A $25,000 real estate tax bill was all the incentive Billy and Rose Sahm needed to build their new house.

The couple had been holding onto a lot in Friendship Heights they had bought from Billy’s father, Alan Sahm, in 2002. When the District doubled the tax rate on vacant lots in 2009, Billy and Rose knew they couldn’t afford to keep it uninhabited. (D.C. has since lowered the tax rate.)

Despite the steep tax bill, Billy was against selling the land because of its ties to his family. His grandfather had opened a grocery store nearby in 1935 called Jennifer Market. (It later became Rex Liquors.) Alan had owned several parcels on the street.

Even though they were happy living in the Palisades neighborhood of Northwest Washington, a decision needed to be made. Rose contacted real estate agent Marc Fleisher to ask his advice. He told her that if it was his lot, he would build.

“So I said, ‘Okay, we’re going to build,’ ” Rose said.

In many ways it made sense to build a new home. Their children were out of school. Billy’s multiple sclerosis was progressing and they needed a more accessible house. Rose also wanted to live closer to Metro.

In looking for an architect to design their dream home, they found George Myers of GTM Architects in Bethesda. Myers had designed the duplexes at Nebraska Avenue and Albemarle Street. They selected Allegheny Builders and Contractors as their builder.

Because the lot was longer than it was wide and surrounded by traditional brick homes, the Sahms knew they would be somewhat constricted in the design.

“When you build a house, you always want to maximize the lot,” Rose said. “It doesn’t make sense financially otherwise. But you don’t want it to look completely out of character to the neighborhood. I liked the way those [duplexes] were stepped back from Albemarle Street. I liked the way they looked.”

The Sahm home mimics the clapboard-look of the duplexes, but instead of painting the shingles neutral colors, the couple opted for a more colorful palette — two shades of gray, white accents and red trim around the windows. The contemporary metal railings and stained glass entry door give the traditional facade a modern touch.

The structure resembles building blocks stacked together with varying elevations. It is tall in the middle and pulled back in the front and back with small gables at either end.

“We’re kind of masking the square footage,” Myers said. “We’re trying to be respectful. [The front and back are] more the scale of the other houses [in the neighborhood]. The middle is not. The middle is taller.”

Billy and Rose knew what they wanted: five bedrooms, an elevator, no thresholds to impede a wheelchair, an open floor plan and an office. Rose also needed outdoor spaces — a roof deck and a screened porch.

And it had to be energy efficient. The Sahms asked the builder use 2-by-6 studs rather than the standard 2-by-4, allowing them to put in about 30 percent more insulation. They heat and cool their home through a combination of geothermal and solar energy, a decision that had little impact on Myers’s design.

“It’s not as if we designed the house differently,” Myers said. “We designed the house and looked for opportunities. [Energy efficiency] was one of the priorities but not the driving force.”

One of the advantages to the design of the home was having roofs at different levels, providing opportunities for solar panels.

The Sahms had thought a geothermal heat pump wouldn’t be possible because of their lot size, however, they soon discovered the wells could go down into the ground.

A geothermal heat pump transfers heat between a house and the earth by circulating liquid through underground pipes. In the summer, it takes warm air out of a house, cools it and then returns it to the home. It does the reverse in the winter. They have two wells drilled 450 feet into the ground.

Geothermal heat pumps are gaining popularity because of solar’s limitations. Solar is most efficient on south-facing roofs. Also, historic districts often prohibit or limit solar panels on homes.

“We have an awful lot of clients doing geothermal now,” Myers said.

Although the Sahms spent close to $100,000 for their geothermal and solar systems, federal and local tax incentives reduced the overall cost. Through the D.C. Renewable Energy Incentive Program, they received $16,000. They also get a yearly Solar Renewable Energy Credit check for $2,500 for the excess electricity they produce. Federal tax credits for the solar and the geothermal were about 30 percent of the cost and can be divided and taken through 2016.

“Our system will pay for itself in six years from the tax incentives, not including the energy savings,” Billy said.

The interior of the home reflects the open floor plan trend. There is no formal living or dining room. Instead, the large open space is defined by function instead of walls.

“It makes a lot of sense to take off the rooms nobody uses in the front, which is the formal living room and dining room, and get down to what people use,” Myers said.

Small architectural details — the long thin windows that guard the built-in with the gas fireplace and TV, the beadboard ceiling in the kitchen and the windows that look into the screen porch — make a statement in this space.

Rose pushed Myers to add more windows to the home, particularly the side windows in the living area. At first he was reluctant, fearing the design was straying toward contemporary and would be in competition with the more traditional elements.

“I was a little bit worried we were going too far, but I love them now,” he said.

The elevator, which opens to the back and the front, stops at 41 / 2 floors in the home. The “half” floor is the landing between the first floor and lower level. The home was built with steps up to the front door, mimicking the other homes in the neighborhood, but the Sahms needed an entrance at grade for a wheelchair. The side entrance opens to the landing, allowing a wheelchair to enter the elevator.

The higher first floor allows for the basement to be lifted a few feet from the ground, which sends more natural light into the space. The Sahms originally intended the basement to be an in-law suite for Billy’s father, who has since died. The area includes a bedroom, full bathroom and sitting area and has a separate entrance.

The master bedroom suite, with a spacious master bath and his and her closets, is on the second floor. The bedroom has a vaulted ceiling with wood beams.

“We had something similar in the old house,” Billy said.

The second floor has two more bedrooms with a Jack-and-Jill bathroom between them.

The third floor has a bedroom, sitting area and the roof deck. When the Sahms’ son is away at college, they rent out the space on Airbnb.

What strikes you about the home is that every inch is used. There is no wasted space. Even the landings between floors have a purpose. The Sahms carved out closets for additional storage.

“It was a fun project because whenever you get a small lot to design on, those are my favorites, just because I’m always trying to make the case for people to get rid of rooms they don’t need,” Myers said. “Build the space you need. When you are limited on the lot and house size, it’s so easy to make the case.”

The Sahms spent $899,000 to build the house, including the geothermal and solar energy systems, $53,000 for the architect and $9,000 for permit fees.

Although they have lived there for three years, there are still things to do. For example, they haven’t hung much of their art.

“The house we had at Sherrier Place had lots of color, both interior and exterior,” Rose said. “These Easter lily walls are just about killing me. But everybody says you have to live in your house for a while before you choose your color. I’m getting really close to putting color on the walls because it is driving me a little bit crazy.”