STRENGTH IN DIVERSITY Others in the industry agree that lines can be drawn, though they note that running an established business makes it more risky as well as potentially more rewarding to call clients’ choices into question.
“It’s a tough tightrope to walk,” says John Abrams of South Mountain Co., a design/build firm that is committed to sustainable development on Martha’s Vineyard, Mass. “There have been times, in the distant past, when we walked away from projects that truly threatened the flow of work, but we were much smaller then, and it took much less work to fill the gaps.”
In his 2005 book, The Company We Keep, for instance, Abrams writes of an anguished decision involving a wealthy client who wanted to build his dream house on a pristine hilltop: “We proposed to site the house beside the hilltop, so that the lovely area on top, capped with a huge glacial rock formation with a view, would be preserved.” The client wouldn’t budge, and Abrams and his partners ultimately decided that the job, as large as it was, wasn’t worth the compromise. “As it turned out, we were lucky, and another opportunity quickly filled the gap,” Abrams tells in the book. “We learned to trust our intuition when it told us not to risk the quality of our work in favor of security and growth.”
This happened many years ago, Abrams notes in 2008. “Would we do that now?” he asks hypothetically. “I can’t say, and I hope we never have to find out. Over 30 families depend on us for their livelihood.” Even so, he says, South Mountain Co. tries “to hold to a high standard, and [we] don’t put up with lip service. At the same time, we try not to be too doctrinaire, and we’re very friendly and understanding about it, but we’re also willing to walk away.” The key, Abrams says, is having a significant backlog of work, which the company has worked hard to build and to maintain.
South Mountain Co. is hedging its bets in other ways, too, including diversification. From 2003 to 2007, construction declined from producing 90% of the company’s revenue to 79%. By 2017, construction is projected to provide just 46% of revenue, with “value-driven” work such as solar and wind power, product design and manufacture, education, and consulting generating the rest, Abrams says.
BIGGER ISSUES In Orlando, Fla., Victor Farina has found himself on both sides of the luxury divide. Farina & Sons, the company his father started in 1950, builds in expensive older neighborhoods that are policed by historic review committees and that have stern restrictions involving matters from tree removal to stream setbacks. “I have never done anything that was environmentally insensitive,” Farina says. “But whether a home is too large or unpleasing for the lot is not really up to me to say,” he adds. “If the owners want a more palatial estate and can afford it, that’s their prerogative.”
Recently, in fact, Farina ran into a permit delay on a 2,500-square-foot addition because a neighbor complained to the building department that the home was too big for two people. The authorities ruled in Farina’s favor, but the situation was typical of one involving “people who feel they’ve seriously got to pry into other people’s business,” he says. Adding insult to injury, the project greatly improved the property and was “architecturally correct” for the neighborhood, he says.
On the other hand, Farina knows that some homeowners “have the attitude that the more it costs, the better it is.” In his market, this includes impact-resistant-glass windows (for homes that are 3 miles inland), certain types of travertine marble, and structured wiring “so complicated that you need a lesson every two months in how to operate it,” he says. In such cases, he feels his best response is to educate clients that the investment may not, in fact, pay off when they sell, and that the better evaluation criteria might simply be whether they’ll enjoy or take comfort in it.
In the end, the patience to counsel often pays off with lifetime clients. For instance, Cheng says his company rarely gets what he considers “repeat business,” though it’s not uncommon for clients to call him 10 years after he remodeled their kitchen. They still love it, they tell him, and they’re ready to make a similar, lasting investment elsewhere in their home.
Leah Thayer is a senior editor for REMODELING.
Don’t Supersize It
Remodelers whose revenues grew commensurate with the increasing square footage of the homes they created in recent years might want to think small.
A mounting body of evidence suggests that consumers are losing their appetite for McMansions, despite (or often because of) their supersized footprints and exurban landscapes. Their emerging preferences favor smaller, detail-rich homes in walkable, densely knit urban neighborhoods.
Teardowns, for instance, are facing stiff resistance in a growing number of communities. Building permits hit a 16-year low in February, even as remodelers in some tightly packed urban areas are as busy as ever.
A compelling argument appears in the March Atlantic Monthly. In “The Next Slum?” Christopher Leinberger writes that the U.S. housing market is undergoing a structural shift symbolized by rising foreclosures and crime rates in low-density, car-dependent suburbs, countered by price premiums for the convenience and culture of urban living. He adds that many newer homes lack the structural integrity to survive remodeling, in contrast to older city homes that proved “tough enough to withstand being broken up into apartments, and requiring relatively little upkeep.”
To meet demand for city living , some suburban developments might be repurposed entirely. In one extreme scenario, Leinberger writes of housing in a 20-block new “downtown” outside Denver that “commands a 60% premium per square foot over the single-family homes in the neighborhoods around it.” Previously on that land? A shopping mall.