Build For Speed: America Needs Housing Now! with Scott Menard

Scott Menard has been in construction since he was 17 years old, starting as a laborer for KB Homes during summer breaks. Over nearly four decades, he's worked his way through purchasing, project management, land acquisition, and operations at some of the nation's most respected builders, including Ryland, Taylor Woodrow, and Shea Homes. 

Now he's the president of Homes Built for America, a company that didn't exist four years ago and is already the 14th largest builder in the San Francisco Bay Area. They're doing something many builders won't touch: focusing exclusively on first-time buyers in one of the most expensive and regulation-heavy markets in the country.

"We really sell to first time buyers. A lot of times, you know, they're dinks, dual income, no kids, all have great jobs they want their piece of the American dream."

This conversation goes deep into what it actually takes to build in California. Scott walks through the reality of putting three to five million dollars into a property before you even close on it. Land deposits, plan sets, fees, entitlements. A year to get a water permit isn't unusual, it's standard. Cities would rather hold onto blighted shopping centers from the 1950s than convert them to residential because they're still dreaming some tech giant will show up and bring jobs and sales tax revenue. Meanwhile, moderate-priced homes in Santa Clara County are hitting two million dollars.

"It's really capital intensive and it takes a lot of balls and you better have a lot of money."

The parent company, True Life Companies, spent years as a business-to-business developer, buying land in difficult markets, getting it entitled, and selling finished lots to the big builders who didn't want to take on entitlement risk. Coming out of the Great Financial Crisis, the major builders got smart about balance sheets and stopped carrying heavy land inventories. That created an opportunity for companies like True Life to step in and handle the messy, capital-intensive, time-consuming work of dealing with planning commissions and city councils.

Four years ago, they decided to stop just selling lots and start building houses themselves. Their thesis was simple: focus on three-bedroom townhomes for first-time buyers. Not because it's the most profitable segment, but because it's the most needed. 

Scott talks about the millennial wave, about dual-income couples with good jobs who can't come up with down payments, about kids living with parents into their thirties not because they're lazy but because housing is genuinely unaffordable.

"I don't think I'll ever see it fixed in my lifetime. There's always gonna be a massive housing imbalance."

The financing piece is fascinating. They've been working with non-recourse construction loans from debt funds rather than traditional banks, which means higher interest rates but no personal guarantees. Scott explains how banks have largely pulled back from construction lending, leaving debt funds to fill the gap. They just brought in a partner with a balance sheet who can provide bank guarantees, which is already making projects more viable.

There's a whole section on what's holding back sales right now. Unemployment is low, inflation has plateaued, mortgage rates aren't historically high, builders are offering incentives and dropping prices. Yet people aren't buying. Scott and other builders are trying to figure out the psychological piece. Is it lingering fear from the 2008 crash? Is it paralysis from too many options? Nobody seems to know.

Michael queries Scott on what it takes to scale from 10 homes to 20, from 20 to 100. Scott's answer is blunt: you have to get comfortable with risk. The dollars are real, the stress is real, and if you can't handle that, you'll stay stuck.

"You have to get comfortable with the risk and the fact that it's scary. The dollars are real, the investors are real, the banks are real. It's a lot of stress. It's a lot of pressure and you got to just be comfortable and okay with the risk."

He also talks about hiring people before you need them rather than too late, bringing in a CFO they couldn't really afford early on because they knew they'd never get off the ground without that expertise.

"We hire the guys now before we need them versus what we're all so used to doing. You hire them way too late, and it's expensive, your cashflow deficit for a while, but you know, it's the investments you got to make if you know where you're going."

Scott also shares an interesting perspective on scaling: 

"I would actually argue it's way easier to build a hundred homes than 10. I couldn't build 10 homes. I don't even know how to do that. Like a custom home, no idea, but if I want to go build a hundred homes, I totally know how to do that."

The conversation takes a