarry: It would 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. 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 to work and live and get their groceries.
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Doug Tarry: 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 integrate it into our community. Then they can have a better life. Which one should we do?
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Sara Gutterman: I love that. In fact, we've recently done some math on housing here in the US, and this may or may not be applicable to Canada. I suspect it is, but we've done the math where if a builder takes an acre of land and and builds four homes on that, that are, you know, like maybe say 2500ft² and they end up shooting those houses end up being priced at, let's say, the national median average here in the US, which is about 430,000.
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Sara Gutterman: 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. And whereas if they take that, if the builder takes that same acre and build six houses that are maybe 1300 or 1500 square feet, and these are not similar to your tiny homes in terms of size, a little bit bigger, certainly, but, you know, very feasible and actually more desirable size of a house right now.
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Sara Gutterman: But they build that house to the amount that most US families can qualify for, which is not $430,000. It's closer to 300,250 to 350,000. 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 100 and $80 per square foot versus $250 per square foot, you can add a heat pump, ATC systems and water heaters, and higher quality, healthier materials.
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Sara Gutterman: So, you know, the math works out in that sense in a similar way that you're pointing to with these tiny homes where they might not be as big, but they provide a better lived experience. So I love to hear that you're doing that.
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Doug Tarry: Well, I actually write about this, and it's a very closing thinking in the book Final Thoughts, and it starts off referencing Haley Selassie speech in 1963 as United Nations War, which Bob Marley turned into a song. Right. And I finished off the book by asking, you know, our choice is One Lover War, and I choose one love, right?
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Doug Tarry: But I talk about, do we really need 2800ft² of 1400 square feet? We'll do right. And I think that 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 to have problems. People are going to migrate to where they can be safe, right?
00:09:15:12 - 00:09:39:15
Doug Tarry: 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.
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Doug Tarry: You know, it's they're becoming catchphrases. But there's actually meaning behind this. And I think sometimes 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, but can I not just do that as well as provide this service to my consumers?
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Doug Tarry: Our goal is to try and build that net zero home at the same cost to the other guys. Building code.
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Sara Gutterman: So I have two questions for you based on what you just said, which I agree with everything you said and I love it. The first is philosophical. The one is more about storytelling. 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?
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Doug Tarry: I think it's a fundamental requirement if for. I don't know if you remember this movie. It's a major guide in my life. It's a Wonderful Life. Which story or training? You know, Bailey Park as opposed to Pottersville. Right. There's lots of people out there that could create Porterville, and it's not helping to move forward. Your goal is to try and create Bailey Park.
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Doug Tarry: 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 a psychiatric hospital that closed and those people being repatriated to their own communities.
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Doug Tarry: 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 Power Co, which will be the fourth largest factory in the world if they'd come to our town and saw slums in the downtown and all this homelessness.
00:11:39:12 - 00:11:49:12
Doug Tarry: 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. We're just factory in the world. We would not have gotten that if we didn't have a better plan.
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Sara Gutterman: 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 in terms of just focusing on that bottom line of profitability and the monetization and commodification of housing?
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Doug Tarry: I have to say that some of it would be risk of both, 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.
00:12:34:12 - 00:12:57:29
Doug Tarry: We believe that profit is made because we do a better value proposition to our consumer, and they choose us because they're getting greater value, they're being better recognized. We're looking at their emotional well-being. I think that what's happening is, is that we've kind of lost the hands on the tools. I created this, I'm thinking about what I've created lasting 100 years.
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Doug Tarry: 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 a benefit back to society that I can make a profit from by doing the right thing?
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Sara Gutterman: Yes. Like you, I run a business and profitability is of paramount importance. I had the good fortune before I co-founded Green Builder Media 21 years ago. Now I was in venture capital and I was with a mid-sized fund in Boulder, Colorado, and we invested at that time mostly in internet infrastructure, one of the first storage over IP companies, which basically led to the cloud, one of the first virtual private network companies.
00:13:45:20 - 00:14:23:17
Sara Gutterman: 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 the Whole Foods. And I learned there that 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, you know, environmental stewardship, you know, social responsibility, these other things, whatever you want to call them today, it's called resiliency and risk reduction and community investment or whatever those things are called.
00:14:23:17 - 00:14:46:02
Sara Gutterman: I don't really care what you want to call it, but that you actually engender more loyalty from your employees, from your team, from your customers. You reduce risk in all these things. So I think you're really Doug. Terry Holmes is a great example of that, that set of blended values in a way that's helped your, your, your business benefit.
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Sara Gutterman: Now you tell a story I love this, I've heard this. You tell a story where you know, as you are walking home buyers through your home, 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.
00:15:05:08 - 00:15:21:23
Doug Tarry: Well, to be honest with you, I probably the worst one to ask about what the price for the home is. I tracked the sales reports for sure, but 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.
00:15:21:23 - 00:15:39:12
Doug Tarry: 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 ducks 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?
00:15:39:13 - 00:15:55:26
Doug Tarry: 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 more resistant. Doesn't have radon.
00:15:55:27 - 00:16:18:06
Doug Tarry: Is that pretty good? Oh yes, I like that. Right. So we really like to sell on emotion how it helps family to feel connected to the home. Greater comfort creator feeling of well-being. One of the absolute best examples that 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.
00:16:18:06 - 00:16:35:19
Doug Tarry: The first was a triage mission, and then we did three build missions, and this was all in all 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 going to note that last a little bit to finish. And then it would rain and it would really rain.
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Doug Tarry: 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.
00:16:58:10 - 00:17:18:00
Doug Tarry: 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?
00:17:18:02 - 00:17:36:23
Sara Gutterman: Yeah, that's a nice dovetail into my next question. And I'm going to give some context for this. So my favorite children's book is written by Antoine de son called the The Little Prince. I don't know if you've ever read it, but it's a story about this little boy, and he goes on his journey through the universe, and he goes to different planets.
00:17:36:23 - 00:17:57:15
Sara Gutterman: And on one very small planet, he meets a fox. And the fox asked the little boy to tame him. And the little boy is 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.
00:17:57:15 - 00:18:28:05
Sara Gutterman: 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 truth that modern culture often overlooked. And my favorite line in the book is the fox reminds the little boy that what is essential is invisible to the eye.
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Sara Gutterman: So when you think about housing and, you know, kind of the product that you're delivering, what are those invisible things that never show up in spreadsheets, appraisals, or price per square foot that you believe matter most to people?
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Doug Tarry: Well, I do this with my new cat, Roy, who's moody 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. But we do that on the, you know, the reclining love seat.
00:19:02:00 - 00:19:24:07
Doug Tarry: You know, he sits with me. Where am I going with this? People want to do that. They want to have that connectivity, connectivity. So it's got nothing to do with, you know, how much the house cost. But it's again, how does it make them feel? Do they feel like they can spread out on the couch and their cats going to play with them, and then they're going to feel comfort and joy right in their home.
00:19:24:09 - 00:19:46:29
Doug Tarry: 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 5 to 10% of the customers that will respond to that, because that's logic logics way later in the buying proposition.
00:19:47:00 - 00:20:04:01
Doug Tarry: Like, you know, 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 going to make them feel good. So if you got a window that's sucking energy out the back of your head, you're not thinking about, oh, I'm coming up with my cat here.
00:20:04:01 - 00:20:25:11
Doug Tarry: 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 in the flow. That's so much in essence of our homes now, that was less so before because we spent so much more time indoors.
00:20:25:12 - 00:20:57:06
Doug Tarry: Now it's just incredibly important. And I'm not saying you have to have massive banks of windows and you're over overstimulating light, but you should have good vistas and a natural feeling for light to progress throughout the day. That's kind of our rhythm type stuff, right? That's also 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.
00:20:57:09 - 00:21:22:29
Doug Tarry: 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.
00:21:23:01 - 00:21:43:22
Doug Tarry: 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 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 as it and plan for it.
00:21:43:23 - 00:22:08:02
Doug Tarry: An example would be years ago we planted this field of poppies because it was just it was a grassland area. Instead of it all being grass. We thought, well, let's play this field. We had. We had tourists coming to our subdivision. Who gets that like tourists? Another one is we had some old telephone poles, and so my brother Greg said, hey, I'm going to put a couple of pallets on top and it's not going to be on screen.
00:22:08:03 - 00:22:28:26
Doug Tarry: That's beside the lake we got. Yeah. So we had within a year we had ospreys nesting there. So we're not just building for humans. It's actually creating this other environment or butterfly metals. They might ultimately turn into a forested area, but it's a butterfly metal. And the idea is we're looking at the pollinators. Well, guess who loves that?
00:22:28:29 - 00:22:49:16
Doug Tarry: People. They can look up their window and see the birds and they feel like, well, I'm part 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, greenery that was this high when you planted it, you planned for it. So one of the aspects I talk about in the book is developer, friend or foe.
00:22:49:20 - 00:23:09:17
Doug Tarry: Are we actually out here to rape and pillage? 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. There were saplings like this, and we had the environmental club at the local high school planning for us. Those are now forested lots because we planted at 20 years before we needed it.
00:23:09:17 - 00:23:18:12
Sara Gutterman: Yeah, 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.
00:23:18:14 - 00:23:44:18
Doug Tarry: Yeah, absolutely. And we've done this concept called micro forcing. We didn't even know that that was the name of it. Just, you know, that's what Brother Greg did was we just we we plant micro forests and break up within our communities. And then we found there's this whole culture out of Japan about micro forcing and an arborist, the horticulturalist that was famous for this, I was like, oh, wow, there's actually a guy that did this.
00:23:44:19 - 00:23:50:14
Doug Tarry: We just made it up and then found afterwards that there's actually a movement about it. I was like, well, that makes sense.
00:23:50:14 - 00:24:09:10
Sara Gutterman: I love that. So 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?
00:24:09:12 - 00:24:31:08
Doug Tarry: I would say that professionally, I believe that we have to be able to build faster, better and at less cost. I think that also means we have to look at stocking values with that. 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 going to tell me to pound sand.
00:24:31:11 - 00:24:45:21
Doug Tarry: Doug, I'm not doing that. Like I'm not spending a 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 going to get smaller, your mechanical system is going to get smaller. You're going to have greater comfort within the home, and it's going to be healthier for you.
00:24:45:23 - 00:25:05:03
Doug Tarry: Your overall cost went down by spending that $1,000 more on the windows. Would you do it? And the answer to the vast majority of times is going to be yes, absolutely. And that's because we stock value and we got past first cost. And ultimately I think that this is one of the greatest mistakes we make as builders, as we look at first cost and say no.
00:25:05:05 - 00:25:17:06
Doug Tarry: Yeah. And 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 is the code build Chi.
00:25:17:08 - 00:25:58:02
Sara Gutterman: Yes. Well, you know, all of our cognition smart data shows that all four generations that are impacting the housing market today, boomers, extras, millennials and Zs tell us that they're looking more at long term costs and operating costs than they are at first cost and price per square foot when making home buying decisions, and all of those for generations, but particularly millennials and Gen Zs tell us that they are willing to, or already have invested in upgrades like energy efficiency, electrification, resiliency, water related upgrades, health and wellness upgrades.
00:25:58:02 - 00:26:13:00
Sara Gutterman: If those upgrades will lower their operating costs because they get the ROI, it's a pretty easy equation. So, you know, I think the data is there that shows that the consumer desire is there.
00:26:13:03 - 00:26:29:12
Sara Gutterman: 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.
00:26:29:14 - 00:26:47:16
Doug Tarry: 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 going to build this house and we're going to use it for a fundraiser, and we're going to use that money for putting in this trail connection.
00:26:47:16 - 00:27:03:06
Doug Tarry: 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. And I said, well, we're doing it. We're just like, we're going forward. We're going to do it. My brother Greg and I were adamant we're doing this. And and so we did.
00:27:03:06 - 00:27:23:28
Doug Tarry: And then that led to the community saying, we need to master trail plan because we have to figure out how to connect into what you're doing here. And so they developed an active transportation plan and a master to a 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.
00:27:23:29 - 00:27:42:05
Doug Tarry: It used to be, well, we're south of the four one. That's a major highway, and southern Ontario, we're south of the 401. Nobody lives there. And 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.
00:27:42:06 - 00:27:46:19
Doug Tarry: The first year of Covid, there was a million users of our trail network here in Saint Thomas.
00:27:46:21 - 00:27:47:09
Sara Gutterman: That's incredible.
00:27:47:09 - 00:28:01:21
Doug Tarry: 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.
00:28:01:21 - 00:28:17:28
Doug Tarry: I feel safer. The other one, that's a really it's kind of a buzz, I got to admit, is when I see other builders that are using our details, how they asked me, it's like, yeah, sure, I'll share it with you. I don't mind, but that's where you're starting to to get the acknowledgment, hey, we're on the right track.
00:28:17:28 - 00:28:38:24
Doug Tarry: 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 we use these canvas recycle bins. There are six by six by four and a half. And we are 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.
00:28:38:26 - 00:28:57:21
Doug Tarry: 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?
00:28:57:25 - 00:29:10:01
Doug Tarry: They don't want to pay for any of these words. So how do we eliminate that? And 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.
00:29:10:03 - 00:29:14:07
Sara Gutterman: I love that. Thank you for that. Leadership.
00:29:14:09 - 00:29:15:16
Sara Gutterman: In a previous episode.
00:29:15:16 - 00:29:38:16
Sara Gutterman: I talked about how many of our systems today are really governed by sheer fear in markets here, in companies, here, in people. And as we know, fear narrows imagination. Do you think fear drives a lot of decision making and housing today? And what does courageous leadership look like in response to that?
00:29:38:18 - 00:30:06:19
Doug Tarry: I think it's maybe not just necessarily fear, but also perhaps risk aversion. I think that, you know, builders feel like it's death by a thousand paper cuts. You're going to ask me to do this, this, this, this, this. And the list just keeps getting longer. And part of that goes back to the code cycles. And 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.
00:30:06:20 - 00:30:22:19
Doug Tarry: We got to have this. But when you stock this and this and this and this and this together, all of a sudden the builders, 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 going to make any money whatsoever on it?
00:30:22:20 - 00:30:41:04
Doug Tarry: 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 a 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.
00:30:41:07 - 00:30:59:01
Doug Tarry: I you know, fill your boots about if you got to make money that's great. But can we do it by looking at what's better for the consumer. And that's where I think 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 dollar.
00:30:59:01 - 00:31:36:03
Doug Tarry: So it's like monopoly money okay. We bought that land at 7000 an acre. It's now worth about 500,000 acre. Right. 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 to 160,000 acre for Rollin that can be developed for ten years, you start making those bets and yeah, you're interacting investors that need to make a profit.
00:31:36:05 - 00:31:41:11
Doug Tarry: So I don't know how you put that genie back in the bottle, but it starts with the land.
00:31:41:13 - 00:31:42:23
Sara Gutterman: Yeah. Interesting.
00:31:42:29 - 00:32:07:24
Doug Tarry: 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 housing is getting, like you said, 400,000. I know us I'm going okay, that's a 1.6. So that's about 640,000 roughly. Oh well that that's for 2800ft².
00:32:07:24 - 00:32:15:09
Doug Tarry: That's insane. We'd be Canadian. We'd be another 100 and change thousand on top of that. And that's an expensive market.
00:32:15:10 - 00:32:16:01
Sara Gutterman: Wow.
00:32:16:04 - 00:32:16:25
Doug Tarry: That's the land.
00:32:16:27 - 00:32:51:22
Sara Gutterman: Yeah, yeah. So let me ask you kind of a multi-layered question. You know, there's this growing sense that people are exhausted, not just financially but emotionally and spiritually. Do you think that the built environment can deep in or heal that exhaustion? And 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?
00:32:51:24 - 00:33:15:24
Doug Tarry: I think if we don't meet our customers emotional needs, then it will worsen. I think it's critically important that we have to be able to. That's just a to me, it's a fundamental that we have to get to. The concern is there they are. The homes are becoming more transactional, and we actually work pretty hard to try and keep investors out.
00:33:15:28 - 00:33:30:08
Doug Tarry: I get 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, your neighbor is, hey, listen, can you watch the couch for me tonight?
00:33:30:08 - 00:33:56:02
Doug Tarry: Because I got I got a bus to move. I'm the daughter, right? That sort of thing. And I think that 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 think we we assume that the developer gets a pass here and I don't think they should.
00:33:56:04 - 00:34:15:07
Doug Tarry: 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 combs can be together and tight, but it's their space. Can people breathe? Do they feel like they're stacked on top of each other? And I get you're going to have to offer that type of product as well.
00:34:15:07 - 00:34:20:18
Doug Tarry: But then what's the local amenities? So the tighter it is, the better the local amenity better be.
00:34:20:20 - 00:34:27:23
Sara Gutterman: What do you think people are truly searching for when they are looking for home?
00:34:27:25 - 00:34:31:29
Doug Tarry: Wow.
00:34:32:01 - 00:34:54:12
Doug Tarry: I think it's important that like, it's not, you know, the green buzzwords, it's it really comes back again. And I'm being a bit redundant. It's about how it makes them feel. Is my family going to be safe here. You know, is are the kids going to be able to play like, you know, floor hockey downstairs? Are they going to be safe.
00:34:54:12 - 00:35:12:06
Doug Tarry: Is is 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 fence tumble sides and you can't see the end, it does not make people feel comfortable. They are. They get kind of uptight about that. So it's it's about providing space.
00:35:12:06 - 00:35:40:18
Doug Tarry: 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. 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.
00:35:40:19 - 00:35:43:22
Doug Tarry: Lifestyle is a portion of that, in my opinion.
00:35:43:24 - 00:36:08:12
Sara Gutterman: 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?
00:36:08:15 - 00:36:34:14
Doug Tarry: Well, I and I'm not sure if I fully understand the value per square foot 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?
00:36:34:14 - 00:36:54:24
Doug Tarry: 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?
00:36:54:24 - 00:37:17:02
Doug Tarry: Part of it is, is it better whatever your metric is? And I and I think that we have to look beyond first cost because that's it's a bad and a leading indicator if you're only looking at first cost, because you can stack first cost together and get a total price. But if you're adding the wrong things together, I'll give you back to the garbage bins.
00:37:17:09 - 00:37:34:24
Doug Tarry: 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 going to pay for it? What would they like to have? They try and give them that.
00:37:34:27 - 00:37:40:12
Sara Gutterman: Yeah. What gives you hope right now despite the instability we see.
00:37:40:13 - 00:37:40:26
Sara Gutterman: Across.
00:37:40:28 - 00:37:49:19
Sara Gutterman: Housing, climate, economics and culture, what makes you believe a better future is possible?
00:37:49:21 - 00:38:08:11
Doug Tarry: 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, it only really started to hit us about, say, 6 or 7 months ago. And it was we hit the wall just like everybody else has. But there's still people out there.
00:38:08:11 - 00:38:33:15
Doug Tarry: 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. You know, I'm never going to win that buyer that's looking for the lowest cost per square foot. We're just we're not that guy because that that consumer is not educated enough to understand value.
00:38:33:15 - 00:38:59:21
Doug Tarry: And so we we try and 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 leaving you to go to an event we're having, which is celebrating the 20th year, 20th anniversary of us building Energy Star Homes?
00:38:59:28 - 00:39:01:18
Sara Gutterman: Congratulations.
00:39:01:20 - 00:39:09:00
Doug Tarry: That's pretty cool. And in that time, five times the Canadian government, Natural Resources Canada, has named us as Energy Star Builder of the.
00:39:09:00 - 00:39:10:15
Sara Gutterman: Year.
00:39:10:18 - 00:39:14:14
Doug Tarry: Five times. That's kind of cool. That's a pretty good legacy piece, too.
00:39:14:16 - 00:39:15:25
Sara Gutterman: Yes.
00:39:15:28 - 00:39:37:27
Doug Tarry: Yeah. So I'd say value. Let's let's continue to focus on value. But we have to figure out what the client seizes, the value that what our perception is. We could love it. Like, you know, I was mentioning to you before this sign up for Mino. 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.
00:39:37:27 - 00:39:47:20
Doug Tarry: That's going to make that work. So we have to make sure that we fully understand it. The stock's got to be fully engaged on it. And hopefully it's going to be a game changer for us indeed.
00:39:47:21 - 00:39:58:13
Sara Gutterman: Now I ask these final two questions to all of my guests. The first is what is value per square foot mean to you?
00:39:58:15 - 00:40:01:05
Doug Tarry: Whatever the customer tells me it is.
00:40:01:08 - 00:40:05:26
Sara Gutterman: All right. So aligning your values with your buyers values.
00:40:05:28 - 00:40:29:24
Doug Tarry: 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 along gated 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 make our decisions based on that.
00:40:29:24 - 00:40:53:27
Doug Tarry: 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 up in here year end. For me, it's wet, you know, and that's included in our price. But I can go further than that. So I've got a base win package. But then if I want to get into life arc, I've got a.
00:40:54:01 - 00:41:16:24
Doug Tarry: It goes even further than that. And life arc conceptually would be we're looking at this area needs this package. This area might need this package in this package, whether it's wind, whether it's hail, whether it's fire, whether it's flooding, what's required in your area. And that's a supplemental life arc. The other piece to that is can we go off grid for an extended period.
00:41:16:24 - 00:41:35:12
Doug Tarry: 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 going to be high benefit for at least the rough in portion to be something that clients want because they want their family to feel safe and they're concerned about changing weather patterns.
00:41:35:15 - 00:41:37:01
Doug Tarry: It's actually a thing.
00:41:37:04 - 00:42:06:22
Sara Gutterman: Indeed. Well, we have some really interesting data that shows that the younger generation, the more they're concerned about climate impacts on their home and the market, they're considering moving to kind of a climate shave haven because of the changing climate. So, you know, that willingness and interest and awareness is highest among Gen Z and then millennials and extras and fairly low among boomers because a lot of them are in their forever homes.
00:42:06:24 - 00:42:21:01
Doug Tarry: 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.
00:42:21:04 - 00:42:48:27
Sara Gutterman: I get it. I'm actually we have 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 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 factor.
00:42:48:28 - 00:42:55:11
Doug Tarry: You know, one of the number one exports out of California is water and all your.
00:42:55:11 - 00:43:19:27
Sara Gutterman: Food, right? Yep. Indeed. Indeed. But I also agree with you in terms of energy independence, that is absolutely soaring in terms of interest as we see our consumer audience in terms of priorities, particularly resiliency related priorities. It's making sure that they have a fire safe roof and then battery storage and backup and some level of energy independence. We won't build a project anymore.
00:43:19:28 - 00:43:27:11
Sara Gutterman: That's not energy. It doesn't have some level of capability of energy independence, even if it's for a short time.
00:43:27:14 - 00:43:41:13
Doug Tarry: Yeah, we're trying to target three days, and it doesn't mean that you're going to maintain a perfect 22 Celsius temperature, 7172 Fahrenheit. It's really about like, can they survive? Can we keep the occupant a lie? We don't want to lose the building to freezing.
00:43:41:14 - 00:43:42:22
Sara Gutterman: Yes, indeed.
00:43:42:23 - 00:43:56:27
Doug Tarry: You're you're freezing. Ice storm or big? The big storm you had 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, right?
00:43:56:28 - 00:44:26:23
Sara Gutterman: 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 utility bills. You know, there were folks in Texas that, you know, had to pay hundreds of dollars more than they normally would on any given month because of that story that that storm and, you know, the spike in those bills.
00:44:26:25 - 00:44:31:05
Doug Tarry: And it was only half a year before that. There was a heat dome in BC that killed 800 people in six.
00:44:31:05 - 00:44:32:05
Sara Gutterman: Days.
00:44:32:07 - 00:44:32:23
Doug Tarry: You know.
00:44:32:24 - 00:44:56:24
Sara Gutterman: Yes. Yeah. Well, you know, we used to say that it was here in the US, that it was a tale of two countries where the western half of the US had two little water and, you know, struggled with drought and wildfires. And the eastern half of the US struggled with super storms and flooding and too much water. But now we're seeing wildfires in New York and New Jersey in February.
00:44:56:24 - 00:45:26:23
Sara Gutterman: Or, you know, just last month, in April, there were these massive wildfires in Georgia and Florida and, you know, and flooding in California because the soil has had, you know, can't retain stormwater. So it's really everything that we once thought we knew in a more stable climate, you know, will say decades ago is no longer applicable. But even in terms of like a changing climate that we thought we knew ten years ago is no longer applicable, applicable.
00:45:26:23 - 00:45:48:24
Sara Gutterman: And I know, you know, the folks in U.S. 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, 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.
00:45:48:26 - 00:46:09:09
Doug Tarry: And that's honestly why we're investing so heavily in life. And it's not that we think Doug Homes needs to have a program exclusive to us. Now. We're trying to create this program to share with industry because we recognize there's a gap here. So, you know, we'll guinea pig. We're happy to pilot the thing. But that's not the end goal.
00:46:09:09 - 00:46:25:01
Doug Tarry: The end goal is where can this land that other builders can say, yes, this makes sense. And at least let's get life Arc ready. As a standard. We're very close. We think we can do life arc ready as a standard within six months. So then it's starting to look at, okay, how do we create the program? We're investigating that now.
00:46:25:02 - 00:46:29:08
Sara Gutterman: Now if people want to learn more about life Arc, where can they go?
00:46:29:11 - 00:46:30:18
Doug Tarry: The book. It's in the book.
00:46:30:19 - 00:46:37:02
Sara Gutterman: Okay. And speaking of the book, I was going to 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?
00:46:37:08 - 00:46:53:15
Doug Tarry: 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. Washes the book right here. From bleeding edge to leading edge of builders guide the net zero home. This is my annotated edition and got all my cheat notes in there. Yeah, and happy to do it.
00:46:53:15 - 00:47:08:29
Doug Tarry: I'm actually looking at doing my life arc boot camp again this year, where we walk people through like the secret sauce about what we do, because it's 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.
00:47:09:01 - 00:47:18:25
Sara Gutterman: Yes. And I have read the book, and I absolutely can tell our listeners that it is a worthwhile and fascinating read. So pick up.
00:47:18:25 - 00:47:19:07
Doug Tarry: The book.
00:47:19:08 - 00:47:21:16
Sara Gutterman: Thank you. Absolutely. Yeah.
00:47:21:19 - 00:47:28:23
Doug Tarry: I have to admit, I don't look that good in the peanut butter incident. I'm just saying.
00:47:28:26 - 00:47:33:12
Doug Tarry: Yeah. Sharing.
00:47:33:15 - 00:47:35:00
Doug Tarry: True sharing there.
00:47:35:03 - 00:47:49:06
Sara Gutterman: All right. 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?
00:47:49:08 - 00:48:17:22
Doug Tarry: 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 seem to have lost the middle ground here. And that's it's 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?
00:48:17:22 - 00:48:27:27
Doug Tarry: I would say 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.
00:48:28:05 - 00:48:51:10
Sara Gutterman: 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 on the way. Well, Doug, thank you so much for joining us on this episode of metric. I have enjoyed this significantly, you know, in front of the ideas that I always return to is that value is relational.
00:48:51:11 - 00:49:26:01
Sara Gutterman: 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, 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.
00:49:26:03 - 00:49:56:00
Doug Tarry: I think 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 we that for us we would say it's the 100 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?
00:49:56:03 - 00:49:58:01
Sara Gutterman: I love that so much.
00:49:58:03 - 00:50:03:01
Doug Tarry: And that's not just environmentally. It really isn't. It's about the society we're creating.
00:50:03:03 - 00:50:32:05
Sara Gutterman: 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, you know, and digitization in general has sped up our world and created a bit of a disconnection. I think you're right that, you know, it's perhaps our duty to find ways to help foster reconnection.
00:50:32:07 - 00:50:33:15
Sara Gutterman: Yeah, yeah.
00:50:33:18 - 00:50:34:03
Doug Tarry: I agree.
00:50:34:04 - 00:50:46:21
Sara Gutterman: Well, Doug, thank you again so much. This is the valuation metric. I'm Sara Gutmann reminding us to value and measure what is worthwhile. Because when we do, we build a better world. Thank you.
00:50:46:23 - 00:50:57:28
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