Spring Real Estate 2006

Publication Date: Friday, April 28, 2006

Building momentum
New home construction changes face of Atherton

by Susan Golovin

Whatever is going on in Atherton? Concrete mixers, giant cranes and back hoes; the banging of nails, the whirr of drills; crews of workmen, trucks constantly coming and going providing supplies: Is this the community described in most literature as "bucolic?"

Mike Hood, a building and zoning official for the town of Atherton, confirms what is evident to the casual observer: There's a whole lot of building going on. "There are 100 new, single-family residences in some phase of construction right now," he said.

"To give you some perspective, 10 years ago we had about four to six per year. That's steadily increased until 2002, and we've been issuing 40 to 60 permits a year since then," he added.

There are 2,500 lots in Atherton, and at the current rate of replacement, the entire town will turn over in about 50 years.

"Right now, about 12 homes are going up on Park Lane," Hood said. "The rest of the activity is pretty well scattered."

Atherton has always been known for its mansions. However, the average size of a new home is now 8,000 square feet, and homes from 15,000 to 20,000 square feet are no longer an anomaly. In Atherton, the ranch-style home is an endangered species.

"When you pay three to four million for an acre, you want to maximize space," Hood said. "On one acre you're allowed to build 7,800 square feet above ground, and people are putting in basements (which do not count in the determination) that are the full size of the structure.

"After 50 years a house becomes obsolete. The kitchen and the bathroom need to be completely redone," he said. The cost of the land explains why so many people are choosing to tear down and re-build rather than renovate at, according to Hood, twice the national average.

"We're currently working on constructing four homes in Atherton," said Gary Lencioni, a contractor who has been working in the area for about 30 years. Lencioni's homes cost between $450 to $1,000 per square foot to construct.

"All of the homes are very different," he said. "I recently built a home with a nine-car underground garage. The basement all the way up to the second floor consists of concrete walls and floors, and the third floor is entirely wood. But most of my clients seem to favor the more traditional French to Mediterranean or Tuscan style."

"People are putting in big basements," Lencioni confirmed, and are using them for "big theaters that cost up to one and a half million dollars." Additional trends include sophisticated electronic and lighting controls for the entire house. "We're also seeing much more choice in interior plaster," he added.

"There's no architectural review board in Atherton, but this will change," Lencioni predicted. His homes take between 18 months to 3 1/2 years to construct. "You can't build a 20,000-square-foot home in a short time, and the community is getting more concerned with the noise and disruption."

Indeed, the permit process is not as complicated as that of neighboring communities because Atherton does not have an Architectural Review Board. "It takes eight weeks and is pretty straightforward," Hood said, adding that variances are rare. The downside is his office hears constant complaints regarding traffic, parking and noise, despite rules that govern hours of construction and on-site parking whenever feasible.

The easy permit process was a factor in one resident's decision to build in Atherton. However, he encountered other frustrations. "There are about 150 trees on my property, and we needed to take down four," he said. This request ran head on into the Atherton heritage tree preservation laws.

Before he actually had to resort to litigation, the City Council voted to overturn the Planning Commission's ruling that only two trees could be removed. "But this delayed the project by two months and put us into the rainy season," he said.

"The restrictions on drainage are also onerous," he continued. "You have to contain all of your own water, so I have to have a huge detention ditch on the property." In addition, he cited a myriad of fees for everything from off-loading to road impact (for which he had to submit a video).

His French-style home includes such amenities as a stone-floored, two-story conservatory with three walls of glass that open up and out (as do all the windows throughout) to provide the feeling of being outdoors. A 24-foot domed entrance and a pool house with a 25- by 25-foot covered pavilion will provide for the gracious entertaining he plans.

The home will have a low-voltage homework panel with a plethora of controls. "Basically you'll be able to turn on the washing machine from an airplane," joked the owner's rep who is coordinating the entire project.

"It will take 20 months to build," the owner said. "Everything - the house, the pool house, the swimming pool - is being built in parallel, and we have the entire team in place. This requires massive forces and specificity to the extreme detail."

Lencioni said that although he does not build spec homes in Atherton, there are about 10 to 15 of these currently on the market.

"There is no riskier occupation for return than construction," warned Hood. "These projects go for a number of years and you could have a complete reversal in the economy."

From Hood's perspective, the middle-of-the-road construction is not selling right now. What sells is the "bargain" (under $6 million) or the "exotic" ($12 million on up). "Someone who can afford a home in the middle range would rather build it themselves," he said.

Hood also pointed out that there is indeed a lot of remodeling underway in town. However, it is not as troublesome to the neighbors because the crews are smaller and the projects are largely interior.

In addition to all the construction-related industries, there are others who profit. The school tax is $2.24 per square foot. Also, at noon, food trucks are doing a booming business catering to the hungry crews.