The Wall Street Journal, September 2016
Source: The Wall Street Journal
Author: Katy McLaughlin
REAL ESTATE HOMES
The Home Renovation That Never Ends
A look at homeowners—both procrastinators and perfectionists—who take years and spend buckets of money on home improvements
When Halle and Casey Cane bought a $2.73 million Edwardian-style home in San Francisco four years ago, they just had small upgrades in mind.
“We initially moved in thinking, ‘We don’t need to do anything” other than a few tweaks, said Ms. Cane, 39.
Four years and $1 million later, they’ve “touched every inch of the house in some way,” said Ms. Cane. They’ve redone the basement, the den, all the bathrooms, the closets and upstairs bedrooms. They refinished kitchen cabinets in gray and then painted them white. They spent $50,000 adding foliage to the backyard, but are currently spending another $25,000 to remove it. After that, they’ll be done renovating—maybe. The idea of expanding the footprint by 500 square feet “is still in the back of our heads,” said Mr. Cane, 39, a real-estate investor and ski blogger.
Most homeowners dread the prospect of a long renovation, where countless weeks or months are spent washing dishes in the bathtub and sleeping in the pool house. But a small number of homeowners—whether they’re procrastinators, perfectionists or just on a tight budget—take years and spend scads of money on home improvements. Eventually, they get their dream space, but endless renos can take a toll on remodeling professionals as well as residents.
Julia Buckingham, an interior designer in Chicago, spent an average of 20 hours a week for about two years working on this 1895 Italianate mansion in Wicker Park.
In April, interior designer Timothy Corrigan walked away from a contract to design and furnish an estate in Beverly Hills that his clients bought three years ago for more than $27 million. The reason? He lost hope that the owners, whom he declined to identify, would ever make up their minds.
“I had been on it for over a year and a half, but it was dead in the water,” said Mr. Corrigan, who has offices in Los Angeles and Paris. “I even burned sagebrush in the house to try to get it moving,” he said, referring to an American Indian cleansing ritual. Despite his call to the spirits, the homeowners first decided to add three new bedrooms, then changed it to five, then went back to three. Mid-design, they announced they wanted to add a new building on the property that would house a spa and gym. Later, they scrapped that and opted to include those elements in the main building.
“As a designer, 80% to 90% of my income is from the furnishings,” Mr. Corrigan said. Three years after the property was purchased, it sat gutted and empty, he said. Last month, Mr. Corrigan said the clients asked to rehire him. He agreed, he said, on the strict condition that “we agree right now what it is that we are adding,” he said.
The majority of an interior designer’s revenue comes at the end of a project from upcharges on furniture, typically by about 30% over the trade price, said Alan M. Siegel, national counsel to the American Society of Interior Designers. Most interior-design contracts also include other compensation, such as a design fee or an hourly rate for certain kinds of work, such as site visits and installations, Mr. Siegel said.
By contrast, nearly 65% of architects charge flat fees—some with “reimbursable expenses”—according to a 2016 survey by the American Institute of Architects, a Washington trade group. As a result, architects typically get most of their compensation during the design and construction phases, said Dawn Zuber, an architect in Plymouth, Mich., who is chairwoman of the Custom Residential Architects Network for AIA.
TIME IS MONEY
Average time to complete home-improvement projects in the U.S.
Roof job: 45 days
General remodel: 53.4 days
Deck / porch / patio: 60.2 days
New addition: 78.2 days
Source: BuildFax analysis of a sampling of permits within the past year. Note: Timeframes cover when the permit was issued to the date the permit was marked as completed.
Remodeling companies—the builders—offer fixed-price contracts 90% of the time, estimated Dan Taddei, director of education and certification at the National Association of the Remodeling Industry, a trade group in Des Plaines, Ill. Only 10% of the time do they charge for their time, Mr. Taddei said. Since homeowners usually pay the builder in phases, construction companies have a long wait when projects take forever, Mr. Taddei said.
Even the most expensive renovations are usually completed in well under a year, according to Holly Tachovsky, founder and chief executive of BuildFax, an Austin, Texas-based firm that provides property condition data. The top 10% most-expensive residential remodels take an average of 277 days and cost an average of about $365,000, according to a BuildFax analysis of permits within the past five years.
Historic restorations are among the most time-consuming projects, remodelers say, requiring permitting, negotiating with landmark and preservation societies and hunting down specialized materials and craftsmen.
Julia Buckingham, an interior designer in Chicago, got a call in 2012 that began with the client saying, “I’ve got this little project and your name came up.” The “little project” turned out to be the restoration of an 1895 Italianate mansion on a third of an acre in Wicker Park. Renovation had been under way for three years by the time Ms. Buckingham got involved. She soon devoted about 20 hours a week to the project for two years.
One particularly painstaking task was restoring an original ceiling medallion and then searching the world for a modern-style chandelier to be inserted into it. Ms. Buckingham found an ideal one in Germany.
“I recall plotting the height and width on the metric system with someone in Germany who had a thick accent,” Ms. Buckingham said.
Also time consuming: finding a British craftsman who could re-create the original pattern of Victorian-era tiles in the front foyer.
Tracy Vaught and her husband, Hugo Ortega, who renovated their 4,700-square-foot brick Tudor in Houston, knew exactly what they wanted to do to the house. Their problem, however: Pulling together the $1.45 million in cash for their top-to-bottom overhaul. The process was an eight-year ordeal that involved sleeping in the living room for a year and showering at their country club, plus a subsequent year of eating in restaurants while their kitchen was gutted.
Fortunately for the couple and their teenage daughter, they own the restaurants. Ms. Vaught, 61 is the president of H Town Restaurant Group, which owns Backstreet Cafe, Hugo’s and Caracol. Mr. Ortega, 51, is executive chef for the group.
Because “you never know what can happen in the restaurant business,” Ms. Vaught said they refused to take out a loan to cover their renovation costs, which would have allowed them to attack the house in one whack. Simply selling and buying another, already fixed-up house was also out: Ms. Vaught had purchased the home in 1994 from her mother, who bought it from her own mother, who lived there with Ms. Vaught’s great-grandmother.
“My daughter will be the fifth generation of women in this family to live in this house,” said Ms. Vaught. “I’m never moving out.”
Instead, the family took on the project in phases, which began in 2008 and were finally completed in October last year. Changes included adding a pool, expanding the house by 500 square feet, removing walls, adding closets, redoing six bathrooms and gut-renovating the kitchen. Ms. Vaught said that while the process “did wear on us,” her husband “never complained.”
Beyond budget busting, homeowners have good reason to fear long renovations: Remodeling appears to have deleterious effects on relationships, too. In an online survey by the home-décor website Houzz, 7% of the 1,739 respondents said they considered couples counseling, another 7% wondered, “How did I end up with this person?” and 5% said they considered a breakup or divorce during their remodel.
The Canes in San Francisco said their renovation dragged on in part because their family has grown—they had their third child in May—and their needs changed.
The couple said they were able to travel during the most construction-heavy phases, and that their designer, Rusty Wadatz, smoothed over many speed bumps. But they both said the outlay of money was stressful.
“I’d be lying if I said there weren’t any arguments,” said Mr. Cane.