Latest / ChangeMakers with Katie Goar / Episode 149: Whitney Hill, CEO & Co-Founder, SnapADU

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Episode 149: Whitney Hill, CEO & Co-Founder, SnapADU · ChangeMakers with Katie Goar

0:05
Speaker 1: This is change Makers, with Katie Gore finding the right
0:09
Speaker 1: solutions for the affordable housing community.
0:13
Speaker 2: Today's change maker is Whitney Hill, co founder and CEO
0:17
Speaker 2: of snap Adu, one of San Diego's leading accessory dwelling
0:22
Speaker 2: unit builders. Whitney, through snap Adu, is helping reshape how
0:26
Speaker 2: California thinks about housing, not through massive towers or billion
0:32
Speaker 2: dollar mega bills, but one.
0:35
Speaker 3: Backyard at a time.
0:36
Speaker 2: Whitney, Welcome to change Makers, Katie.
0:39
Speaker 4: Thank you appreciate it.
0:40
Speaker 2: It's an honor to have you here. And everybody knows
0:44
Speaker 2: the acronym ADU, and so I'm so excited to actually
0:47
Speaker 2: hear the details about what's happening in San Diego. Tell
0:51
Speaker 2: us how your intersection with ADU and how you all
0:55
Speaker 2: came together. Let's start from there.
0:57
Speaker 5: Happy to you, thanks Katie, and really honored to be
1:00
Speaker 5: here as well. So we started snap Adu in twenty twenty,
1:04
Speaker 5: just after the State of California adopted the more sweeping
1:06
Speaker 5: ADU regulations that made it easier to build. So my
1:10
Speaker 5: background was in operations, management and strategy. Prior to just
1:15
Speaker 5: starting my own ventures, I worked in Corporate America for
1:17
Speaker 5: about ten years at a Supply Company, and then at
1:20
Speaker 5: Bain and Company, where I was able to learn about
1:23
Speaker 5: what best in class looked like and really hone some
1:25
Speaker 5: of my operational and process skills. So I took that
1:29
Speaker 5: toolkit with me when I founded my own business in
1:31
Speaker 5: twenty sixteen, when I was investing in real estate properties,
1:35
Speaker 5: and through that process, I got a little bit more
1:38
Speaker 5: in the weeds on the construction side, realizing that if
1:40
Speaker 5: we were going to scale something, that we needed to
1:42
Speaker 5: have something more buttoned up there. So that was where
1:44
Speaker 5: I started learning about construction specifically. And so when I
1:47
Speaker 5: heard about the ADU law change, it seemed to me
1:50
Speaker 5: that since the bottleneck would no longer be the regulatory piece,
1:53
Speaker 5: the bottleneck would probably be contracting capacity. So I was
1:57
Speaker 5: keeping my ear to the ground and came across some
1:59
Speaker 5: folks talking about ADUs locally and introduce myself, and by
2:02
Speaker 5: way of that network, I met my co founder, who
2:05
Speaker 5: was just starting to focus in that space as well.
2:08
Speaker 5: So our skill sets collaborated well to allow us to
2:11
Speaker 5: start to build snap So in the last six years,
2:14
Speaker 5: we've now completed one hundred ADU builds actually in the ground,
2:18
Speaker 5: not just you know, plan sets designed or anything. Like
2:20
Speaker 5: that actual builds, So we have focused explicitly on San
2:24
Speaker 5: Diego detached new construction ADUs.
2:28
Speaker 4: So in doing that, we.
2:29
Speaker 5: Were able to build a niche for ourselves pretty quickly.
2:33
Speaker 5: And I think the reason that SNAP is fairly well
2:35
Speaker 5: known in our region and across the state is because
2:38
Speaker 5: we make it a point to publish a lot of information.
2:41
Speaker 5: So whatever we find out through all of our discussions
2:43
Speaker 5: with the regulatory duties in the cities, we try to
2:46
Speaker 5: make that available for others who are her working on
2:49
Speaker 5: their projects.
2:50
Speaker 2: How did you come up with the name? Because when
2:52
Speaker 2: I hear it, I think of snappy like speed. But
2:56
Speaker 2: how did the name originate?
2:58
Speaker 5: Yes, that's what's one of the main component, and it's
3:00
Speaker 5: making it a snap to build your ADU easier than
3:03
Speaker 5: you elsewhere. And at the time we were experimenting with components,
3:07
Speaker 5: possibly doing wall panels, so we also like the subtox
3:09
Speaker 5: of maybe snapping together. Now that said, we are a
3:12
Speaker 5: traditional stick built a contractor.
3:14
Speaker 4: At this time.
3:15
Speaker 5: We've evaluated the merits of going with panel or modular
3:17
Speaker 5: over the years and it's never quite penciled out. The
3:20
Speaker 5: savings and your time reduction wasn't there, So we do
3:23
Speaker 5: continue to be just traditional stick construction, So the name
3:26
Speaker 5: is more about making a breeze a snap to build
3:29
Speaker 5: your ADU.
3:30
Speaker 3: Nice.
3:31
Speaker 2: So you mentioned you're in San Diego. Lots of people
3:34
Speaker 2: know the tension in housing across the country, but specifically
3:39
Speaker 2: California gets a lot of attention the price dynamics and
3:43
Speaker 2: the land and so forth. But tell us what's happening
3:46
Speaker 2: in the market in San Diego and how not just
3:49
Speaker 2: that regulatory window has opened, but even the market conditions
3:53
Speaker 2: lend itself for what you're doing.
3:55
Speaker 3: Explain some of that.
3:57
Speaker 5: Sure, So the housings apply here, as with much of
4:01
Speaker 5: the coastal regions, is not keeping up with demand.
4:05
Speaker 4: So many folks are looking.
4:06
Speaker 5: To get creative with how they are housing relatives or
4:10
Speaker 5: adding rental units to capitalize on that opportunity. And that's
4:14
Speaker 5: where we've really seen the demand for ADUs, which actually
4:17
Speaker 5: coincided to with COVID as we were starting up, So
4:21
Speaker 5: we actually started snap Bayu the same day that California
4:25
Speaker 5: got shut down in twenty twenty. So as part of that,
4:28
Speaker 5: there was a mindset shift too around what does an
4:31
Speaker 5: ideal living situation look like? What are people willing to
4:35
Speaker 5: kind of flex on when they're thinking about that. So
4:38
Speaker 5: with demand for families, we do see folks wanting to
4:41
Speaker 5: access these higher end neighborhoods that would otherwise be inaccessible,
4:45
Speaker 5: so either accessing rentals in those areas or joining a
4:49
Speaker 5: family already on a property there. So we see a
4:51
Speaker 5: lot of that demand fueling the ADU market here in
4:54
Speaker 5: San Diego specifically.
4:56
Speaker 4: And then I would say too that it's just.
4:58
Speaker 5: Part of the portfolio strategy for smaller real estate investors
5:03
Speaker 5: who already have a cash flowing property in a culcial
5:06
Speaker 5: area they want add the second or even third unit.
5:08
Speaker 5: So those are a lot of the dynamics that we
5:11
Speaker 5: see behind the demand.
5:13
Speaker 3: Who's your typical buyer?
5:15
Speaker 2: I mentioned in the intro that it pretty much can
5:17
Speaker 2: be anything from a parent, an aging parent, to possibly
5:22
Speaker 2: this next gin worker housing. But you know, is there
5:27
Speaker 2: an ideal buyer or is it just anybody explained to
5:32
Speaker 2: us who is who is buying an ADU right now?
5:36
Speaker 5: Yes, So I would say the folks adding ADUs are
5:41
Speaker 5: probably sixty to forty split between folks looking to add
5:44
Speaker 5: rentals to their property, it's probably sixty and then about
5:47
Speaker 5: forty percent is for family usage.
5:49
Speaker 4: And like you mentioned, out of.
5:50
Speaker 5: That family split, it's about half half with aging family
5:52
Speaker 5: versus younger family trying to access that property with the rentals,
5:57
Speaker 5: then some folks are adding them furnished rentals. I would
6:01
Speaker 5: say that's that's probably around twenty percent of that portion,
6:04
Speaker 5: and then the rest would be just regular annual leases
6:07
Speaker 5: that sort of thing.
6:08
Speaker 4: As far as snap.
6:09
Speaker 5: At U specifically, though, we do skew towards folks who
6:13
Speaker 5: are looking for our turnkey experience. We are designed permit
6:16
Speaker 5: build under one roof. So for folks who are looking
6:19
Speaker 5: for more of a DIY experience, looking to subcontract it
6:22
Speaker 5: some of the themselves or manage some of the job,
6:25
Speaker 5: that's not who we appeal to in the market. We
6:27
Speaker 5: appeal to those more like working professionals who are looking
6:30
Speaker 5: to have a hands off experience, like getting that ADU
6:32
Speaker 5: in the yard.
6:32
Speaker 2: Typically, when there's new construction, there is a tension in
6:36
Speaker 2: the neighborhood to say, how much parking, how much traffic,
6:40
Speaker 2: what's the neighborhood character going to change? Like they're saying
6:46
Speaker 2: things from being in the neighborhood. Is there tension like
6:51
Speaker 2: that when you're trying to bring ADU units to a neighborhood.
6:56
Speaker 4: I would say that most.
6:57
Speaker 5: Of that tension, especially what you'll see in the news,
6:59
Speaker 5: has stemmed from the bonus program that the city of
7:01
Speaker 5: San Diego allowed. That's beyond the state requirements. So in
7:06
Speaker 5: certain scenarios, you could add additional ADUs beyond the one
7:10
Speaker 5: on say a single single family property, and there were
7:13
Speaker 5: a few situations where a single property with one home
7:17
Speaker 5: on it ended up having proposals for more than one
7:19
Speaker 5: hundred ADUs. And I know that sounds insane, but it
7:22
Speaker 5: actually happened in a few cases where there were say
7:25
Speaker 5: twenty four duplexes top and bottom. Now that had massive blowback.
7:29
Speaker 5: It actually led to a reevaluation of not just that
7:32
Speaker 5: bonus program in San Diego, but also just the baseline rules.
7:35
Speaker 5: So that's usually where the tension is. We again don't
7:38
Speaker 5: do that kind of work. It's more the ones, twos,
7:41
Speaker 5: threes on a property, and so long as it's with
7:43
Speaker 5: the character of the neighborhood, we don't really get that
7:46
Speaker 5: kind of pushback. Where you do see it in the news,
7:48
Speaker 5: especially would be for those much larger developments that were
7:51
Speaker 5: not really the spirit of the ADU law. I would
7:53
Speaker 5: say there is still concern you know about parking and
7:56
Speaker 5: congestion in neighborhoods. But I would say too that part
7:59
Speaker 5: of that is our job to as practitioners in this space,
8:03
Speaker 5: to guide a property owner around what's going to be
8:07
Speaker 5: suitable for their unit. And that's not just you know,
8:09
Speaker 5: necessarily a numbers optimization. That might also be a quality
8:12
Speaker 5: of life. Do you want to add parking even though
8:14
Speaker 5: it's not required because your tenant will pay more for it.
8:16
Speaker 5: So we do have a lot of folks who look
8:19
Speaker 5: to add those kinds of features and be thoughtful about
8:21
Speaker 5: the development, even though they could technically be doing more,
8:24
Speaker 5: they choose not to.
8:27
Speaker 2: What are the numbers as far as how many units
8:30
Speaker 2: are needed, how many units in the pipeline can the
8:35
Speaker 2: city handle, or what are they trained to achieve. Are
8:39
Speaker 2: there any type of analytics that are saying, hey, you know,
8:41
Speaker 2: we could build today or we need to build over
8:45
Speaker 2: the next few years. Are there some numbers out there?
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Speaker 5: There are some numbers that are targeted by each jurisdiction.
8:51
Speaker 5: So from the state, what they have is like they're
8:53
Speaker 5: housing goal numbers. Now I don't know all those off
8:56
Speaker 5: the top of my head, but as far as I guess,
8:58
Speaker 5: other measures of capacity. Several cities publish what their review
9:02
Speaker 5: timelines are, and you holonga queue if you submit plans,
9:05
Speaker 5: and you know what does that look like. So that's
9:07
Speaker 5: improved drastically over the last few years as cities have
9:10
Speaker 5: figured out their process for handling ADUs, So we don't
9:13
Speaker 5: see that as much of a bottleneck at this time.
9:17
Speaker 5: I would say, more of the challenge with capacity and
9:20
Speaker 5: kind of like getting these through and built as fast
9:22
Speaker 5: as we would like. It's more around the consistency of
9:25
Speaker 5: the application of the law. So it's not even that
9:27
Speaker 5: regulations are changing so rapidly they are, but a bigger
9:30
Speaker 5: thing is about how it's being enforced locally, things like
9:33
Speaker 5: fire code that can have discretionary interpretation where it's hard
9:37
Speaker 5: to get a straight answer before you actually submit to
9:39
Speaker 5: the city, which then leads to rework and longer timelines
9:42
Speaker 5: during that process. So that's one of the bigger capacity
9:45
Speaker 5: type constraints that we deal with.
9:49
Speaker 3: Philosophically.
9:50
Speaker 2: Are you seeing, you know, just the community be more
9:55
Speaker 2: embracing of ADUs as people are learning or is there
9:59
Speaker 2: a phill sapphogal switch that still needs to happen, so
10:02
Speaker 2: to speak.
10:03
Speaker 5: We're there, I would say that that shift has already
10:06
Speaker 5: been made in California, So not only during the last
10:10
Speaker 5: year six years, but even prior to that, you would
10:12
Speaker 5: see ADUs sporadically throughout the state.
10:15
Speaker 4: So I think we're there again. Where the blowback.
10:18
Speaker 5: Was was with some of those bonus programs, and ironically
10:21
Speaker 5: that actually had the impact of making folks look at
10:23
Speaker 5: the other ones favor more favorably, like, oh, traditional your
10:27
Speaker 5: family sort of ADU is great. Like people got even
10:29
Speaker 5: more appreciative of that kind of development. I also think
10:33
Speaker 5: as you see more of these in place for longer,
10:36
Speaker 5: we start to see them in housing supply when things
10:39
Speaker 5: go back up for sale in the market. So the
10:41
Speaker 5: more of those comps that we have in the inventory too,
10:45
Speaker 5: and more financing that we have available for different kinds
10:47
Speaker 5: of options, all of that makes it more appealing to
10:52
Speaker 5: the average homeowner. And we also see that taking off neighborhoods.
10:55
Speaker 5: It is always harder to be sort of the first
10:57
Speaker 5: one in an HL way for example. For sure, we've
11:00
Speaker 5: faced bigger headwinds when we know we are one of
11:03
Speaker 5: the first ad to use in a neighborhood.
11:05
Speaker 2: Yeah, you mentioned an interesting peach piece. I think of
11:10
Speaker 2: wealth building tools that ADU can help people come into
11:14
Speaker 2: this wealth building dynamic.
11:17
Speaker 3: You know, maybe they.
11:18
Speaker 2: Can't buy their first home at one point five million
11:21
Speaker 2: or whatever the average San Diego price is for a home,
11:25
Speaker 2: but they can get into a market they can demonstrate
11:28
Speaker 2: some wealth building. Are you seeing that be a component
11:33
Speaker 2: that is attracting a buyer or what's happening there?
11:36
Speaker 5: Definitely we see some examples of folks purchasing properties with
11:41
Speaker 5: the intent of adding an ADU so they can create
11:43
Speaker 5: that and come stream on their property and access something
11:45
Speaker 5: they would not have been able to afford otherwise. I'd
11:48
Speaker 5: say that's the biggest one. We also see some folks
11:51
Speaker 5: deciding to downsize from their existing home into an ADU
11:54
Speaker 5: and renting out the main home. So you know, various
11:58
Speaker 5: takes on that, but lots of different folks are taking
12:01
Speaker 5: advantage of it as an opportunity, and it kind of
12:03
Speaker 5: pencils up differently in different areas. The more inland you go,
12:07
Speaker 5: the returns look different, of course, because our build cost
12:10
Speaker 5: doesn't really go down out there, but the rental rates
12:12
Speaker 5: don't quite support the same economics. So we do see
12:15
Speaker 5: more of that happening. More in coastal areas.
12:19
Speaker 2: Are there any fun stories about multi generational living that
12:25
Speaker 2: you've come across where people, you know, I think of
12:28
Speaker 2: our own aging parents that we've had to help, and
12:34
Speaker 2: you know, if there was access to an ADU, it
12:37
Speaker 2: may have changed some dynamics that it would have opened
12:40
Speaker 2: up some opportunities. And I'm just thinking of my own
12:43
Speaker 2: story here. But have you seen anything like that play
12:46
Speaker 2: out or really good multi generational living stories that you
12:50
Speaker 2: could share with us.
12:51
Speaker 4: Yes, there's so many, but to pick I guess a couple.
12:56
Speaker 5: We've seen examples where folks were getting ready to have
12:59
Speaker 5: their first chill and there was some nervousness around that with.
13:03
Speaker 4: How we're going to handle childcare and both be working.
13:05
Speaker 5: So a solution we've seen several times is to build
13:08
Speaker 5: the ADU in the backyard for grandma to move closer
13:12
Speaker 5: to help with the kids, but then also to help
13:14
Speaker 5: her and her old age. So we've seen several of
13:16
Speaker 5: those play out. And then you'll also sometimes see the
13:20
Speaker 5: younger couple sort of moving into that ADU because they
13:23
Speaker 5: don't have kids yet, right, so they'll move into the
13:25
Speaker 5: smaller unit. Mom and dad will stay in the primary,
13:29
Speaker 5: and then the intent is to switch that housing arrangement.
13:32
Speaker 5: Once the grandkids start coming, then the older couple downsizes
13:36
Speaker 5: into the ADU, the younger family now moves into the
13:39
Speaker 5: main house. So we've also seen folks who explicitly are
13:41
Speaker 5: planning for that kind of a transition when they're thinking
13:44
Speaker 5: about how they want to structure their ADU, design and build.
13:48
Speaker 5: So lots of different combinations there, but the stories are
13:51
Speaker 5: always heartwarming and pretty much the universal message we hear
13:54
Speaker 5: is I just wish we'd even done it sooner. We
13:57
Speaker 5: did a retrospective last fall when we come our one
14:00
Speaker 5: hundredth builds. We surveyed a bunch of our homeowners. About
14:03
Speaker 5: a third of the ones we'd ever done replied, so
14:05
Speaker 5: it's a decent sample size and overwhelmingly, the value that
14:09
Speaker 5: families felt that they got from the ADU was was
14:13
Speaker 5: the same or higher than what they had anticipated going
14:16
Speaker 5: into that project. So definitely did not hear anyone saying
14:20
Speaker 5: I wish they didn't build.
14:21
Speaker 2: Is there something that has surprised you about the construction
14:25
Speaker 2: process or running a construction company with this particular knit.
14:31
Speaker 5: Yes, you would think within six years that we would
14:34
Speaker 5: have this all dialed in, and the fact is that
14:37
Speaker 5: it changes every week. Or month, so we still are
14:41
Speaker 5: to continuing to evolve to address that. The other reason
14:44
Speaker 5: that it's taking so long to get really good in
14:46
Speaker 5: this space is that the timeline for the overall project
14:49
Speaker 5: is quite long. So on average, from the time someone
14:52
Speaker 5: signs a contract like let's get started on the design
14:54
Speaker 5: to the time we hand them the keys, that length
14:57
Speaker 5: has increased every year we have been in business, and
15:00
Speaker 5: it's not for us getting more some process. We've dial
15:02
Speaker 5: a lot in, but there are so many more requirements
15:06
Speaker 5: now than there're war Back in twenty twenty one, let's
15:08
Speaker 5: say it felt like the wild West. There was nothing
15:10
Speaker 5: with fire, there was nothing with utility upgrade issues. We
15:13
Speaker 5: were just sort of going in there and getting it done.
15:15
Speaker 5: And as the cities and jurisdictions have an authority have
15:19
Speaker 5: sort of caught up, it's become much more cumbersome as
15:23
Speaker 5: far as what's required to get an ad at the ground.
15:26
Speaker 5: So because of that timeline, there haven't been that many
15:29
Speaker 5: cycles of this. So that's been sort of surprising as well,
15:32
Speaker 5: is really how long it's taken to get this to
15:35
Speaker 5: a point of somewhat of a stable jumping off point.
15:40
Speaker 4: We also see a lot of new entrants every year.
15:42
Speaker 5: For that reason, you know, a contractor thinks ADU seem
15:45
Speaker 5: like an easy space to like, go make a buck,
15:47
Speaker 5: and unfortunately there's a lot of that and they don't
15:50
Speaker 5: see the impacts of their decisions for a year and
15:53
Speaker 5: a half, let's say, right, So they undermid something and
15:56
Speaker 5: they don't fully vet everything during an upfront feasibility process
16:00
Speaker 5: us and it comes back to bite them during the
16:02
Speaker 5: build when they realize, oh, man, I didn't budget for
16:04
Speaker 5: all these utility upgrades or the site prep all these
16:07
Speaker 5: things that are not very favorous but have to be done.
16:11
Speaker 5: So for all these reasons, the learning car has been steep.
16:14
Speaker 5: So I look forward to a point where our industry
16:18
Speaker 5: has a bit more maturity where we're not constantly having
16:21
Speaker 5: to readjust to the interpretations.
16:23
Speaker 2: What are the top three biggest bottlenecks right now that
16:26
Speaker 2: you're seeing? I mean, is it permitting like you mentioned,
16:29
Speaker 2: or is it the changing construction standards?
16:32
Speaker 3: Like can you tell us the top three bottlenecks?
16:34
Speaker 5: So I'd say, yes, the biggest bottleneck continues to be permitting,
16:38
Speaker 5: and not even because of turntimes from the city, those
16:41
Speaker 5: have gotten better. I would say, we get comments back
16:43
Speaker 5: within a month in most cases, but that kind of
16:46
Speaker 5: moving target that ends up extending our revisions is one
16:51
Speaker 5: of the biggest hurdles. And I already mentioned things like
16:53
Speaker 5: the fire code and how that's being applied city by
16:57
Speaker 5: city utility requirements as well, so all those different moving
17:02
Speaker 5: pieces needing to also get reviewed and permitted on each project,
17:07
Speaker 5: those simply add up. There's a lot of different components involved,
17:10
Speaker 5: so even if the turntime on each one it's fairly quick,
17:13
Speaker 5: still adds up to an average permitting timeline of three
17:16
Speaker 5: to eight months in various cities. So that's I would say,
17:20
Speaker 5: the biggest one. And then you know, things like on
17:23
Speaker 5: the construction side, we'd always like to go faster, but
17:25
Speaker 5: there are certain realities around whether you're building a five hundred.
17:28
Speaker 4: Square foot house or five thousand square foot house, you
17:31
Speaker 4: have to have the.
17:32
Speaker 5: Same number of trades coming in there to do their job,
17:34
Speaker 5: so there's sort of a floor on how fast these
17:36
Speaker 5: can get built, and it's sometimes surprising to folks that,
17:40
Speaker 5: oh man, it's not that much faster than constructing, you know,
17:43
Speaker 5: a complete custom hole.
17:45
Speaker 4: Are there some.
17:46
Speaker 2: Neat design things that you've seen with an ADU that
17:51
Speaker 2: you want to share with this. I've seen a few
17:53
Speaker 2: features where people have upgraded tile or they've incorporated some
17:57
Speaker 2: outside landscaping to upset you know, what is just a
18:04
Speaker 2: standard build, and so I was curious if any of
18:07
Speaker 2: those types of aesthetics are making their way in through
18:10
Speaker 2: the design phase.
18:13
Speaker 5: Yes, we certainly here in southern California see a lot
18:16
Speaker 5: of demand for having multipanel sliding doors, sometimes lack contina
18:19
Speaker 5: doors to open up a certain wall of the home
18:23
Speaker 5: to the outside where they might have a trellis or
18:25
Speaker 5: some other covering to allow sort of an indoor outdoor feel.
18:29
Speaker 5: So we definitely see that. We'll see an occasional roof
18:31
Speaker 5: deck as well, which are permitted in some cities on ADUs,
18:34
Speaker 5: so especially if you have that coastal view, it's it's
18:36
Speaker 5: nice to get that that access. So we certainly see
18:40
Speaker 5: some of those approaches, and then we see people being
18:43
Speaker 5: creative with the limited footprint that they do have, so
18:46
Speaker 5: things like combining furniture and ways that you wouldn't normally
18:49
Speaker 5: see in it in a larger home, So having a
18:51
Speaker 5: dining table directly against a couch that's then facing sort
18:56
Speaker 5: of the living area that works perfectly while on a
18:59
Speaker 5: more compact space, so we see folks being thoughtful with that.
19:03
Speaker 5: We also have seen quite a bit of you're built
19:06
Speaker 5: in storage where folks are trying to be more thoughtful
19:09
Speaker 5: with like a nook at the end of the hallway,
19:11
Speaker 5: adding some cabinetry there to make sure that they're capitalizing
19:14
Speaker 5: on this wreforters that they do have.
19:16
Speaker 3: I want to.
19:16
Speaker 2: Read one of the awards that you've gotten. You were
19:20
Speaker 2: mentioned in San Diego Business Journals forty next top business
19:24
Speaker 2: leaders under forty So congratulations on that. How does it
19:31
Speaker 2: feel or what does it reflect on your leadership here
19:35
Speaker 2: as a founder or co founder here? Just like is
19:40
Speaker 2: this something that you wouldn't have expected or just reflect
19:44
Speaker 2: on that for a minute.
19:47
Speaker 5: Yeah, I appreciate that, and you know, we earned that
19:49
Speaker 5: when we were about three years in, so we were
19:52
Speaker 5: really proud to be recognized as a going concern. You're
19:56
Speaker 5: that early in our development. So I would say say
20:00
Speaker 5: that in some ways, yeah, I was surprised to already
20:02
Speaker 5: be at a point where I felt like I had,
20:04
Speaker 5: you know, a valid application for something like that. But
20:08
Speaker 5: I would say that it's a testament to building a
20:10
Speaker 5: business that you know, showed that where you show up
20:13
Speaker 5: the way that you want to and that you're kind
20:15
Speaker 5: of bringing in the elements of what you've seen work
20:17
Speaker 5: in the past. And that's certainly what I've done here
20:19
Speaker 5: at SNAP, bringing and elements from different companies that I
20:22
Speaker 5: wanted to emulate now in our business. So it's exciting
20:26
Speaker 5: to see that, you know, come all the way to fruition,
20:29
Speaker 5: and also in things like the client reviews that you
20:31
Speaker 5: receive when they you mention something that we strive for
20:33
Speaker 5: as a team. It's extremely rewarding. But there's certainly a
20:38
Speaker 5: lot of exciting companies out there, and I wouldn't say
20:40
Speaker 5: anything we're doing is you're so earth shattering. A lot
20:43
Speaker 5: of it's pretty unglamorous, just the blocking and tackling of
20:48
Speaker 5: of running a business in a pretty antiquated industry in a.
20:51
Speaker 4: Lot of ways.
20:52
Speaker 5: So it's exciting that you can still be recognized for
20:55
Speaker 5: for that even in a less exciting space.
21:00
Speaker 2: I noticed here that you got your bachelor's degree from
21:02
Speaker 2: Yale and you have an MBA from NYU with a
21:07
Speaker 2: specialization in entrepreneurship. I mentioned that because sometimes when people
21:12
Speaker 2: go and get their degree, you know, they don't really
21:14
Speaker 2: know what the path is or but it seems like
21:19
Speaker 2: your degrees have matched up with the market, have matched
21:24
Speaker 2: up with your talent, and you actually are hitting that
21:28
Speaker 2: professional stride. I don't know, does it feel like that
21:32
Speaker 2: or was that part of your professional master plan?
21:36
Speaker 4: Oh? Well, I appreciate that it does feel like that now.
21:38
Speaker 5: At the time, I had no idea. I was frantically
21:41
Speaker 5: trying to find where I belonged, and so a lot
21:43
Speaker 5: of my initial career, including my degrees, was around trying
21:49
Speaker 5: to get a generalist background because I didn't want to
21:52
Speaker 5: close off any doors. I really didn't want to go
21:54
Speaker 5: specialize in something because I didn't know what that would
21:56
Speaker 5: be yet. So no, there was no like grand plan
21:59
Speaker 5: other than I needed to fiure out what I was
22:00
Speaker 5: good at. And sometimes it's tricky when you don't have
22:04
Speaker 5: that you know, kind of niche calling. I really wished
22:06
Speaker 5: I had just wanted to go, you know, specialize in something,
22:09
Speaker 5: but that wasn't where I was at the time. Now
22:12
Speaker 5: it's such a relief to have my niche. So in retrospect, yeah,
22:15
Speaker 5: looking back at that, that was the right degree. It
22:17
Speaker 5: was you know, perfect to kind of prep for this.
22:20
Speaker 5: So I guess in some ways that opened up doors
22:22
Speaker 5: I didn't even know needed to be opened.
22:26
Speaker 2: Well, congratulations on that, because not a lot of people
22:29
Speaker 2: are able to merge all of those intersections and really
22:34
Speaker 2: add impact to the world I mean, you know, or
22:37
Speaker 2: to your San Diego region, because so you know, this
22:40
Speaker 2: is a great moment for you personally and professionally, it
22:44
Speaker 2: appears talk to me about San Diego. Is that your
22:48
Speaker 2: guys's niche city or do you want to expand past there?
22:53
Speaker 2: What's your vision and strategy there?
22:57
Speaker 5: We do picture focusing here still for the medium term,
23:01
Speaker 5: I would say, so, we think that there's still a
23:04
Speaker 5: lot to be learned in a single market before trying
23:07
Speaker 5: to apply that elsewhere. And even in our county that
23:09
Speaker 5: covers fifteen different jurisdictions, so it's it's quite a bit
23:13
Speaker 5: of complexity to say good to another county, not another fifteen.
23:17
Speaker 5: So we want to make sure that we have a
23:19
Speaker 5: really solid foundation before we would consider that. I would
23:21
Speaker 5: say too, though, that we don't necessarily see geographic expansion
23:25
Speaker 5: as the most attractive way to increase our revenue. There's
23:29
Speaker 5: certainly vertical integration plays that are of venturist. You know,
23:33
Speaker 5: parts of our builds, things like adding a septic system,
23:36
Speaker 5: adding and retaining walls. Right now, we outsource a lot
23:38
Speaker 5: of that. There's certainly an argument for bringing some more
23:41
Speaker 5: of that in house, certainly on just the design side.
23:44
Speaker 5: So that's you know, something up in the air that
23:46
Speaker 5: would allow us to get more ideas in the ground here.
23:49
Speaker 5: And then also, you know, we're still a relatively small
23:52
Speaker 5: not relatively we are absolutely a small portient portion of
23:55
Speaker 5: the market, even though we are the leading stick built
23:58
Speaker 5: contractor out here. So we're something like three percent of
24:00
Speaker 5: the detached ADU market. So easily we think we get
24:03
Speaker 5: to a saturation of three to five times that without
24:06
Speaker 5: starting to hit some sort of a ceiling.
24:09
Speaker 3: Yeah, very nice.
24:10
Speaker 2: Well, it sounds like you've got a great market there
24:14
Speaker 2: in which you will be able to have multiple years
24:18
Speaker 2: of success and continuing to compound on that and build
24:22
Speaker 2: on that.
24:23
Speaker 3: Well, is there anything that we've missed.
24:26
Speaker 2: We've talked about several aspects of your business and what
24:29
Speaker 2: you've accomplished.
24:30
Speaker 3: Anything else you'd like to highlight.
24:32
Speaker 5: I guess just given the context of the show, Katie,
24:35
Speaker 5: you know, when I was thinking about what we've discussed
24:38
Speaker 5: today and so much of your focuses around affordable housing.
24:41
Speaker 4: You know, at first glance, it's man, I wish ADUs.
24:44
Speaker 5: Were that like and some are, but in our particular focus,
24:48
Speaker 5: you were often building things that are at the higher
24:52
Speaker 5: end of the ADU market, so you have to kind
24:54
Speaker 5: of sometimes wonder, how do we make this more affordable?
24:56
Speaker 5: And I think that goes back to what we were
24:59
Speaker 5: just saying about wanting to really hone our craft so
25:03
Speaker 5: that we can bring down costs. And so much of
25:06
Speaker 5: the bloat and construction is caused by folks making big
25:11
Speaker 5: guesses about what's going to be downstream to sort of
25:14
Speaker 5: cover themselves. So a lot of our focus has been
25:17
Speaker 5: on eliminating that guest work by doing the work upfront
25:20
Speaker 5: and again not glamorous and not what people want to
25:22
Speaker 5: hear sometimes, but I think in doing that we can
25:25
Speaker 5: reduce a lot of the friction of what ultimately raises
25:29
Speaker 5: costs in in market.
25:31
Speaker 4: So I can see as.
25:32
Speaker 5: We're trying to deepen our footprint here, trying to make
25:35
Speaker 5: our entry level price point more accessible by becoming better
25:39
Speaker 5: at what we do well.
25:41
Speaker 2: And it's great to have another option in the market
25:46
Speaker 2: that is allowing some flexibility for people, allowing some rental income,
25:51
Speaker 2: allowing potentially a step stepping stone for them into home
25:56
Speaker 2: ownership possibly. So you know, we we can broaden the
26:00
Speaker 2: definition of what we view as affordable housing by just
26:04
Speaker 2: saying by proxy, ADUs do have a place at that table.
26:08
Speaker 2: So we are very appreciative to companies like Snapadu that
26:13
Speaker 2: can actually bring yet another creative option into the housing marketplace.
26:19
Speaker 3: Quite frankly, Whitney Hill, it.
26:20
Speaker 2: Has been a great pleasure to have you here and
26:24
Speaker 2: to focus on what snap Adu is doing in San Diego.
26:28
Speaker 3: Thank you so much for your time and we appreciate
26:32
Speaker 3: what you're doing.
26:33
Speaker 5: Likewise, Katie, thank you so much for having me and
26:35
Speaker 5: for all the kind words.
26:36
Speaker 4: I really appreciate it.
26:37
Speaker 1: Thanks for listening to change Makers with Katie Gore. To
26:41
Speaker 1: find out more about Katie, go to quad l dot com.
26:44
Speaker 1: That's quad el dot com. This has been a production
26:50
Speaker 1: of Forbes Books Radio