The Raze is On

Drive through any older Bay-area neighborhood and you'll notice certain common features: winding boulevards, handsome homes, majestic oaks and palm trees, lovely landscaping and, oh yes, the ubiquitous bulldozer pushing what's left of a 1950s ranch house into a pile of rubble.

As vacant land has become increasingly scarce in sought-after neighborhoods near city centers, a greater number of buyers are snapping up homes with the intent to tear them down and build anew. In other words, they're paying big bucks for dirt.

It only makes sense. In many cases, it seems, the only way to get the home of your dreams in the neighborhood of your dreams is to knock down an existing structure and start from scratch.

The trend is contagious. Once someone razes a home and builds something beautiful, neighbors start looking at their own homes differently, says Karyn Sbar, general contractor and owner, with husband Karim Tahiri, of Soleil Design Build in South Tampa.

"Curb appeal is, after all, very important," says Sbar. "And there exists some sense of competition among neighbors. Nobody wants to live in the little dumpy house on the street."

While tearing down a perfectly livable home seems extreme, Sbar explains there are logical reasons to do so.

"Many homeowners start out with a plan to renovate their home," she explains. "Our company does historic restorations. But if the home is very old, or located in an area with strict guidelines for renovation of historic homes, such renovations can be unbelievably expensive."

For example, Sbar notes, the cost of hiring skilled craftspeople for such crucial jobs as tile and woodwork adds up very quickly at $30 per hour. And finding matching materials when renovating an older home is costlier than using new materials.

Of course, for owners of homes in historic areas, such as Hyde Park, renovation may be the only choice. Ordinances protect homes in historic districts from being demolished or substantially altered in appearance. In other neighborhoods, however, razing is the most feasible option.

"Estimates to renovate just one room in a small home can easily turn into five figures, but we can knock the whole house down for $8,000," Sbar says.

Complex and confusing FEMA guidelines also factor in. Bay-area homeowners, for example, are only permitted to add a certain amount of square footage to their homes in any given year, based on the current structure's appraised value.

The addition must be valued at a dollar amount that is equal to or less than 50 percent of the depreciated appraised value of the existing home. And since most of a property's value lies in the land, the existing home could be worth next to nothing.

For instance, say your current home offers some 1,800 square feet of living space and is situated on a beautiful piece of property offering ample room for expansion. You might be adding on one room at a time for the next 10 years to get the size home you want.

"Nobody's willing to go through renovation over and over again," says Sbar. "The home turns into a piecemeal project. And nothing's worse than living in a home that's half-finished. Each completed room makes the rest of the home look that much worse."

Also fueling the teardown trend is the increased difficulty of obtaining insurance on older homes, as building codes grow more restrictive and hurricanes continue targeting Florida.

Nowhere is the teardown trend more evident than along the waterfront.

"I'm tearing down junker homes on the water," says David Helms, owner of Signature Built in Tampa" target="_blank">Pinellas County. "But I'm also tearing down homes with price tags of $900,000-and I'm doing it all day long."

Some newcomers are willing to pay practically any price to live on the water, says Helms, while some longtime residents have experienced storm damage in recent years and would rather start over than make extensive repairs.

Property taxes also play a role. Under the state's Save Our Homes law, taxes on homesteaded property can only increase 3 percent per year or the rate of inflation, whichever is less. But if you move, you lose the cap and must then pay taxes on the full value of your new home and lot.

If, however, you choose to tear down and rebuild, the increased valuation will apply only to the new structure. The tax cap on the land will remain intact, and that can result in significant savings.

How significant? Let's say you're the longtime owner of a waterfront home on a lot worth $1 million in today's market. Thanks to the Save Our Homes cap, you may only be paying taxes on about $300,000 of the land's value. In Tampa" target="_blank">Hillsborough County, where every $100,000 in value equals $2,400 in taxes, that means you're paying $7,200 per year versus a potential $24,000 per year, according to Warren Weathers, Hillsborough's chief deputy property appraiser.

But if you move and buy a home and lot of comparable value, your tax bill more than triples.

"I get two or three calls a month from owners of high-end waterfront homes who are in that situation," Weathers says.

That's just one example, of course. How much a homeowner saves by staying and rebuilding varies greatly. In general, the longer you've owned your home, and the more your land value has increased, the greater the tax advantage of remodeling or tearing down and rebuilding versus moving, says Weathers.

And there's no reason why the new home you're building can't look as though it's been in the neighborhood for years.

Soleil, for example, uses traditional architectural styles to make sure new homes blend well into the neighborhoods.

"While South Tampa neighborhoods are changing on a daily basis, no one wants to live in the shadow of some monstrous structure towering over their house," Soleil's Sbar says. "We don't favor the over-large home and we realize people don't like being crowded. We believe that it's not the look of it but the mass of it that upsets neighbors."

Signature Built also avoids creating so-called McMansions. And local governments have put in place guidelines designed to keep new construction in scale.

"We don't have to battle with clients who feel bigger is better, because the beach municipalities have already crossed that road," explains Helms. "There are height restrictions, lot-line and setback codes and green-space and open-space percentages that must be followed. We never build straight up, but step houses back using layered elevations that soften exteriors. Our motto is to maximize land but minimize impact."

The bigger issue Helms faces is educating clients on the dangers of overbuilding.

"Even savvy homeowners can get carried away and create a property that's so over the top that the area may never catch up," says Helms. "I'm honest with our clients in explaining that I'll build what they ask for, but they may wind up with the priciest home in the neighborhood for a very long time."

JOINING THE RANKS OF THE RAZERS

Gabrielle and Rick Patterson decided to join the ranks of the razers when their 2,500-square-foot ranch-style home no longer suited their family's needs. But it wasn't an overnight decision.

They bought the remodeled one-story home in 1996 after falling in love with the beautiful protected waterfront in their own back yard and the expansive views across Culbreath Bayou.

Eight years and two exuberant little boys later, the home's galley kitchen, two tiny bathrooms and lack of closet space drove them to start looking for a larger home.

The search proved frustrating, however, when the Pattersons discovered just how much the market had changed.

"We wanted waterfront, and the homes for sale were either horribly expensive or just horrible," says Gabrielle. "We had paid under $400,000 for our house, and now people were getting $1 million for tiny houses with dated interiors and awful kitchens and baths."

Rick decided it made better financial sense to tear down their existing home and build a new one on the same lot rather than to buy something else and move.

"After you factor in the price of a new home in the current hot market, plus the terrific increase in our property taxes, it became evident that we could build a nicer house on a better lot by staying where we were," says Rick. "We did the math. We already owned a desirable waterfront lot. We just needed a different house."

Renovation was ruled out because the Pattersons didn't want to deal with the hassles.

"Friends who endured the renovation process warned us that subcontractors were hard to find due to a glut of work," says Gabrielle. "They told us to expect the job to take twice as long as promised and to cost twice as much. We said, 'No thanks.'"

So the Pattersons found builder Matt Hall of Tambay Custom Homes and told him exactly what they envisioned. Once plans were approved and permits were pulled, the family packed up and moved into a rental.

Habitat for Humanity came by and carted off every usable appliance, cabinet, door and window, and then the walls came tumbling down. Some 16 months later, the Pattersons are poised to move into their new, two-story, 5,000-plus-square-foot Mediterranean beauty.

Gabrielle doesn't know whether she's more excited about closet space and toy storage or about her gorgeous new kitchen.

"I can walk, I can move, I can breathe!" she says. "I never realized how tiny the old kitchen was until the cabinets and appliances came out. I stood in that space and asked myself how I lived with it for eight years."