Epcon Communities, 40 years in, charts new pathways to growth

Ohio-based Epcon Communities, a leader in the active adult segment, celebrated its 40th anniversary this year, while positioning itself for continued expansion amid strong demand from lifestyle-driven 55+ homebuyers.

Phil Fankhauser and Ed Bacome founded the company in 1986, focusing on low-maintenance, single-story living for the erstwhile 55-plus “Silent Generation” demographic cohort.

Since then, the company, combined with its dozens of franchise builders, has delivered over 40,000 homes across the country, most of them to Baby Boom buyers, and a good few now from the vanguard of Generation X. 

Epcon Communities CEO Joel Rhoades sat down with HousingWire’s The Builder’s Daily to discuss the company’s core focus, the franchise model, recent expansions and the next phase of growth. 

A focus on the active adult segment

The builder specialises in delivering communities that are targeted towards or restricted to the active adult, 55+ segment. Those buyers, who are typically more established and have built up equity, tend to be more resilient to broader economic uncertainty and mortgage rate volatility. 

“Our buyers are not immune to what’s going on in the market, but they are resilient. Many of them are existing homeowners who have built a lot of equity over time in their homes. While the interest rates and overall economic uncertainty affect what’s going on, our buyers are really making a lifestyle-driven decision, not a payment decision or a budget decision, as much as some other segments of the population,” Rhoades said. 

This resilience, Rhoades said, has helped keep Epcon’s need for aggressive incentives to a relative minimum, despite broader homebuilding trends. 

“We had a great April. May is off to a good start. I see a lot of builders offering incentives, but we’re really looking at very select opportunities, just where appropriate [to use incentives]. Those are really more tools to facilitate transactions than they are broad-based incentives like we’re seeing from some others,” Rhoades explained. 

Epcon benefits from catering to a resilient buyer segment. But customer-segment positioning alone isn’t enough. On a high level, the builder attracts lifestyle-driven buyers, with apartment-style amenities such as clubhouses, gyms and pools. 

At the individual-house level, Epcon emphasizes outdoor living as a crucial component of each home’s appeal. In a competitive homebuilding market, Epcon sees well-manicured, private outdoor spaces as a differentiator from many public production builders.  

“All of our homes feature a great outdoor courtyard, and that’s a really important part of each home. It creates usable outdoor space with a level of privacy that’s really hard to find in a lot of traditional homes,” Rhoades said. 

A peek inside the Epcon Franchising model

Epcon Franchising, the company’s franchise model, has been a key component of Epcon Communities’ growth for more than three decades. The company partners with more than 60 franchise builders in over 20 states.

Franchising enables Epcon to expand into markets that it otherwise wouldn’t be able to on a corporate level, with builders that have local expertise. 

“It really creates a lot of alignment, building these same homes targeted towards active adults in a lot of markets where we will never get to corporately. I think it’s worked really, really well,” Rhoades said. 

The franchising business, which operates like a traditional franchising structure, grants regional builders the opportunity to leverage Epcon’s brand and resources. 

“The builders, in return for a royalty fee paid to us, are given the rights to use our development system within an exclusive territory in the markets that they’re in. Those franchise builders use our copyrighted architectural plans, our branding, our marketing, our purchasing relationships and our operational expertise, and they couple that with their local market knowledge and experience,” Rhoades explained. 

Market expansions and lessons learned

On a corporate level, excluding the franchise business, Epcon Communities operates in six markets in five states. The builder started in the Columbus, OH market, where it still maintains a corporate headquarters today. The company has also had a corporate presence in North Carolina, specifically Charlotte and North Carolina, for over twenty years. 

The builder greatly expanded its corporate operations in the years following COVID. This included expansions into Indianapolis in 2021 and Atlanta and Nashville in 2022. Rolling out new divisions in three markets consecutively, Rhoades said, takes a lot of patience and a lot of groundwork.  

“I think one of the biggest lessons we’ve learned from that is, we’ve got to have local execution. We’ve got to be patient. We’ve got to understand the buyers in each one of those markets, the regulatory environment and the contractor and supplier dynamics in each place. Site selection is so very important for us. We’ve got to be in the right parts of town where our buyers want to be, and that takes a lot of effort and a lot of focus. Some of those neighbourhoods aren’t the easiest ones to go through the entitlement process in, so that takes time,” he explained. 

Next iteration of growth

Last year, Epcon Communities delivered just under 600 homes, along with a bit more than 600 additional combined deliveries from the franchise builders. Going forward, Rhoades expects more growth from the franchise model, with corporate growth in existing markets. 

“We’re really focused on the markets that we’re in. There is so much potential. The demographics are so strong in each one of the six corporate markets. We see tremendous opportunity in every one of them, and we’re fortunate that the demographics are so strong. Active adults, as you know, are well-positioned to buy homes today, even when some of the other segments of the home line market aren’t,” Rhoades said. 

As Epcon Communities marks 40 years in business, it has also stepped into an advocacy role, joining other builders and trade organizations, such as the National Association of Home Builders, to advocate for housing reforms at the federal, state, and local levels. These reforms include the 21st Century ROAD to Housing Act, along with a wave of state and municipal housing bills. 

The company recently hosted Senator Jon Husted (R-OH) in its corporate headquarters, and Nanette Pfister, Epcon Communities’ Vice President of Public Affairs, has travelled to Capitol Hill to have discussions with members of Congress who represent Ohio. These advocacy efforts have also been focused on the state and local levels, particularly in Ohio and the other states and markets where Epcon Communities operates. 

“This is an area that many builders don’t have the time or the resources to get involved in, so I’m grateful that Joel and our owners have taken that very seriously,” Pfister said.