In September, Vancouver-based residential development company Ginn Group was honored as the Large Business of the Year by the Greater Vancouver Chamber of Commerce — a feat made all the more notable by the fact that the company in its current form is about 2 years old.
Ginn Group has carved out a niche by targeting what founder Patrick Ginn refers to as the “missing middle” — the market for lower-priced, entry-level homes. Ginn Group defines the cutoff for that category as $350,000, and the company aims to keep its average home prices at or below that threshold.
“I love big, gorgeous custom houses, but Clark County — and really nationwide — is lacking workforce and affordable housing,” Ginn said.
In past years, the chamber’s Large Business award has gone to long-established companies such as Silicon Forest Electronics, Waste Connections and Columbia Credit Union. So Ginn Group’s selection highlights both the speed with which the company has grown and the outsize impact it’s had in a short time.
It’s also the latest in a string of awards that the company has racked up this year. Patrick Ginn, 38, was listed in the Portland Business Journal’s 2019 “Forty Under 40” feature in April, and later in the year, Ginn Group was ranked 267th on Inc. magazine’s annual list of the 5,000 fastest-growing U.S. companies.
Ginn Group is a relative newcomer to Clark County, although Ginn himself is not. He began his career here as a real estate agent, and in 2009 founded Patrick Ginn Real Estate. He entered the homebuilding market in 2014 when he co-founded a company called CG Building. Ginn Development and Ginn Property Management followed in 2017.
Ginn Group was founded in 2018 and now serves as the umbrella company for several operating divisions including Ginn Development, which handles land management and development; Ginn Homes, which handles home construction; Ginn Property Management and Ginn Realty Group.
Hitting price points
Ginn’s argument about the missing middle is likely to resonate with Clark County residents. The median home sale price in Clark County was $375,000 at the end of October, according to the monthly report from the Regional Multiple Listing Service, and it’s been trending upward for years. The median was reported at $359,900 in October 2018, and $346,500 in October 2017.
“A lot of the (homebuilding) guys are in the four to five to $600,000s these days,” said Todd Majewski of Performance Building Products, which supplies fireplaces and garage doors for Ginn projects.
Ginn traces the rapid price increase to the 2008 recession and its aftermath. The crash created an oversupply of small-lot homes in Clark County, he said, prompting most developers to stop building new homes in that market segment.
As a result, the Clark County housing market’s recovery from the recession primarily took the form of new apartment construction and high-end homes. But the county’s ongoing population growth absorbed the small home surplus by 2014, Ginn said. Soon, the lack of new development in the preceding years led to a shortage of affordable homes.
Today, Ginn said, there are too many Clark County residents who want to become first-time homebuyers but are stuck renting because the available houses are all in the $500,000 range. The same problem also hits older residents looking to downsize.
Others in the industry tend to offer a similar assessment about the lack of lower-priced homes.
“That kind of freezes up the market, to some extent,” said Ryan Makinster, government affairs director at the Building Industry Association of Clark County. “People can’t move up, can’t move down. It’s not unique to Clark County — the ‘missing middle’ is kind of an issue statewide.”
Ideally, Ginn Group’s approach could be expanded beyond Clark County, or serve as a model for other areas facing similar shortages, according to Ginn Group marketing manager Chelsea Gaya. But for now, the company’s attention is focused on Clark County.
“To be frank, the goal would be to get enough supply or to catalyze it to where it starts stabilizing the market,” Ginn said.
The demand for entry-level homes is easy enough to identify, but it’s a challenging niche for builders to fill. Smaller homes and lower prices tend to mean smaller profit margins. Ginn points to a few strategies that have allowed the company’s developments to pencil out.
The first and most obvious is economies of scale; Ginn Group projects are all large subdivisions that allow for dozens of homes to be built in a single wave. A community needs to have at least 20 to 30 homes to make a project viable, he said.
The company also works on several communities simultaneously and has ramped up to a point where it now delivers about 10 to 12 communities per year, Ginn said, and is likely working on about three times that many projects at any given time.
“You’ve got to make a little bit of a margin on a lot of homes,” Ginn said.
Ginn’s second strategy is to take a start-to-finish approach for most projects. It acquires raw land with no prior development and then moves through the entire building process in-house, Ginn said, allowing the company to optimize the design of the streets, the lots and the homes themselves.
That’s a somewhat uncommon model in the homebuilding industry, according to Makinster, because of the high up-front cost and the wide range of necessary staff specializations.
“Most builders are builders, not developers, and most developers are developers,” he said.
In essence, the company has to be really big to make the model work — and even then, the up-front costs are steep. Ginn describes it as a major challenge, and said the land acquisition for each new development tends to be one of the toughest parts of the process.
The average Ginn Group community takes about three years from start to finish, Ginn said, and he said it’s taken about five years to reach a point where he feels like he’s perfected the process and achieved a stable project pipeline.
Now that the model is set, he said, the company has the advantage of being able to think and plan in longer terms. For example, Ginn said, the company has already finalized its roster of projects through the end of 2021.
The final strategy comes down to efficient home design, Ginn said — another benefit of doing everything in-house. He credited his design team with creating floor plans that make efficient use of limited space, allowing for physically smaller footprints that still feel spacious and inviting.
Gaya points to the company’s Landing at Salmon Creek Community as an example. The houses range from 1,435 square feet to 1,816 square feet, but their tall and narrow footprints make them appear relatively small when viewed from the street.
In a typical home, the downstairs space features high ceilings and an open-concept floor plan, with a closet and sometimes even a partial bathroom in the space under the stairs. The second floor extends above the garage to create space for four bedrooms, or three bedrooms and a central “loft” living space.
As of 2019, Ginn Group has developed nearly 1,500 lots across more than 50 developments on more than $230 million of land. Employment has grown from 13 employees in the predecessor companies in 2016 to 63 at Ginn Group.
The company’s biggest single development is Whipple Creek Village near Ridgefield, but its biggest collective footprint can be seen in its projects in the Four Seasons development, off Northeast 18th Street just east of Interstate 205.
Ginn Group’s predecessor companies were involved in the development of the main Four Seasons subdivision; now, Ginn Group has six other projects in various stages of planning or development in the area: Four Seasons Crossing, Four Seasons Terrace, Joe’s Farm, the Villas at 28th St, Latitude 45 and a future project tentatively called Four Seasons North.
Latitude 45 is Ginn Group’s first multi-family apartment complex and is scheduled to have its grand opening this weekend. The apartment project illustrates one of the ways in which Ginn is starting to branch out beyond the core products of single-family detached homes and townhomes. Joe’s Farm is planned to feature single-level “cottage”-style homes built with seniors in mind, although the houses won’t be age-restricted.
Ginn Group also added another subsidiary this year called Ginn Gives, aimed at stepping up the company’s charitable functions and community involvement.
Ginn grew up in Clark County, and he said his local focus as a builder stems from a desire to contribute to the community. The company’s employees all perform at least eight hours per year of volunteer work for local causes, Ginn said, and the company currently donates 4 percent of its net profits to local nonprofits through Ginn Gives, with the goal of eventually raising that to 10 percent.