Mill Valley, California, is not the town that time forgot—although it can sometimes feel like a modern-day Middle-earth. Folksy and friendly, the wooded enclave 14 miles north of San Francisco is traversed by a creek and a multitude of hiking trails, and its houses are dwarfed by redwoods—which in turn are dwarfed by Mount Tamalpais, whose peaks are visible one moment and shrouded in swirling, glowing mists the next.

Over the decades, Mill Valley has retained its laid-back vibe while absorbing newcomers seeking access to peace, nature, and good public schools. Two such transplants, Tim and Stefanie Rosa, formerly of La Jolla, were renting a place near Mill Valley’s downtown when they stumbled upon their future home.

“We used to walk Ulu, our late Newfie, past this little cottage from the forties, and dream about how cool it would be to live there,” recalls Tim, who at the time was VP of Brand Development at Electronic Arts and is now an SVP and the chief marketing officer at Fitbit. “Then a year later, our realtor called and told us it was for sale,” says Stefanie, a graphic and interior designer who has a number of home renovations under her belt with both Tim and her father, a developer.

Like some kind of canine dowser, Ulu also guided them to their architect, Peter Pfau, of Pfau Long Architecture. They were out on a romp at Stinson Beach when the dog pulled them toward one of Pfau’s classic houses on a street called Sonoma Patio. “It very much has the rustic modern feeling of a Sea Ranch house, which was exactly how our aesthetic was evolving,” says Tim.

Pfau took a look at the cottage the couple wanted to buy even before they made an offer. “From the outside, it had this picture-perfect little pitched roof, like the quintessential house form,” recalls Pfau. “And from the inside, well, it was like the worst place you ever stayed in college.” The challenge was to open up the 600-square-foot knotty pine interior while retaining the street-facing, peak-roofed profile, which was essential to grandfathering in the setbacks.

"From the inside, it was like the worst place you ever stayed in college." —Peter Pfau, architect

Pfau took the structure down to a couple of studs and scraped out the interior, creating a large, sun-washed great room with a cathedral-like ceiling and large windows—one of which perfectly frames Mt. Tam in the distance. Working within a tight space on the small lot, and determined to save a mature oak growing in the middle, Pfau devised a long, narrow addition that turns off the side of the original cottage. This shed-roofed new building houses a hallway, two bedrooms, two bathrooms, and a powder room. A media room is inserted into the triangular intersection of the two structures, bringing the total size of the home to 1,500 square feet, excluding the garage. The freshly renovated house looks out to sweeping views beyond, with a generous outdoor deck hugging the side. The materials—unpainted cedar, board-formed concrete, and a zinc roof that will develop a patina over time—further integrate the home into its surroundings.

From the street level, a path leads past the garage and an outdoor shower—perfect for Tim’s après-surfing ablutions—through the lower garden and up to a sliding glass front door. Inside, there is no wasted space. “It’s very boat-like, how overthought it is in its compactness,” says Pfau, who worked in conjunction with project manager Melanie Turner.

In fact, the interior is surprisingly expansive, with a minimalist approach to materials. There are radiant-heated concrete floors and white oak casework designed and made by Henrybuilt, known primarily for its crafted, customizable kitchen systems. Having collaborated on a previous project, the Rosas knew that the company would play an integral role in helping them maximize storage throughout the house. “Any built-in you see, they designed it,” says Tim, who worked with Chris Barriatua, a Henrybuilt VP who moved his own family from Manhattan to Mill Valley in order to set up one of the company’s three showrooms in what had been a 4,000-square-foot garage.

Barriatua also relished the ongoing process of give-and-take. “The early thinking with the kitchen was to do the obvious, and just line the walls with cabinets and put the sink under the window,” he recalls. “And then one Monday, I got a sketch from Stef, saying that she and Tim had been tinkering with the idea of breaking out an island. It was the perfect trigger for creating a feeling of separation between the ‘shell’ of the room and the kitchen.”

The new approach included a series of components that were placed along the great room’s side wall and together serve as a combination library, entertainment center, office, pantry, and refrigerator. The result is a room with plenty of storage that isn’t overburdened by floor-to-ceiling cabinetry. “In our work,” says Barriatua, “we put a lot of focus on the relationship between density and openness—making sure there’s enough storage for people’s things, and enough ‘white space’ to create a feeling of grace.”

So far, everything seems to fit, including the Rosas’ five-year-old son, Leo, who has a cozy reading loft in his bedroom and a playhouse in the garden (with walls he is encouraged to paint). And like many who once couldn’t imagine being anywhere but in a city, Tim and Stefanie now feel equally passionate about waking up a few minutes from the creek where Leo splashes almost every day and the mountain where they hike. “It’s funny, as Leo gets bigger, we wonder if we need more space,” says Stefanie. “But for now we’re staying put. We have neighbors who live in a much larger house, and they’re actually kind of jealous, because they never see their kids. In a smaller space, I think, you just tend to stay together more as a family.”

“It’s very boat-like, how overthought it is in its compactness.” —Peter Pfau