Second-Floor Remodel Designed to Save Energy and Money

Finding the best company to build out the Wallaces' unfinished second floor was like solving a sudoku puzzle: everything had to add up in different directions, and getting the right answer was tough. Once Don and Ellen Wallace discovered Otogawa-Anschel Design-Build, they knew they found the answer. The Wallaces bought their 1914 bungalow in 2001 largely because of the dusty, unconditioned seco...

August 31, 2007
Products List
The Financials
Company Snapshot

Painted walls help define spaces and create warmth within the high-ceilinged, open plan. The exposed brick chimney and stained glass window also makes the master bedroom feel cozy.
After photos by Andrea Rugg Photography

Finding the best company to build out the Wallaces' unfinished second floor was like solving a sudoku puzzle: everything had to add up in different directions, and getting the right answer was tough. Once Don and Ellen Wallace discovered Otogawa-Anschel Design-Build, they knew they found the answer.

The Wallaces bought their 1914 bungalow in 2001 largely because of the dusty, unconditioned second floor. "We wanted a reasonably priced house with a lot of potential," says Don, one where "we could start with a clean slate." Believers in Sarah Susanka's not-so-big-house approach, they wanted the 750-square-foot second floor to become an imaginative, open area encompassing a master bedroom, a kids' bedroom, a family bathroom and a flexible space that could be a nursery, yoga room, or study.

Located in an attractive urban neighborhood in St. Paul, Minn., the two-bedroom house had served four previous owners, none of whom had altered the interior much. The original Arts and Crafts woodwork had never been touched, says Wallace, and the Wallaces wanted to extend those traditional trim elements upstairs. About 20 years back, someone had added a sunroom to the 1,200-square-foot main floor. The light that pours into the living area inspired the Wallaces to add pervasive natural light to their wishlist for the second floor.

And the remodel had to be green. "Green design to us meant less use of energy or toxic materials," says Wallace, "with greater comfort and healthier air for our two young children."

The Right Fit

The couple took time to find the right talent for the job. Some contractors were not into green methods. Others were unwilling to work with the Wallaces' $85,000–$100,000 budget. One presented preliminary sketches that were a yawn. Another wanted no part of the design discussion: "He said, 'Find a designer, and I'll build it,'" recalls Wallace. But the Wallaces wanted a more inclusive approach.

When the Wallaces visited a home tour house that Otogawa-Anschel had remodeled for a Wallace acquaintance, something clicked. Company owner Michael Anschel's design was imaginative, open and green. "We trusted that he'd be able to translate [those qualities] into a historical setting," says Wallace.


It was a great match. "Sarah Susanka's aesthetic is similar to ours," says Anschel. Not only that, but the Minneapolis-based company has done a lot of award-winning old-house renovation work, and Anschel was confident he could produce a fresh, successful design within the Wallaces' budget. Anschel says green has been the core of his design-build approach since he launched the company in 1996. "Green doesn't cost more to build," he says, "and in some cases it costs less. Clients get an energy-efficient, durable house that's healthier to live in, and we get to build cost-efficient projects that require fewer callbacks. It's a great win-win." (Recognizing the growing market for green homes, he's now spearheading development of green remodeling and construction standards for Minnesota. The standards, along with how-to information, will be introduced beginning in the fall; see

Living Large

The Wallaces signed a design contract on March 25, 2005, but the project was "a long time in design," says Anschel, partly because of a personal problem the clients encountered, partly because the small upstairs space with low knee walls was "not a square box," and partly because the team needed to talk through the design with the homeowners every step of the way.

Located at the front of the house, the yoga room has energy-efficient windows scaled to fit a traditional bungalow upstairs wall.

The Wallaces chose a design that deftly blends sheltered nooks and open areas; advanced technology and natural airflow; and ample sunlight and varied wall colors to make a compact area "live larger," says Wallace. Strategically placed partial walls organize the space without closing off rooms or blocking the flow of light and breezes. A barn-style door with two side-by-side, windowed antique doors lends privacy to the children's bedroom when closed and becomes a wall with windows in the yoga room when open. And energy-efficient windows feature a distinctive nine-panel upper sash that duplicates the 1914 windows; coincidentally, the antique doors have the same glazing pattern. The new windows facing the street are short to retain the original bungalow scale.

Salvaged stained glass inserts on interior walls spread light and reinforce the house's period style. Glass light fixture shades are painted inside to emit a warm, vintage glow. Baseboard, trim and flooring match the oak originals downstairs. Shelves tuck much-needed storage into knee wall space and corners, and a handsome stair rail links the two floors.

Seeing Green

Anschel spotted many ways to make the space energy-efficient and environmentally friendly. For one thing, the design for the new living area uses only existing space, so it required no added volume to be constructed. Otogawa-Anschel tightened up the space, though, by filling all wall and rafter cavities with open-cell foam insulation. "Everything is sealed; there are no bypasses from the first floor," says Anschel. A hot-roof system such as this delivers excellent performance, because it requires little energy to heat or cool the space. Though the remodeled house has not gone through a Minnesota winter yet, Anschel predicts that the new tight "cap" may enable the house to use less energy for heating than it did with a smaller finished space.

A radiant, in-floor heating system keeps the second floor comfortable. It is so energy-efficient that adding a pump to the house's existing boiler was sufficient for the extra square footage. For more energy savings, the second floor area has separate heating zones for the master bedroom-yoga room and the children's room. With good cross-breezes and Energy Star-rated ceiling fans, the upstairs stays cool without any air conditioning.

When remodeling second floor spaces, it's standard practice for Otogawa-Anschel to install ¾-inch tongue-and-groove plywood over the shiplap subfloor using glue and a special screw pattern rather than remove the shiplap and move the electrical in the first floor ceiling. "We can essentially turn a 2 by 6 into a 2 by 8 or better," Anschel says. The system lowers labor costs and the chance of cracking the plaster below while providing an engineered floor.

Along with the salvaged doors and stained glass, the space includes recycled glass and ceramic tile, Forest Stewardship Council-certified oak trim, oak veneer MDF baseboard, locally manufactured oak flooring with low-VOC sealant, low-VOC paint, a dual-flush toilet, a low-flow shower head, and a bathroom fan that quietly moves 90 cfm, using far less energy than a typical bath fan. Generous natural light reduces the need for electric lighting. Otogawa-Anschel routinely keeps remnant lumber on hand to use again on site or in other company projects or to donate to local reuse centers. The firm uses a dumpster company that sorts all construction waste for recycling.

Last spring Otogawa-Anschel participated in another home tour, this one showcasing the Wallace house. About 1,200 people came through, and Otogawa-Anschel received many calls from new prospects after the tour. Several homeowners already considering the company for their own green remodel were won over after seeing the Wallace house. "They got to see how a design fits together," Anschel says, "gaining faith and trust in what we do and how we work."

2006 Stage of Project
Feb. 27 Construction contract signed
Payment: Feb. 27 40%
March 15 Obtain permit
March 17 Order materials
April 3 Inspection, mechanical rough-in
April 10 Framing inspection
April 17 Insulation inspection
May 16 Begin drywall
June 5 Drywall completed, project 50% completed
Payment: June 5 40%
June 11 Pre-completion walk-through, including second measure and trim materials review before final custom-trim order
Payment: June 11 15%
July 7 Begin installing interior doors and trim
Sept. 7 Homeowner begins painting
Oct. 7 Final inspections
Oct. 20 Project completed
Payment: Nov. 15 5%


Products List

Bathroom fan: Panasonic Bathroom sink and faucet: Kohler Ceiling fans: Hunter Ceramic tile with recycled content: Royal Mosa Dual-flush toilet: Sterling Glass tile: Boyce & Bean Light fixtures: Rejuvenation Low-VOC floor sealant: Bona-Kemi Low-VOC paint: Benjamin Moore Radiant floor heating and floor panels: Wirsbo Shower valve: Delta Spray foam insulation: Icynene Windows: Pella

The Financials

The home's exterior looks similar; the energy-efficient upstairs windows match those of the first-floor and are sized to match the original bungalow scale.

Otogawa-Anschel Design-Build fees range from 5 to7 percent of the construction budget, depending on the size and complexity of the job. The Wallaces paid 5 percent of their $100,000 budget. Michael Anschel bills design this way because he wants the designers to focus on creativity and meeting client needs rather than on time cards. "Design usually pays for itself," he says.

Ordinarily the company incorporates a 40 percent margin in the construction price, but Anschel reduced the margin to 35 percent on the Wallace project. "I felt that the clients really loved their home, cared about the quality of the project, and were taking their budget to the edge of comfort," he explains. "We would still do well at this margin — but we could not drop below 35."

It was a good bet that they wouldn't. One reason was that the company's tight financial system — including a thorough design workup, material orders and fixed quotes from subcontractors before construction starts—keeps slippage to a minimum. "We budget a little cushion factor in old houses," says Anschel. And, "with the reduced margin we were sensitive to everyone's use of time." The only major holdup, caused when the homeowner contracted the painting separately, tried to correct the painter's errors, and then asked Otogawa-Anschel to repaint — delayed project completion by several months but did not compromise the margin. In fact efficient production boosted gross profit on the project by 2.4 percent.

Company Snapshot

Otogawa-Anschel Design-Build 
Owner: Michael Anschel
Location: Minneapolis
2006 volume: $1.3 million
Projected 2007 volume: $1.6 million
Biggest challenge: design a compact multi-room space that is open, has lots of light and is energy-efficient
Web site:

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