IF YOU WENT TO THE CIRCUS AS A KID, YOU NO DOUBT REMEMBER one of the old standbys—elephants riding bicycles that barely support their lumbering frames. This is how some homeowners view the teardown projects now proliferating in their established neighborhoods. Except that they don't think of them as the greatest show on earth.

At issue are the proportions. Lot sizes have shrunk, on average, from 17,600 square feet 20 years ago to 15,788 square feet today, according to the NAHB, but homes haven't scaled down proportionately. Rather, the average home grew from 1,905 square feet in 1987 to 2,349 square feet in 2004.

The reasons for the inverse ratio are apparent. New-home buyers want it all: tree-lined streets, proximity to public transit, downtown jobs, good schools, parks, and cultural amenities. Oh, and a minimum of three bedrooms, two baths, a two-car garage, a great room, an island kitchen, walk-in closets, a spa bath, a media room, a home office, and more. With land prices skyrocketing, even builders who would prefer to build smaller footprints have had to double down on floor plan features to continue to make their margins.

Therein lies the paradox fueling the so-called McMansion wars, the reason so many have sought to squeeze oversized homes onto tiny infill lots. Skirmishes continue to erupt weekly in metro zones where land prices have eclipsed the value of existing homes. Teardown proponents tout the practice as an antidote to sprawl, a boon to the tax base, and a means of replacing obsolete housing stock. Preservationists decry the loss of architectural history and predict the death of community. Homeowners in renaissance areas live in fear that their modest, turn-of-the-century abodes will be dwarfed by replacement castles whose imported architecture shows little regard for the neighborhood's vernacular heritage.

Municipal lawmakers, in turn, have countered with an array of anti-mansionization ordinances that cap roof heights, limit footprints in proportion to the lot size, and, in some cases, dictate massing, cladding, and other material details. Some have enacted temporary moratoriums on new construction simply to buy time and cool tensions between opposing forces.

What's a builder to do in the midst of this political three-ring circus? Meet two builders on opposite coasts that have bet their livelihood on teardowns, executing them with sensitivity and finesse. It's all about building bridges, they say. And tearing down false assumptions.