The hot housing market has turned the Washington area into renovation central.
You've got your frustrated move-up buyers, who are busily hiring contractors to redo their homes because they can't find any other house they can afford. Then there are the many first-timers who are buying fixer-uppers just to get into the market. And, of course, there are Joe and Janet Homeowner, who haven't even thought about moving but can't pass up the opportunity to tap into their unbelievably elevated home equity for routine repairs or glamorous rehabs.
But the rush to redo has a downside. It has led to long lines for those trying to hire designers and contractors. And now there's a big pile-up at many local permit counters.
As a result, some families are learning that they'll have to hang on for a bit longer than they might have anticipated, contractors and builders say.
The wait may faze some, but others, such as Luis and Birgit Orozco of Vienna, say they have learned that their original expectations just might have been off base in these remodeling times.
Fourteen months ago, the Orozcos were anticipating the birth of a third child and contemplating buying a larger house. But they found that they couldn't afford to move up in their own neighborhood or anywhere else close in that they liked.
Instead of moving, they looked into renovating. In June they hired a Vienna company, Encompass Design/Build, for a "whole-house remodel." That approach, they hoped, would not only add a second floor to their 50-year-old rambler and update and reconfigure the cramped spaces, but also keep the exterior of the house in tune with the neighborhood.
The couple originally thought construction would be complete by the end of 2004, but work didn't even begin until this January, said Luis Orozco, director of engineering for a local software company. The schedule slipped, he said, in part because "my expectations were unrealistic -- there were a lot of details involved" and in part because the family had to wait a couple months just to get on the construction calendar.
It also took longer than he had estimated, he said, because variances from the town of Vienna had to be obtained "and that takes a couple months." And, he said, he didn't account for the impact of design changes the family wanted after seeing the plans evolve. The family now includes Nina, 4; Hannah, 2 1/2; and Tessa, 11 months.
But Orozco is still happy. The project is likely to be finished by the promised July 1 deadline, he said, and the contractor stayed on schedule even after the family added features.
Though the couple initially had some trepidation that they might be overimproving, they aren't fretting now, he said.
They paid $219,000 for the property in 1999 and are spending about $300,000 on the makeover. Tiny unimproved ramblers in the neighborhood are going for about $500,000, he said -- his would be worth much more.
"In our case, we liked our location, we liked our neighbors and we liked our neighborhood," Orozco said. "Because we hired this company, we'll be getting exactly what we wanted, designed exactly the way we wanted" at a price below the cost of new houses much farther out.
An unexpected bonus, the family says, is that the townhouse they bought last November to use while their house was under renovation has also appreciated significantly.
"We're turning out to be pretty good investors," Orozco said. "Since I purchased it and moved in, it's increased 20 percent in value."
Vienna is full of renovation, he added. "Within a mile of us, there are 12 to 15 construction projects underway, with a mix of teardowns, remodeling or new custom houses."
And it's not just Vienna.
The whole Washington area, chockablock with small houses built after World War II, is busily being redone, say contractors and architects. The housing market has been so strong, they say, that families can tap into their skyrocketing equity to remodel or to buy trade-up houses that they will want to renovate or tear down.
Waiting lists of a year are typical for some design/build companies because of the intense demand, said Anthony Wilder of Anthony Wilder Design/Build Inc. in Bethesda. But "people are throwing money at us," because they've made so much on their current homes during the past five years, he said.
"Lots of people are putting impressive amounts of money into their houses," said Mark Scott of Mark IV Builders in Bethesda at a recent remodeling seminar.
With prices in some parts of the Washington area doubling over the past five years, homeowners aren't hesitant about drawing out equity for renovations, Scott said. And they aren't afraid of the future either, he added.
In many of the communities where he works, houses typically cost at least $700,000. Buyers are "also paying another quarter of a million dollars to bring it up to their standards," Scott said.
"They don't have any money in the bank," he said, but they're not worried because they're counting on future appreciation. "They have a tremendous tolerance for risk."
Bill Mulholland, vice president of design/build and kitchen and bath at Case Design/Remodeling Inc. in Bethesda, said his firm will do more work this year than last. That's a pace second only to the height of the tech boom, when wallets were fattened by soaring stock prices.
Mulholland and Wilder agree that homeowners will have to adjust to the waiting game.
While they blame regulatory back-ups for part of the problem, they note that homeowners themselves have to shoulder some of the responsibility for those back-ups. The sheer number of projects awaiting review is slowing the agencies, Mulholland said.
"And part of the reason is that projects have become much more complex, more sophisticated, larger," he said. "Now we're reworking entire homes, adding much more space."
People also aren't content with simple upgrades, he said. Kitchens and bathrooms, the heart of the remodeling business, "are much more complicated" than they used to be. And throughout the house there "are more systems" that are interconnected.
Homeowners, meanwhile, have absorbed "false expectations" about completion times from home remodeling TV shows, said Peter Pagenstecher of Brenneman & Pagenstecher Residential Architects and Builders in Kensington.
"Those shows drive me crazy," he said. While they suggest that a project can be completed in days or even hours, "the amount of people that it takes to make that happen in that time frame is unbelievable," he said.
Back-ups at the permitting agencies are "killing everybody," said Wilder.
Even Montgomery County, which "has always been a great county to deal with, is taking six to eight weeks for a residential remodeling permit" compared with what sometimes took only a day to clear as recently as six months ago, Pagenstecher said.
The county "every year keeps adding additional requirements" that slow the process, he said. This year, it's topological requirements, he said.
Pagenstecher said he understands that the county is reacting in many cases to concerns by neighbors over the outburst of towering, sprawling "McMansions," and of large additions that seem to overcrowd lots. But he said he thinks the overlays of reviews may be excessive in some cases. And he said they're adding to homeowners' costs and thus to further price escalation.
Mulholland of Case Design/ Remodeling said: "We're seeing lead times for permits stretch out . . . everywhere. In Montgomery County, Fairfax, Arlington, D.C., the city of Rockville. There seems to almost be a spring season for permits, almost like the spring season for building."
He estimated that it's taking about "50 percent longer than last year" to get permits. "We're typically telling clients a permit for your standard remodeling project will take four to eight weeks. A couple years ago, we could basically count on getting it in two to three weeks."
Mulholland noted that jurisdictions have "amazingly complicated requirements." The city of Alexandria, for instance, "requires a rodent abatement program before they permit," he said.
Local permitting agencies acknowledge that they're under pressure to keep up. They say that they're just doing their jobs, including responding aggressively to complaints from neighbors over unpermitted activity.
Some jurisdictions are moving permitting staff from commercial to residential reviews because commercial activity has been slower. Prince William County is keeping up with growth in both new residential and commercial construction and in renovation permit applications by increasing the hours on a contract with a private engineering company, said building official Eric Mays.
Mays noted that homeowners can shorten their wait if they use licensed contractors who are eligible for online permitting.
In Fairfax County, the area's largest jurisdiction, renovation and alteration permit applications are up 41 percent from a year ago, according to Audrey C. Clark, director of building plan review and permits division. Builders have actually welcomed higher permit fees in hopes that that will eventually allow for more hiring.
There has been a similar increase in activity in Prince George's County. Applications for renovations and additions there jumped from 816 last year to 1,144 this year, says Sarah Bouldin-Carr, acting associate director for the county's permits and review division.
Loudoun County applications are up about 14 percent this year, to 3,514 from 3,091 for January through May 2004, but county officials say booming new construction is still the biggest generator of permit work.
While Montgomery County has seen permit times lengthen and is aware of contractors' complaints, "we're doing it as fast as we can, pulling staff from other duties to keep up," said Susan Scala-Demby, zoning manager for the Montgomery County department of permitting services.
Contractors have long complained about the permitting bureaucracy in the District. "D.C. is the pits," Mark IV's Scott said.
Unlike regulators in other jurisdictions, D.C. officials could not provide any statistics comparing permit activity with past years. But they said they are aware of concerns about delays.
The Department of Consumer and Regulatory Affairs has said that it is opening a permitting line this month just for homeowners, separate from big builders or contractors. Some suburban jurisdictions already have similar procedures.
Nationally, remodeling expenditures have grown at a steady rate for the past decade, but nowhere near what seems to be going on in the Washington area, say officials at the Joint Center for Housing Studies at Harvard University.
The increase in homeowner spending nationwide has been on the order of 5 percent a year for the past three years, according to the center's Remodeling Futures Program. In the 12 months that ended in March, it totaled $130 billion.
Both the center and the National Association of the Remodeling Industry, a trade group, predict renovation outlays will continue to grow, despite concerns about a possible downturn soon in the housing market. Their confidence, they say, is based on the big build-up of equity in homes and the expectation that Generation Xers and immigrants will generate strong household growth in the next decade.
For some, though, the bigger question is not whether they need an upgraded house, but whether to renovate or just start over.
David Tay and his wife, Choon Chin Tian, went on a recent tour of remodeled houses sponsored by the Remodelors Council of the Northern Virginia Building Industry Association, to get an idea of prices and design firms' work.
In an interview then, Tay said the couple hoped to sell their Fairfax townhouse soon and buy a larger, older house close in to rebuild or tear down or a new home farther out, but were leaning toward the close-in option to avoid longer commutes.
Their biggest dilemma, he said, was whether to invest the $350,000 to $400,000 required for a whole-house remodel. "We've done our research, so we know that's expected," Tiansaid .
This week, the couple had made a decision, sort of. "In the end, we're actually buying my parents' house in McLean and we're going to demolish and rebuild," Tay said. "Then the house is still within the family, and it will saves us a lot of commuting time."
Just renovating an old house, he said, doesn't seem to make much sense. "We can get a new house [from one builder] for $349,000, not including the lot work, prep work, permits and demolition costs."
However, the siblings haven't all signed on, especially the one who now lives in the house. "If it all falls apart, then we move to plan B, which is buying a newer house," Tay said.
The hallway and livingroom were included in the $300,000 makeover at the Orozcos' 50-year-old rambler in Vienna.
Nina Orozco navigates the ongoing renovation at her family's house in Vienna. The project is to be finished by July 1.