Built To Last: How Family Names Endure Homebuilding's Cycles

A too-common self-deception of the moment is that this time is different. This simple mistake frames challenges and opportunities alike in homebuilding and placemaking as uniquely defined by how the business community’s leading characters and their teams act now to navigate the differences and ward off threats that never apparently existed before.

And do it in a hurry. Or else.

Still, so many of those leading characters, many of them with their own or their families’ names one and the same as their small, medium-sized, and enterprise level firms, experience now – its harrowing risks, its roiling uncertainties, its existential possibility, and its shimmering, irrefutable rewards -- as part of a very long now.

A déjà vu now. One that took root decades, even generations ago, where today’s players are participants in an epic multi-century experiment, both constantly evolving and yet uncannily rhyming with the up and down parabolas of homebuilding and development’s past that have come to be known as housing economics’ cycles.

On occasion, either an individual firm or the business sector writ large gets to believing housing’s cyclical rhythms and rules no longer apply. New technologies, novel finance practices and policies, demographic heft, or emerging cannier models to manage capital investment on access to real estate all hint at ways to break with and escape the grip cyclicality holds over their ability to amass fortunes and their likelihood of losing at least some of them.

For some – like Atlanta-area, just-turned 75-year-old residential development brand Chatham, and its homebuilding brand Chathambilt, and its three-generation, deep-seeded reputation and legacy of a family’s connection with 6,000 people’s homes and 150 of their metro-area neighborhoods -- now is not so much about eluding the rules of the cycle so much as it is determining humbly to accept its laws along with its own nuances, quirks, tricks and ultimate effects.

We do want our houses to stand the test of time,” says David Chatham, president and CEO of Chathambuilt Homes, who in the 1960s as a nine-year-old, regularly got dropped off by his dad at one of the job sites, with the trim carpenters or to sweep the houses. "I was down at Harmon Road in Buckhead last week do a video shoot, and those houses, built from 1948 through 1955, look terrific. They really aged well. I ran into some of the homeowners down there. They love their homes. They love the history that we've had multiple generations buy our homes – the grandfather, the father, the grandson. Three or four generations of families have bought our homes. Number one reason is our quality, and number two, we put our name on everything. In fact, we have a plaque that says Chathambilt homes that we embed in the concrete floor and we try to stand behind those homes. People say what's your warranty, and I say, ‘you know, we just try to take care of this home for you.’”

People like David Chatham and his father Howard, who founded the company as a boot-straps builder in 1948, and David’s three sons who’ve each taken a role in managing the company today, know full-well that what brought them success in the past will not assure them prosperity in the future. For them, acceptance of the mechanics of economics ebb and flow should and would never be confused nor conflated with passiveness, resignation, surrender. Quite the contrary. Cunning, character, and an ability to bend-but-not break tend to be why a family-name branded homebuilding firm can stick around for three quarters of a century and three generations with what looks like plenty of juice left in the tank.

What’s so meaningful about the Chathams’ story is that it’s colorfully and richly a personalized family saga story across generations, and that at the same time, it shares its origin and narrative elements, its principles and its business resiliency with scores of such stories, such families, such strength of fabric and such critical importance in forming and nurturing tens of thousands of communities and millions of homes in every geography in the U.S.

You can hear it in David Chatham’s telling, that faint sense that you may have heard it before, and may be likely to hear it again, so essential is it to how homebuilding in America as we know it came to be. Even with details that may differ in place and circumstance from the stories of many young people returning from the War To End All Wars in the 1940s, a kind of universality comes through in the words Chatham – a storyteller – lets flow:

This is our 75th anniversary and we're very proud to be here,” says Chatham, whose father told him to show up at job – River Shore Estates – in Sandy Springs at 7 am the day after he graduated from the University of Georgia in 1972. “My dad Howard Chatham's story is pretty interesting. He grew up what we call old Milton County, which is really the northern part of Metro Atlanta. Howard was born in 1921, and was raised during the Depression. My granddad was a sharecropper, and four or five generations of farmers had grown up in that area. Dad was drafted into the World War II, served in London during the years London underwent constant bombing. He came home, and in 1946 met my mother, and shortly thereafter they were married.

“In 1947, dad was able to get a job with Fulton County, the county seat of Atlanta as a surveyor on a survey crew. He was not actually an engineer surveyor, but he worked on that crew. My mother was working with the Secret Service at that time, in downtown Atlanta. She had a long drive so they decided they wanted to build a house closer to their jobs.

“Now, my mother's Uncle Bobby Harmon owned some land in that northern Buckhead area of Atlanta. My dad talked with him about buying a lot. He said, ‘if you'll let me buy this lot, I'd like to build a house and I'll pay for the lot.’ So dad, with the help of a lot of friends and family from the farm, worked afternoons, nights, weekends building that house. It's always interesting to me he would talk about how he would drive my granddad's mule cart on the old Roswell road. It was a dirt road at the time, which is an extension of Peachtree Street. He took an old scoop and scooped out the basement with a mule, and literally did everything pretty much himself by hand. He and my mother worked extremely hard. She helped clean up and do what she could, like shine the lights of the of the old pickup truck in the basement while dad was digging footings, laying block and dug their own well. They were pretty good carpenters on the farm back then because they had to build their own barns and houses.

So our first house was on Harmon Road in the northern Buckhead area. Within a short time of finishing, however, a young family by the name of the Bradford's came along and said, ‘Howard, would you consider selling this home? My wife and I've been watching you build it, and we'd really love to live here. What would you want for it?’ So dad said, ‘I don't think we can sell it. My wife and I worked so hard, along with all my friends on the farm to build this. We just don't want to sell it.’ But Bradford insisted. So dad talked to my mother and said, ‘look, why don't we sell it? We'll give him a price if he takes it, we'll ask if we can rent the basement, buy the lot next door, and I'll build you another one.’ So, I guess my mother reluctantly agreed to that. And the same thing happened again and again. And I came along a few years later. Dad was still building on that same road. The rest, as they say, was history. There was no such thing back then as speculative housing, so he’d tell the lumber, concrete and the block companies, ‘look, if you'll just stay with me, I'll get this house sold and I'll pay you as soon as I close it. And he was persuasive. Those companies began to agree and say, ‘Yeah, we'll trust you to do that.’”

With financial help from his own father Fred, Howard Chatham quit his Fulton County job as a surveyor and plowed his being into learning and practicing homebuilding, and expanding as well into varied horizontally-related fields, from hardware retail stores, to grating, building materials, plumbing, electrical, lighting, carpeting and floor-covering, decorating and appliances. In the rush of growth across these operations, Howard got out over his skis with speculative new-home inventory in the mid-1950s.

He decided he was going to have to start his own real estate brokerage company,” David Chatham said. “So, he started a company called Northside Realty Associates, hired four to six ladies, and rented a storefront down on Peachtree and Piedmont Streets in Atlanta. Within a matter of months, they had sold all of his inventory. And these ladies already had business you know when he hired them, so they were selling other homes and other places and the company began to grow. My dad later hired a gentleman by the name of Ed Isaacson who managed Northside. My dad continued to build and develop and later Ed’s son Johnny Isakson, who became our US Senator for Georgia, ran the company as well. Northside grew to be one of the largest independent brokerage companies in the country. We sold it in 1991.”

After a five-year non-compete hiatus, David Chatham – all the while continuing Chathambilt’s new home construction and residential development activity – re-entered the real estate brokerage business with the purchase of a Keller-Williams franchise for North Atlanta. That business has flourished as well, growing to three offices – Alpharetta, Roswell, and Johns Creek – and 1,500 agents.

Market cycles, and adapting and transforming to withstand their turbulence, has gone with the turf all along, says Chatham. Each spell of adversity came with its struggle and its lessons, and ultimately, its secrets to surviving a worst-case scenario.

David Chatham recalls:

As my dad got older and wanted to slow down, I told him, ‘Dad, why don't we change our model and bring outside builders into our neighborhoods?’ At the time we developed only what we built. We were the only builder in those neighborhoods, taking all the risk. Like every builder, we'd had some tough times we've had some close calls and just kind of got through those. I thought it would be a good way to diversify our risk by bringing in others and not having the entire debt in our name.

“That was a great model at the time back in the 90s and 2000s,” says Chatham. “At the time of the recession in 2008, we had 15 neighborhoods and 51 independent builders building in those neighborhoods. Different builder groups in different places in different phases. We did the marketing as well at the time, and it had proven to be a great model. The Great Recession hit and I thought I was pretty smart that I had all these builders and they wouldn't all go down. But little did I know that within 24 months, nearly every builder we had really was unable to go forward. It was a tough time for us. We had to work through it. I had all of those lots that were sold at the time in those neighborhoods. No one could really close on much of them. I had to work my way through with each bank and each situation. It was the grace of God, I guess, that we're here. I didn't have to declare bankruptcy or have any type of judgments or liens to carry forward. We just worked our way through it one at a time and we're very blessed to do that.”

In the face of who-knows-what, David Chatham, son of Chathambilt’s founder Howard, who in turn was the son of a sharecropper Fred, feels that come-what-may, he and his sons – Gabe (land acquisition and development), Miles (design and digital marketing), and Lance (construction) have a resilient, adaptive model and a name backed by enormous trust capital.

I've just let them each bloom in the area that they were talented and gifted in and what they enjoy and so far that's worked out very well,” Chatham says of working with his sons as he had with his own father, who'd done the same for him. “Together, we have our Keller Williams businesses, and they have a team called the Chatham Company that does marketing that they all three participate in. We do really three or four basic things –were still buying developed lots and land for both ourselves and for the builders; we list and sell our homes, our land our properties through our Keller Williams business. The original business, building homes, is really still kind of the cornerstone of what we do Chathambilt. These homes tend to be high end luxury, primarily in Alpharetta and Milton area. And then we have I have three joint ventures currently with we're in: The mortgage business, two title companies, and we’ll soon be in the insurance business. So we tend to get integrated again into what we know and what we love. And so yeah, that the boys are very, very integrated into the business and candidly are running it day to day where I add value is finding new properties, helping things get entitled through zoning, etc.

I give them a hard time, telling them, ‘it’s the third generation that always messes up these family businesses, so I'm counting on you guys to keep this going.’”

From David Chatham, you’ll hear character and cunning, and a resolve to take tricky or turbulent conditions on their own terms. You won't hear talk that this time’s different, or that finally the housing economy has busted free of its natural cyclicality.

We've had to adjust our model to where the market is or where it’s headed and we've adapted well,” Chatham says. “What helps us keep doing that is our core philosophy: Our faith, family and then business. I remind my boys and all these team member, ‘you need to keep that in the right order.’ You know, sometimes we get one or the other a little out of sync and but that's our core value. Faith, family and business, in that order.”