Today we’re re-connecting with one of our all-time favourite Buzz Talkers, Bob Finnigan, Chief Operations Officer of Housing at The Heron Group and former President of the Ontario Home Builders Association (OHBA).
Bob is an industry veteran with well over three decades of experience in real estate development. It takes a pretty dedicated developer to head up the OHBA, bringing the concerns of developers across Ontario to policy makers, and Bob excelled in the role.
It’s been two years since we last spoke with Bob and this time we buzz with him about his passion for home building, why he doesn’t see a price flat-line as such a bad thing and why the family room should be the focus of every house.
BuzzBuzzHome: Why are you so passionate about home building?
Bob Finnigan: It’s been something that I’ve been doing for a long time. I became interested in it as a kid. I lived in an older house and, almost out of necessity, I learned how to paint and fix things. It just piqued my interest.
Our business is a business where things take literally years and years to develop — from the time you’ve bought a piece of land to the time you develop it and take it to market to moving the people in. Whereas when I first got started, within a day you could stand back and say “Hey, I did that.” As time rolled on, actually getting involved in building houses that you could drive by ten years later and say “we did that”, that was a great feeling of pride.
BBH: Have you ever considered switching industries? Since you’ve been in development for so long, have you ever wanted to try something new?
BF: No. I enjoy it immensely and have never thought of doing anything else. My grandfather was also in the construction business and when I was a kid he told me, “People have to eat and they have to live somewhere so if you’re in one of those two industries, you’ll always have a job.” He’s not wrong. If you can do anything in this industry, you should be able to do it for a long time.
BBH: Tell us more about your time with the Ontario Home Builders Association.
BF: I was President of the OHBA in 2011. I was also President of BILD in 2007. I’m currently sitting on the executive of the Canadian Home Builders Association as well. Each position entailed listening to the members’ concerns about the industry — what they think needs to be fixed. The second part of the position is meeting with the policy makers that can initiate change. It’s a two part job: making sure you’re listening to the people who are working in the industry and taking their message to the people have jurisdiction over the industry.
It’s amazing how similar and how well-tuned our builders are across the province of Ontario. Builders developing thousands of homes and builders developing 15 homes often have same issues and concerns, it’s just a matter of scale.
BBH: What major projects is the Heron Group working on at the moment?
BF: We’ve just come off some major projects and it’s not a bad time to be switching gears. The growth plan that was put in place in 2006 affected all builders in different ways. It delayed a number of our projects we thought we’d be starting a bit earlier. Looking forward in the next 6 to 12, we’ve got a mid-size project coming out in Richmond Hill of some really nice 40 foot and 45 foot singles. There will be about 150 units in the project.
We also have 100 lots in Brampton later in the year. Those will be single families homes too.
We also have a 60 unit townhome project that we’re calling urban townhomes as they’re a little more compact. I’m excited about that because we haven’t built them in awhile. That’s in Richmond Hill as well. It will be right on Yonge Street so next to transit and shopping.
BBH: Are we in the midst of a price correction right now in Toronto?
BF: It’s interesting, I got to sit on a panel last week and discuss the same thing.
What concerns me is that we’ve had such a rapid switch from what I call ground-oriented housing to high-rise in the last few years. Condo units outweigh single family 3:1 in the market right now. A good portion of that can be traced back to the growth plan and the attempt to densify. The normal order of land supply for single family housing has been interrupted so there hasn’t been a lot of inventory available. Demand is strong and supply is low, so that tends to indicate increased prices. Last year condo prices flatlined but in the single family market, prices continued to rise dramatically.
We keep slimming our market down in terms of affordability. In certain areas of the GTA the prices got to a point where people simply cannot afford them and they need to turn to an alternative housing form. The demand is there. People would love to own single family homes across the GTA. But if we continue to see a restriction in supply of lots and we continue to see a price increase, there has to be a point where prices flat-line just to let more people fall under the affordable line. If they don’t, it’s a major concern to me. I think we’re at a point though where we may see a flat-lining of prices, regardless of demand, and I think that’s a good thing.
I don’t believe in the doom and gloom though. I don’t think all hell is going to break loose. There’s enough people coming to this province. If you look at the numbers for low-rise, they’ve been substantially low for some time so there is pent-up demand. It’s just a matter of affordability.
BBH: Who’s responsible for driving the doom and gloom? Some people point the finger at the media while others say that the media is just reporting the facts. Where do you stand?
BF: It’s two-part. Some people, and I experience this in my peer group, would love to see house prices come down. They think that things have just become too expensive. We haven’t had a slow year in awhile apart from a dip in 2008. The statistics can be twisted by the media. When you have a record year, the following year is never going to look as good. 2011 was an incredible year. 2012 was a great year, but the numbers are still substantially down.
BBH: What’s your favourite room in your house and why?
BF: The family room. You spend most of your time there. We have the family computers in that room, the flat screen and the sound system. You can see the kitchen from it. Every one can be doing something different, but you can all the be in the same room.
That’s the focus of every new house you see built today.
Thanks for buzzing with us Bob!