The Urge to Renovate

Daniel McGinn - Boston.com
Published: February 24, 2008

Are we overhauling our houses because we want to one-up the neighbors? Or because we deserve better? Even soft real estate market isn't stopping homeowners from covering tricked-out kitchens, mater baths, wine cellars, and home theaters.

A Bluestar range is one of the highlights of the renovated kitchen in Paula Ito's home.

ON A BLUSTERY FEBRUARY MORNING in 2005, a tall orange excavator labors over a growing hole in Paula and Mark Ito's Newton backyard. A few days later, a concrete foundation lines the hole, and a team of framers begins pounding together the skeleton of the home's addition. By the time the project is finished, they'll have a new family room, mudroom, laundry, master suite, and a radically expanded kitchen. Their 1931 Dutch Colonial will have increased in size by more than half, to 3,385 square feet. And if they stick to their budget, they will spend about $360,000 on the renovation – as much as Paula originally spent to buy the home in 1996, before they were married. They believe it's a smart investment. Before they began the job, an appraiser told them their house was worth around $800,000.

By the time they finish, its value should top $1.1 million.

It's a breathtaking number, and whether consciously or not, the Itos drop their voices a few decibels when they talk about it, as if they're a little embarrassed that they'll soon be living in a home whose value runs to seven figures. “I grew up in a ranch with one bathroom, and Mark grew up in a house with two baths, but it wasn't huge,” says Paula, a medical equipment saleswoman. “Now all of a sudden we're building this dream house.” But all around them, their neighbors are doing – or have already done – the same thing. As the Itos' job gets underway, a big renovation across the street is just finishing up. New windows sit outside a different home across the street, awaiting installation. Their architect has designed additions for three other houses within sight of the Itos' residence. Everywhere, a young generation that grew up in cramped postwar houses is adding luxurious master suites, oversize mudrooms, marble bars, and gourmet kitchens. As Mark, an English teacher at a nearby middle school, stands outside one evening on the exposed plywood floor of what will become his master bedroom, neighbors walking by yell up to him, offering congratulations and encouragement.

The Itos realize that no matter how smoothly the job goes, the months ahead will be stressful for them and their two young children. They'll be without a kitchen, eating off paper plates. They'll have no room to entertain friends. They'll be writing five-figure checks, using borrowed money, at an alarming rate. In short, they'll be entering the life stage that's become known as “renovation hell.” It's a time when couples are prone to bicker (and sometimes even divorce), when homeowners can feel torn between the desires of their architects, their builders, and themselves, and when there's so much potential for anxiety and conflict that some family counselors have begun to specialize in a hot new specialty: treating renovation-addled clients.

No matter how difficult the next few months become, the Itos will have lots of sympathy, because everyone they know seems to be renovating, too. “There's this sort of sense of camaraderie, because we're all going through it,” Mark says.

“Our kids and our home renovations are the two biggest topics we talk about when we're with other families.” He looks down at the architectural drawings spread over their dining room table. “I remember being single and talking to people in their 30s and thinking how boring it was that they talked about renovations and Home Depot. But now we bring these drawings out at parties and people are like 'Let us see.' ”

ON DINING ROOM TABLES ACROSS AMERICA, THE architectural plans have been multiplying. In 2005, Americans spent roughly $180 billion on home remodeling, according to Harvard's Joint Center for Housing Studies. At the height of the real estate boom, those expenditures were growing by more than 20 percent a year. That frenzied pace has slowed a bit as real estate prices have shifted into reverse. In 2007, according to the Warren Group, a real estate publisher, the median home sales price in Massachusetts fell 4.6 percent to $310,000. Nationwide, according to the Harvard researchers, renovation expenditures fell an estimated 2.3 percent in 2007, and will continue to decline in 2008.

But in places like Newton, with an older housing stock and plenty of affluent homeowners, dumpsters remain in plenty of driveways. Some of the contractors toiling in those homes are making necessary repairs – fixing a roof or replacing a furnace, say. But even in a housing bust, plenty of Newtonites are still doing “discretionary” remodels that let older homes boast some of the features – like family rooms and master bathrooms – that either didn't exist when the houses were built or were only considered proper amenities for upper-class housing.

Most of these remodels are driven by basic changes in family size or economics. A family has a third child and needs a new bedroom. A baby boomer inherits money and decides to redo the kitchen. But beyond those basic motivations, there's a complicated psychology that drives these pursuits, and there's a small contingent of academics who try to better understand why we covet closet organizing systems, wine cellars, and home theaters. Their theories fill dissertations, but to simplify them a bit, the experts see three main things that account for the contractors' pickups that fill so many suburban driveways.

Some of these experts continue to cite the longstanding theory that home remodeling is mostly about keeping up with the Joneses. “The relentless status-seeking of the boomer generation has created something of a permanent state of fix-up fever,” writes June Fletcher, who covers real estate for The Wall Street Journal and has seen remodels that featured hand-embroidered wall-to-wall carpeting, car-wash-equipped garages, life-size Broadway-style stages for kids' playrooms, underwater stereo systems for swimming pools, and gold-plated gun safes.

There's no doubt many of us have our friends at least partly in mind when we start tearing out walls. Life doesn't often resemble a television show, but for a generation that's become accustomed to watching the climactic “reveals” on shows like Extreme Makeover: Home Edition, people whose homes undergo a renovation can't help but imagine how friends will ooh and ah at their own post-makeover space.

And in this Jones-beating-Jones competition, housing has become the weapon of choice. Boston College economist Juliet Schor points to homes (along with clothing and automobiles) as a key element in “the visible triad,” that trio of possessions that is most evident to the people we meet and factor most heavily into how we assess status. The idea that we spend money partly in an attempt to aff ect how others view us has been around at least since Thorstein Veblen coined the phrase “conspicuous consumption” in the waning days of the 19th century.

But in the 21st century, when outlet stores and credit cards give nearly everyone access to designer clothing, and cheap lease deals can put middle-class people into luxury cars, our homes have emerged as the primary arena for this one-upmanship.

There is a subtle, modern twist on this theory, however. It's a view best articulated by Cornell economist Robert Frank, author of Luxury Fever, and it's a theory I've come to think of as the “I've earned it” hypothesis. Frank believes people spend big money on visible goods like watches, cars, or kitchen remodels not only to impress and compete with friends but also to treat and comfort themselves. After seeing a friend's recent acquisition, we can't help but tell ourselves, “I'm just as accomplished and just as deserving.” Frank believes that even people who eschew materialism and don't give a damn about the Joneses can't help thinking, “He has something nicer than me, and I feel bad about it.” So when we get out our home-equity checkbook and start calling contractors, we're not just aiming to impress people. We're doing it to treat ourselves right.

We're also doing renovations, theoretically at least, for the people who'll buy our homes someday.

Resale value – the third big driver of renovation projects – has always been a factor in the urge to upgrade our habitat. Most of the things we buy depreciate and wind up in a dump, but the fact that our houses appreciate and are eventually resold adds a fair bit of complexity to every decision we make about them.

Deciding to plunge into a big renovation is a complicated exercise. Some buyers, like the Itos, begin the mental process of imagining how they'll reconfigure spaces from the first moment they walk into the house they wind up buying. It's a behavior Harvard economist Kermit Baker, who studies the remodeling market, sees more frequently today. “A lot of households buy a home, and within a month or two have sort of a 20-year time horizon in place – 'We'd like to do this and do that,' ” he says. The fact that these wish lists usually go far beyond whatever money or energy the homeowners have to spend is why so many houses today seem to be in a near-constant state of renovation. As soon as one project ends, it's just a matter of paying off the Home Depot credit card before the next one begins.

AS THE ITOS' RENOVATION UNFOLDS, THE most unexpected stress comes from being buff eted by a stream of decisions that need to be made quickly. No matter how complete the architectural drawings are, lots of things get figured out on the fly. “The number of decisions you need to make to keep the contractors and subcontractors going is very hectic,” Mark says. “And each decision seems to aff ect some other decision in the house, and every decision seems to be more urgent than the one prior to it.” At one point, when Mark is on a trip to California and the contractor needs a decision made right now, Paula resorts to frantically e-mailing Mark digital pictures of some cabinetry to try to get his input without holding up the job.

Mark's other big concern is security.

While the Itos are comfortable with their builder and his workers, a couple of months into the job, a larger group of subcontractors whom they've never met is on-site.

Mark recalls that the Boston Strangler was a handyman whose work routinely had him visiting suburban homes just like this one.

“I'll be happy when it's all over, so we don't have this flow of people,” he says.

The biggest stress, of course, is money. If the Itos' home hadn't doubled in value since its purchase, they never would have attempted a job like this. The fact that the mortgage industry has made it so easy to liquidate that equity is one reason millions of other families have renovated their homes, too. At the height of the refinancing boom, in the middle of 2003, Americans refinanced $1.6 trillion in mortgage debt in just six months, with most pulling cash out to pay down credit card debt or make home improvements.

The Itos' renovation is supposed to be finished in August 2005. But a few days after Labor Day, work continues. There's tile awaiting installation in the upstairs master bathroom. The family room lacks carpeting. The walls require touch-up painting. By October, the family hopes, the builder should disappear from their lives.

The kitchen is finished, however, and it's stunning.

The dark wood of the custom cabinetry looks handpolished, and the drawers open and close with soft precision. Undercabinet lighting casts a warm glow onto the Giallo Ornamental granite, imported from Brazil; the light highlights the way the granite complements both the cabinets and the earth tones in the tile floor. The new stainless-steel appliances are sparkling and smudgeless. Mark moves to the Bluestar range and flicks on one of the 22,000 BTU burners.

The cobalt flames dance.

The renovation comes with a big price tag. Originally, the Itos planned to spend $360,000. As the job nears completion, they're $80,000 over budget.

They rattle off a long list of items . including extra windows and a huge painting bill . that led them to overspend. But on the north side of the family room lies another reason. A big mass of wires dangles from a hole in the wall, which also has speaker cutouts and an electrical outlet mounted at eye level.

Mark smiles, describing the 42-inch high-definition LCD television that will be mounted there soon. It will attach to a sound system that features speakers located in ceilings throughout the first floor. The audio-visual equipment has added about $12,000 to the job. The couple debated this expense long after most big decisions had been made. On July 4, 2005, while driving home from a vacation in Maine, Mark and Paula got into a loud argument over the flat-screen TV. From the back seat, their son, then 5, told them: "Guys, you have to calm down." Ultimately, Paula decided that she had gotten so much of what she wanted out of the renovation that Mark deserved to get his way with the television.

As the job wound down, the Itos already sensed that a small part of them would miss the excitement of seeing their home transformed a little bit each day. For one, they'd miss the decision making, as stressful as it was at times. "What are we going to talk about now that this is done?" Paula wonders.

Now, two years after their contractor began transforming their home, the Itos are thrilled by how the project turned out. In the unrenovated house, their kitchen was small and closed off . When they entertained, the couple either planned a menu that could be cooked ahead and kept warm, or one of them disappeared into the kitchen for the evening, spending little time with their guests. Now, with an expansive kitchen that opens onto the family room, the Itos and their guests mingle easily. On their first post-renovation Thanksgiving, they hosted 18 people. "The flow and the ability for everybody to be near each other, near where the cooking was and still watching the football game.– it was great," Paula says.

While their home no longer resembles a construction site, the 41-year-old Itos are reluctant to call their job done. They still need window treatments.

Their landscaping needs work to accommodate the new back door. They haven't put in a walkway yet. "Even when you're done, unless you complete everything, you're not really done," Paula says. So, sooner or later, the pickup trucks will return to their driveway – a sign that they're part of a generation for whom renovations have become not a one-time event, but a way of life.