FHB Logo Facebook LinkedIn Email Pinterest Twitter Instagram Plus Icon Close Icon Navigation Search Icon Navigation Search Icon Arrow Down Icon Video Guide Icon Article Guide Icon Modal Close Icon Guide Search Icon Skip to content
Subscribe

In every issue you'll find...

  • Expert insights on techniques and principles
  • Unbiased tool reviews
  • Step-by-step details to master the job
  • Field-tested advice and know-how
Subscribe Now!
Subscribe
  • How-To
  • Design
  • Tools & Materials
  • Videos
  • Blogs
  • Forum
  • Magazine
  • Members
  • FHB House
  • Podcast
  • Join
  • Log In
Subscribe
Building Matters

On Building Second Homes

The CEO of this worker-owned building company explains how second homes help finance affordable homes on Martha's Vineyard.

By John Abrams Issue 305 - Feb/March 2022

“How can you justify devoting so much time and energy to building vacation homes for rich people?”

It’s a good question, and one that I’ve heard often during my nearly 50 years on Martha’s Vineyard. In resort communities, many don’t have a first home. They’re scrambling to find stable housing while more than half the houses sit empty much of the year. That’s a problem. And in light of our climate crisis, the significant materials and energy dedicated to building and operating those houses compounds the problem.

When I came here in the 1970s, designing and building homes was so thrilling that I was content to build anything that developed new skills and knowledge. Working with head and hands gave me great pleasure; the idea that people would pay me to do it felt like a bonus. After a few years, however, the joy of the work and the satisfaction of the results were no longer enough. By then, second homes had become a staple of our company, South Mountain, and my colleagues and I began to ask ourselves how we could justify this work.

The answer came in 1980. It began with a phone call from a woman named Madeline, who asked if I would look at a piece of land with her. She was a 60-year-old librarian whose husband had recently died. They had no children, and they had always lived in rented apartments. Her dream was to own property. She had $7000 in cash. A real-estate agent showed her a lot priced at exactly that, but her friends advised against buying it due to its topography and location.

The steeply sloping parcel was adjacent to the main road from Vineyard Haven to Edgartown. Traffic on the road was noisy and constant. The property faced due south toward a beautiful little valley. Except for the proximity to the road, it was lovely. I suggested an earthbermed, partially underground house and told her we could design the noise of traffic right out of the picture. She was excited. She bought the lot.

At about the same time, I was approached by a single mother who owned property in West Tisbury and wondered whether we could build a house she could afford. Her budget was too small, but we had heard that the Farmer’s Home Administration was providing 1% loans to those with low and moderate income. We hoped to bundle a nice passive-solar house for Cathy and the earthbermed house for Madeline, but we learned that the Farmer’s Home fixed-expenditure cap did not take into account either the Vineyard’s high construction costs or the long-term energy savings our houses would realize. We applied anyway.

We created plans for simple, compact houses and submitted them to Farmer’s Home with a request that the mortgage limit be increased (from $40,000 to $48,000) on each house because of the energy savings, which we analyzed and documented. After a little bureaucratic wrangling, the increase was approved. Unfortunately, it still wasn’t enough to build the houses, unless we cut our overhead and profit to nothing and reduced our labor rates to below cost. Additional subsidies were needed.

Enter David and Pat Squire, who had purchased land in Edgartown and designed a second home with a Boston architect. They asked if we would be interested in bidding on the construction, and I told them that South Mountain built only those projects that we designed and that we didn’t bid on construction projects. They persisted, and a radical thought occurred to me: What if we gave the Squires a bid that had an explicit “premium” built in to subsidize the two Farmer’s Home houses? I shared the idea with the Squires, and they invited us to submit such a bid.

Our bid, one of three, was roughly $40,000 more than the next highest. They chose us nonetheless, and we built their house. We also built the two small houses for Madeline and Cathy by making up the shortfall with our extra earnings from the Squire project. Dreams came true, and mortgage payments were under $200. The Squires’ philosophical alignment with our purpose led them to become strong supporters of affordable-housing efforts on the Vineyard. Years later, when the Island Affordable Housing Fund was established to raise money for affordable housing, David became an important board member.

That was the first and only time that South Mountain inflated the cost of a project to support affordable housing efforts, but the experience inspired an idea that shaped the future of our company. If we could become a reasonably profitable enterprise, we could devote a portion of our earnings to affordable-housing work for our community, and we could engage our wealthy clients in the issue.

At that point, the work of building second homes became meaningful. From then on, I often told new clients that they could count on me to ask them, in the future, to help with the Vineyard’s affordable-housing problem (which they exacerbate, of course). I have done that now for 40 years, and the response has been heartwarming—millions of dollars donated for attainable year-round housing.

Building second homes also allowed us to experiment and take risks. One of these occurred in 1987 when, in response to a request from two long-time employees for a greater stake, I sold South Mountain to my employees (and myself). We became a worker-owned cooperative and began to introduce new values to our business activities. For example, we committed to the creation of lifelong living-wage jobs and family-first policies, such as flexible work arrangements and stellar benefits. We began to codify our commitment to our community by donating to essential nonprofits and engaging in pro-bono work. We became a triple-bottom-line company long before we’d ever heard the term, measuring our success not just by our profits but also by our effects on people and the planet.

Our journey since then has been influenced by many others, but particularly by Patagonia, the outdoor clothing and gear company that has become the gold standard for corporate social and environmental responsibility. Just like our second homes, many of Patagonia’s products are nonessential. Not everyone needs a pair of $300 ski pants or a lifetime wetsuit. So the company balances that reality with its social and environmental contributions, its political advocacy, and its important innovations, such as pioneering the use of organic and recycled cotton, and buying back old garments to refurbish and resell for far less than new ones.

Inspiration from Patagonia and others, combined with our own cantankerous sense of justice, has helped South Mountain become at once a profitable business, an active agent of community change, and a supporter of the local economy that supports us.

Today our second-home work is unusual in several ways. First, we restrict the size of the houses we are willing to build. Only on rare occasions, on very large parcels, have we designed and built houses over 3500 sq. ft.

We also use our second-home work for de-facto research to advance the building industry, especially with regard to energy performance, comfort, health, and durability. By experimenting with the homes of our well-to-do clients, we’ve learned a lot about high-performance building. As a result, we set minimum performance standards for our buildings that are well above code. We mostly produce buildings that are net-zero possible and fossil-fuel-free. We use reclaimed materials extensively and are beginning to reduce embodied carbon (a work in progress, with net-zero carbon as the ultimate goal).

By elevating performance standards, we make models that others can emulate and that we can incorporate in our affordable-housing work. For us, truly affordable housing differs from luxury housing in only three ways: It’s smaller, it’s less detailed, and it’s differently financed. The performance and quality are uncompromised.

Perhaps the biggest step we have taken with our second-home work is doing less of it. Over time, we diversified South Mountain’s work into five parts; here’s a rough breakdown over the past year in terms of dollars per category:

  • Limited-use second homes: 10%
  • Year-round, fully occupied homes: 20%
  • Attainable workforce housing: 10%
  • Institutional work for nonprofits: 35%
  • Solar for homes and businesses not built by us: 25%

This is only one year, and it happens to be a year with an uncharacteristically small amount of second-home work, but it indicates a direction: less harm, more good. Causing no harm is impossible—we are part of the problem too—but we share our experiences and hope others will join our push to turn some of the negative impacts of building into positive benefits for communities and the environment.

An added benefit of our business practices is that the second-home clients we attract tend to share our values. We love working with them. They go from being clients to becoming partners in our efforts to make the Vineyard a better place. Many have become friends for life. The rewards of this work and these relationships have become deeply ingrained in our core purpose.

John Abrams is the CEO of South Mountain Company, a worker co-op and B Corp in the process of transitioning to second-generation leadership.

From Fine Homebuilding #305


RELATED LINKS

  • Building Better Affordable Homes
  • Passive-House Standards for Everyone
  • Community Effort Makes More Homes More Affordable

Sign up for eletters today and get the latest how-to from Fine Homebuilding, plus special offers.

Signing you up...

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
See all newsletters
See all newsletters
×

Get home building tips, offers, and expert advice in your inbox

Signing you up...

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
See all newsletters
See all newsletters

New Feature

Fine Homebuilding Forums

Ask questions, offer advice, and share your work

Log in or create an account to post a comment.

Sign up Log in

Become a member and get full access to FineHomebuilding.com

More Building Matters

View All
  • The Gift of Free Work
  • Practical Ways to Electrify an Old House
  • Academics Don't Define Real-World Abilities
  • Are 2D Drawings Obsolete for Home Building?
View All

Up Next

Video Shorts

Featured Story

Modern and Geometric Home in New England

Comprised of three simple, triangular forms, this minimalist Vermont house is infused with character and culture.

Featured Video

Builder’s Advocate: An Interview With Viewrail

Learn more about affordable, modern floating stairs, from design to manufacturing to installation.

Related Stories

  • Podcast 533: Missing-Middle Housing, Collateral Damage From Demo, and Midwest BS Symposium
  • Insulating a Roof: Getting Higher R-Value
  • Podcast 532: PRO TALK With Engineer Stephen MacDougall
  • Podcast 531: Member's-only Aftershow — ADUs Are a Solution

Discussion Forum

Recent Posts and Replies

  • |
  • |
  • |
  • |
  • |
  • |
View More Create Post

Highlights

Fine Homebuilding All Access
Fine Homebuilding Podcast
Tool Tech
Plus, get an extra 20% off with code GIFT20

"I have learned so much thanks to the searchable articles on the FHB website. I can confidently say that I expect to be a life-long subscriber." - M.K.

Get home building tips, offers, and expert advice in your inbox

Signing you up...

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
See all newsletters
See all newsletters

Video

View All
  • Podcast 533: Missing-Middle Housing, Collateral Damage From Demo, and Midwest BS Symposium
  • Podcast 532: PRO TALK With Engineer Stephen MacDougall
  • Podcast 531: Member's-only Aftershow — ADUs Are a Solution
  • Podcast 530: PRO TALK With Architecture Student Phillip Schladweiler
View All

Design and Planning

View All Design and Planning Articles
  • View of a living room and kitchen with large glass doors to the outside
    Editorial Note: Building New is Easy
  • front of house
    Combining Design Aesthetics for an Island Home
  • Photo of a large open window opening onto an urban neighborhood
    Editorial Note: Living Smaller
  • Tips for Choosing and Installing a Wood Stove
    Tips for Choosing and Installing a Woodstove
View All Design and Planning Articles

BOOKS, DVDs, & MERCH

Shop the Store
  • Pretty Good House
    Buy Now
  • Code Check Building 4th Edition
    Buy Now
  • 2023 Tool Guide
    Buy Now
  • 2022 Fine Homebuilding Archive
    Buy Now
  • Shop the Store

Fine Homebuilding Magazine

  • Issue 313 - Feb/March 2023
    • Practical System for a Seismic Retrofit
    • Fine Homebuilding Issue #313 Online Highlights
    • Practical System for a Seismic Retrofit
  • Issue 312 - Dec 2022/Jan 2023
    • Tool Test: Cordless Tablesaws
    • Gray-Water System for a Sustainable Home
    • Insulate a Cape Roof to Avoid Ice Dams
  • Issue 311 - November 2022
    • 7 Steps to a Perfect Exterior Paint Job
    • Options for Smarter Home-Energy Tracking
    • The Fine Homebuilding Interview: James Metoyer
  • Issue 310 - October 2022
    • Choosing a Tile-Leveling System
    • Choosing Between HRVs and ERVs
    • Custom Built-in Cabinets Made Easy
  • Issue 309 - Aug/Sept 2022
    • 10 Steps to Install Crown Molding on Cabinets
    • How to Get Sturdy Walls Without OSB
    • Choosing the Right Construction Tape for the Job

Fine Homebuilding

Follow

  • twitter
  • facebook
  • instagram
  • pinterest

Newsletter

Get home building tips, offers, and expert advice in your inbox

Signing you up...

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
See all newsletters
See all newsletters

Membership & Magazine

  • Online Archive
  • Start Free Trial
  • Magazine Subscription
  • Magazine Renewal
  • Gift a Subscription
  • Customer Support
  • Privacy Preferences

Taunton Network

  • Green Building Advisor
  • Fine Woodworking
  • Fine Gardening
  • Threads
  • About
  • Contact
  • Advertise
  • Careers
  • Copyright
  • Terms of Use
  • Site Map
  • Do not sell or share my information
  • Privacy Policy
  • Accessibility
  • California Privacy Rights

© 2023 The Taunton Press, Inc. All rights reserved.

X
X
This is a dialog window which overlays the main content of the page. The modal window is a 'site map' of the most critical areas of the site. Pressing the Escape (ESC) button will close the modal and bring you back to where you were on the page.

Main Menu

  • How-To
  • Design
  • Tools & Materials
  • Video
  • Blogs
  • Forum
  • Reader Projects
  • Magazine
  • Members
  • FHB House

Podcasts

  • FHB Podcast
  • ProTalk

Webinars

  • Upcoming and On-Demand

Account

  • Log In
  • Join

Podcasts

  • FHB Podcast
  • ProTalk

Webinars

  • Upcoming and On-Demand

Popular Topics

  • Kitchens
  • Business
  • Bedrooms
  • Roofs
  • Architecture and Design
  • Green Building
  • Decks
  • Framing
  • Safety
  • Remodeling
  • Bathrooms
  • Windows
  • Tilework
  • Ceilings
  • HVAC

Magazine

  • Current Issue
  • Past Issues
  • Magazine Index
  • Subscribe
  • Online Archive
  • Author Guidelines

All Access

  • Member Home
  • Start Free Trial
  • Gift Membership

Shop the Store

  • Books
  • DVDs
  • Taunton Workshops

More

  • FHB Ambassadors
  • Reader Projects
  • Podcast
  • Customer Support

Account

  • Log In
  • Join

Newsletter

Get home building tips, offers, and expert advice in your inbox

Signing you up...

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
See all newsletters
See all newsletters

Follow

  • twitter
  • facebook
  • instagram
  • pinterest

Join All Access

Become a member and get instant access to thousands of videos, how-tos, tool reviews, and design features.

Start Your Free Trial

Subscribe

FHB Magazine

Start your subscription today and save up to 70%

Subscribe

We hope you’ve enjoyed your free articles. To keep reading, become a member today.

Get complete site access to expert advice, how-to videos, Code Check, and more, plus the print magazine.

Start your FREE trial

Already a member? Log in