Second-Home Industry
Touts Family Compounds

For many people, the thought of vacationing with relatives is a grim prospect. Not John Gregory. Two years ago, the 39-year-old and his wife paid $400,000 for nearly 15 acres of lakefront property in North Carolina, where they are building a family vacation compound for their 17 siblings and cousins. So far they're working on a two-bedroom cabin they've dubbed the "Bunk House," and they're planning the main house. "We might call that the Mess Tent or the Lodge," says Mr. Gregory. The couple has also set aside plots where their children, now ages 5 and 7, can eventually put up their own homes.

The Gregory compound isn't tucked away in a remote, rural enclave, though. It's on one of 54 lots zoned for multiple dwellings in a section of Lake James, a new planned community in Morganton, N.C., about a 1½-hour drive from their home in Charlotte.

Developers are putting a new spin on an old-money idea: Hailing nostalgia and togetherness, they're pushing preplanned compounds -- properties with multiple dwellings that let extended families stay separately yet together -- with layouts that typically include a main house, guest cottages and common recreation areas. Unlike the retreats of East Coast clans with names like Kennedy, Cabot and Forbes, the latest renditions are being developed in the Sun Belt and other year-round vacation spots. Also marketed as "family gathering houses" or places for "new family traditions," some are being pitched as full-time homes for retirees.

The new developments are coming at a time when the housing market is sagging. Some areas with high concentrations of second homes have been particularly hard-hit. In California, for example, sales of second homes fell 37% last year, according to research firm DataQuick. It's early to say how the new compounds will fare on the resale market, but real-estate agents say all such properties carry a higher risk because they tend to be more customized than a single-family home.

Still, demographic trends point to more demand for vacation homes. Harvard's Joint Center for Housing Studies' coming June annual report, "The State of the Nation's Housing," is predicting an additional one million will be built by 2015.

Some companies pitching the insta-compounds let buyers pick from a menu of main houses and outbuildings. Charlotte-developer Crescent Resources, which says it has sold more than 80 compound lots in Lake James, has three other such communities in the works including Palmetto Bluff near Hilton Head, S.C., where nine of 10 compound lots, ranging from $2.8 million to $4.75 million, have also been sold. Suggested layouts start with a "big house" of up to 8,000 square feet, or a 3,000- to 6,000-square-foot "gathering house" with a shared cooking and dining area; buyers can add additional bunkhouses, cottages or carriage houses. Prices for a custom-built compound could run from $6 million to $12 million, including the land, the developer estimates.

In Chapin Estate, a 2,500-acre gated community being developed in Bethel, N.Y., about two hours from Manhattan, land parcels range in price from $155,000 for a wooded five-acre lot to $1.3 million for eight acres on the lake, and all are zoned for multiple dwellings. Vacationing families who tire of too many games of checkers, sing-alongs and fireside chats will also have access to onsite amenities such as a lakefront country club and activity center offering Pilates classes, and a concierge (at extra cost) to shop for groceries or to call the plumber.

Room to Breathe

In part, developers are invoking images of summer havens in the Adirondacks or New England, built by established families fleeing hot, polluted cities in the 19th century. They also say they're appealing to empty-nesters who want a family gathering spot, and boomers who are facing long, active retirements and want to create legacy properties to hand down to the next generation. Compounds can even provide a venue for blended families -- multiple generations with spouses, ex-spouses and stepchildren -- to come together for special occasions. In all cases, it's a way to keep visitors close -- but not too close.

Exterior of a compound-style courtyard home in Alys Beach, Fla.

"You really want to create a separation that gives people their own identity, and then a gathering place that brings them all together," says Barry Berkus, a Santa Barbara, Calif.-based architect who has designed five compounds in the past three years, including one for a client in Sun Valley, Idaho, that has a main house and a five-bedroom "children's house."

Ken Laurendine, 64, a manufacturers' sales agent from Birmingham, Ala., and his wife, Alice, bought a new compound-style home in Alys Beach, Fla., two years ago. The nearly $2 million, 3,500-square-foot home is designed around a central, enclosed courtyard with a pool and has a separate guest suite for the Laurendines' daughter and her two children. "You can walk in and out and it's all private," Mr. Laurendine says. "It's like your own little world." The look of the white-washed concrete villas, peaked roofs and arched doorways in the Alys Beach complex is an adaptation of Bermudan architecture. The master plan, by Miami-based planning and architecture firm Duany Plater-Zyberk, also includes 34 lots for full compounds.

The impetus to buy such retreats may be more related to a fantasy of family togetherness, rather than the reality. And the new compounds are likely to introduce a new generation of buyers to some of the classic issues of sharing ownership. After mom and dad hand down the big house, siblings could have trouble making joint decisions -- bickering over everything from who should pay to fix the roof to what kind of plants to have in the garden. And people can resent being expected to spend limited vacation weeks in the same place every year with relatives.

As a teenager, Michael O'Brien, now 38, says he missed out on high-school dances, summer baseball and a date with the "prettiest girl in school" because he had to spend weekends and summers at the Block Island, R.I. compound built by his grandfather more than a century ago. "I remember praying for a hurricane," says Mr. O'Brien, a Boston high-school teacher. "But I had to call the girl back and say I couldn't go."

Tom Couser, 60, spends part of his summers high up in the mountains of Colorado, where his wife, Barbara Zabel, and her two siblings own two small cabins on a mountain stream. But he still dreams of spending summers at a cottage in Maine. "I'm a lifelong New Englander, so for me it's not a place I ever would have chosen to vacation," Mr. Couser says. (Since they live in Connecticut, Ms. Zabel says she considers it a fair compromise.) But even before he got married, he knew that the trips to Colorado were non-negotiable. "Annual family gatherings at the cabin were part of the agenda from the get-go," he says.

The interior of Ken and Alice Laurendine's home

Mr. Couser, who has been visiting the property with his wife for 25 years and still suffers from altitude sickness when he goes there, says he feels he should stay out of the decision-making process (plans for a recent kitchen and bathroom renovation didn't include his input), because, as an in-law, he does not own any part of the house. "You feel a bit marginal at times," he admits. "But that's probably built into the deal of being an in-law."

Inheritance plans can also lead to conflict. Rising land values over the past decade have made property taxes and estate taxes a bigger burden. Avoiding such costs often necessitates complex inheritance strategies involving trusts, limited liability companies or partnerships, attorneys say. Clashes over when or whether to sell, keep or subdivide a vacation property can split apart even the closest of families.

Getting Along

Further complicating the issue, people are likely to be more emotionally attached to a place so deeply connected to their childhoods. "For some second-generation family members, it is the most important family asset," says Charles Collier, a senior philanthropic adviser for Harvard University and the author of "Wealth in Families." "I've heard of plenty of examples where the transfer of the house didn't work out and some of the children aren't speaking to each other."

Bob Gerrity, 69, and his wife Dottie, 67, of Naples, Fla., know that there's the potential for trouble in six years when they transfer ownership of their five-acre, two-home vacation property on Torch Lake in Michigan to their children. The siblings, now ages 38 to 45, have widely different incomes, and not all of them can spend the same amount of time on the property. Dan, 45, the CEO of an aviation-navigation systems company who lives in Bellevue, Wash., visits for two weeks in the summer. Neil, 41, a plastics salesman, lives in nearby Chicago and spends most of the summer in the guest house. Erin Fry, 38, a part-time attorney in San Francisco, visits the compound only one week a year and Patrick, 43, a corrections officer in Ann Arbor, Mich., visits sporadically.

So Gerrity père and mère have instituted a three-hour family meeting at the compound, held after the annual sailing regatta at the lake. Recent topics have included the drafting of a family mission statement and discussion about how to divvy up the financial burden of maintaining the lakefront cottages, which cost $40,000 a year just in insurance, taxes and basic upkeep.

"Dad tries to run it like a board meeting," says Patrick. "I usually have a beer."

***

Email your comments to rjeditor@dowjones.com.