'Saviour of Santo Stefano': One man's crusade to save southern Italy's ancient villages

Daniele Kihlgren came around the Gran Sasso mountain on his motorbike one day 11 years ago and saw Santo Stefano di Sessanio shining in the distance, and it was, he says, "una folgorazione" – "an electric shock". High stone walls shoot up from the mountain's flank, as a crenellated tower floats above the terracotta roofs. Inside, narrow lanes corkscrew towards the summit, here and there giving on to small piazzas and sunlit courtyards. It is a city in miniature: anyone who has seen the Tuscan or Umbrian hill towns knows the form. But in the case of Santo Stefano, it sat in perfect harmony with the woods and rolling foothills of Gran Sasso. Italy's rampant cement industry had got nowhere near: the place was pristine – and practically abandoned, with a population of about 100.

Kihlgren, who is a wealthy man, fell in love with Santo Stefano and bought his first house there and then. Soon, he owned eight more, and a quarter of the town, the owners long since lost to New Jersey or Toronto, was in his pocket.

What he did with them all is now well known. He struck an unprecedented deal with the local authority: in return for a guarantee of inedificabilita – a blanket ban on new building – he promised to invest serious quantities of money in bringing it back to life. Five years after he first set eyes on the village, and after an investment of €4.5m, Sextantio threw open its doors, and introduced discerning travellers from Italy and elsewhere to a face of the rugged Abruzzo region that they had never seen before, and an entirely new type of hotel: what he calls an "albergo diffuso", a "scattered hotel". No new structures were required; instead, reception, restaurant and guest-rooms occupied different medieval cottages clustered together on the town's slopes.

It was an immediate hit: in 2004, the year the hotel opened, the town had 79 beds available for guests, which were occupied for a total of 285 room-nights. Sextantio added 23 rooms to the total, and by 2008, the number of room-nights had leapt to 7,300. Kihlgren was also renovating a few village houses for sale, at wildly exorbitant prices by local standards. Soon, the mayors of half the dying hill towns of southern Italy, from Abruzzo to Calabria, were knocking on Kihlgren's door, demanding the same medicine.

Then, at 3.30am on the morning of 6 April 2009, the earth of Abruzzo quaked.

Daniele Kihlgren owes his money to cement, but he has devoted his life to stopping its advance. Though the phrase "consuming passion" trips lightly off the tongue, it is rare to find the real thing – but Kihlgren has it. I was with him for two days and he never slowed down. He never stopped talking. He has thrown all his energy into thwarting the plans of the Italian cement industry, to which his family's company belongs, to cover what remains of the peninsula in the stuff.

Italy has an insatiable appetite for cement. And this is unfortunate. They splash it around all over the place, especially where they shouldn't. Wonderful, ancient cities such as Rome and Naples are encased in armatures of reinforced concrete housing estates. Lax and corrupt planning regimes up and down the country – particularly down – mean that the green hills of Lazio and Campania and Sicily, so pretty under the Mezzogiorno sun, are littered with modern, cement-made villas. Each enjoys the magnificent view which it plays its own small part in ruining. The developments have no logic except to keep on keeping on, until such once-upon-a-time beauty spots are carpeted in the products of Italcement, Caltagirone and Milesi, the Kihlgren family firm. There is no reason why the process should come to a halt: once the pristine countryside has been violated a few times, there is no longer anything to preserve.

Why don't they get it? Why don't they see what they are ruining so casually? With the exception of a few places such as Tuscany, where for the most part the authorities have had the wit to keep things in check, all of Italy is going this way.

The only other places remaining immune are those that are so poor, so thinly populated, so marginalised by history, so miserable in their destiny, that the national delight in splashing cement around stops a few miles short: places such as Santo Stefano. They are not wiser, more virtuous or far-seeing. They are just more broke. But they may also, by the caprice of history and trade, happen to be stunningly beautiful – in which case, the fortunes of the past and the misfortunes of the present unite to give Kihlgren what he, and only he, realised was an amazing opportunity.

Kihlgren had a messy upbringing. His father Bertil, son of a Swedish diplomat, married Rosella Milesi Saraval, member of a family from Bergamo, northern Italy, which had grown rich on cement. His parents split up when he was two; Kihlgren, a rebellious, tormented child, was expelled from three schools in Milan. In the process, he acquired an abiding hatred of communism, to which all of his schoolmates and their parents adhered – "a religion in Italy", he calls it.

Rejecting the polite Italian north in favour of the rackety and chaotic south, he studied philosophy at the University of Naples. He dabbled in hard drugs (his elder brother Edoardo was to die from a heroin overdose), and became HIV positive after using an infected needle. The only symptom of the virus is chronic fatigue, from which he has suffered for more than 20 years; he has tried every possible cure without success. Today, he gives the impression of a man driven by demons, haggard and groggy with fatigue but unable to slacken his pace. He talks a mile a minute, and rambles from subject to subject like a drunk with verbal diarrhoea – with the difference that most of the time he makes sense.

Kihlgren insists that he is "italianissimo" despite his "barbarous" name and his foreign blood, and superficially it is true: born and raised in Milan, he speaks no Swedish ("a very ugly language, all that gasping"). But his looks are perfectly Scandinavian, and his wealthy, cosmopolitan upbringing and random wanderings have left him with a very un-Italian way of looking at the world, and at Italy in particular.

The insight which changed his life, and which has the potential to change the destiny of swathes of southern Italy, too, came to him 20 years ago, on his first motorbike tour of the country, when he visited Agrigento on the southern coast of Sicily, celebrated for its marvellously intact ancient Greek temples – and notorious for the ugly modern development that now crowds around them.

"I arrived in the Valley of the Temples and I asked myself, how could they be such idiots as to ruin this beautiful heritage?" he says. "The man who builds his house more or less illegally here, next door to the temples, is doing damage to himself. If they preserved the beauty of the area, they could take in guests at €300 per night. How could they be such cunts, excuse the language? Why? Why so stupid?"

It was an aesthetic judgement – revulsion from the insensate ugliness that modern man has thrown up within spitting distance of some of the greatest glories of the ancient world – but framed as an economic insight: if they had followed the dictates of beauty instead of ignoring them, the people of Agrigento could have wound up rich. They could have dug themselves out of their holes, instead of fouling the beauty that the past bequeathed them. It is the same insight that he has brought to the mountains of Abruzzo.

After the excesses of his early twenties (today he is 43), Kihlgren found some equilibrium in Pescara, on Abruzzo's Adriatic coast. He moved into a large, plain house on land owned by his family and made an approximation of settling down. He began collecting stray dogs, of which he now has more than 15, and found what he calls the love of his life, a bulldog called Clementina, with whom he shared his bed; she has been replaced, since her death, by two more, Melone and Hollypop. Kihlgren has had plenty of human girlfriends, too, but the compulsory presence in his bed of not one but two large, flatulent dogs makes the arrival of a Mrs Kihlgren vanishingly unlikely. And anyway, bulldogs aside, there really is no room for another passion in his life.

The mountainous region of Abruzzo has always been a poor, marginal territory compared with its lower-lying neighbours, subsistence farming allowing for little in the way of architectural flourishes. But, as the finely worked details of its arches, windows, cornices and courtyards suggest, Santo Stefano, east of the capital, L'Aquila, was different.

In the Middle Ages, it was part of the Barony of Carapelle, a large estate in the hands of Florence's ruling Medici family. As a fuelling stop for the cross-country wool trade, there had been a settlement here since pre-Roman times: as late as the 18th century, remains of the ancient settlement, Sextantio, were still in evidence, though later all the stones were filched for new homes. And as the Europe-wide demand for wool continued to grow, the town prospered and grew in size and sophistication – while always retaining, at 1,250 metres above sea level and 150km distant from Rome, the sense of being somehow mysterious, far away from the teeming cities of Rome and Florence, with its own mountain wisdom and mountain cults, not under the thumb of the Pope.

Then the Italian wool trade went into a steep decline, crippled by competition from abroad, and Santo Stefano – too high up to branch out into other forms of agriculture – lost its raison d'être, and, as a consequence, its population, too.

The good fortune of the town was that its emigrating citizens did not stop at Belgium or the Ruhr Valley, but crossed the Atlantic in search of work. Santo Stefano was thus spared the fringe of pseudo-Tyrolean villas and other inanities which ruin the look of towns whose residents wandered no further than Italy's back door in search of work, then came home when they had made their money.

I first visited Santo Stefano on 10 April 2009, four days after last year's disastrous earthquake (the epicentre of which had been near L'Aquila). Vittorio Sgarbi, the volcanic Italian art critic and trouble-maker, urged me to go and see how they had coped with the seismic waves. I was greatly impressed: all the houses in the albergo diffuso had been invisibly reinforced in the course of reconstruction and had suffered no harm. The only damage was a hairline crack in the wall of one bathroom.

The rest of the town was a different matter. A cement viewing platform inserted at the top of the medieval tower decades before Kihlgren's arrival caused the tower to tumble to the ground, and many other houses were badly damaged. Today, one year on, scaffolding buttresses many of the town's high walls, wooden frames prop up ancient arches, and all that remains of the medieval tower is a scaffolding phantom of the original structure. The town's only through-road was closed until a few weeks ago.

Despite the mess left by the quake, Kihlgren's faith in his project is unshaken. The morning after I arrived, he and his colleagues Innocenzo and Antonio were hard at work on the project's next phase, which involves turning more of the ancient stone cottages into exquisitely desirable holiday homes. The challenge is to do this without sacrificing their souls – in fact, reassembling or reinventing the houses' souls along the way. It is painstaking work in which serendipity plays a large part. But slowly, through trial and error, they are getting close.

Antonio and a village lad stagger in with an old oak door they have unearthed. "Feel the weight of it," says Antonio. It weighs a ton; I can barely get it off the ground. "Molto spartana," ("Very spartan") he says approvingly, and shows me how the door's rough-hewn back reveals that its timbers were hacked directly from a tree trunk. This will do for the door of a closet in the house. '

"Look at this plaster," says Kihlgren fondly from the other side of the room, peering at the wall, which is black with age and smoke and crazed with tiny cracks. Ripe, you would assume, for the plasterer's trowel and a few coats of emulsion – but you would be wrong. This is the surface which emerged after all the decorators' improvements of the past decades had been scraped away, and like the oak door, it breathes the village's medieval life of hardship and simple, frugal beauty – in a place where the Middle Ages finished, Kihlgren claims, only after the Second World War.

Sextantio was a labour of love – but also of keen commercial intelligence. Kihlgren the cosmopolitan saw, as his compatriots failed to, that what foreign visitors love about Tuscany besides its villas, weather and food, is that it is unspoiled – its beauty, at best, is not fatally compromised by the haphazard sprouting of modern development. But in Abruzzo, inedificabilita – the principle that nothing new will be built – is one it has taken him immense effort to get accepted.

"This region was the theatre of a history which finished with emigration and abandonment," Kihlgren says. "That was the end of these towns, but also the reason why they remained as they were, with their values and their uncontaminated relationship with the countryside. And I don't think it's utopian of me to believe that these values can become the real engine of the economy here."

The media, especially the international media, reported the Sextantio project and enthusiasm, and Italy-lovers began to pour in. The value of local property soared, and a revival in local crafts got under way as Kihlgren bent over backwards to source everything, from the restaurant's recipes and food supplies to the handwoven bedspreads in the guest-rooms, to craftspeople in and around the town.

His effort was unprecedented because the heritage of places such as Santo Stefano, he says, has never been given much respect within Italy. "The bourgeoisie was committed to spreading what in Italy represented culture – Rome and nothing else. Only towns which were deliberately planned were accorded respect; spontaneously created towns such as Santo Stefano, which came into being with no deliberate plan and which find their greatest expression in the relationship between town and countryside, these were never considered important.

"I know perfectly well how carefully we preserve the statues of Canova, paintings, important palaces and so on. But the significance of these villages, whose real added value is that they have a relationship with the countryside, has always been dismissed." And this blindness to their beauty, together with the laxity of local planning regulation, leads to their casual destruction. "Why on earth," Kihlgren raves, "when they have the potential to be tourist destinations, when there is absolutely no need to build anything new for industry or for any other purpose, do they continue to build in these places – and always in reinforced concrete?"

Sextantio faced down last year's earthquake, but the timing was atrocious for Kihlgren. Coupled with the economic crisis that arrived six months later, it has given his project the biggest challenge of its young life. Kihlgren's company has bought six other villages which are to receive the Santo Stefano treatment, and already a similar project is up and running in the caves of the city of Matera in Basilicata, which has proved a big hit. But because of the earthquake, Santo Stefano itself, which was intended to be the locomotive of the whole enterprise, is stuck in the tracks.

Before the earthquake, Kihlgren and his team had prepared six abandoned houses for sale; six more are under preparation now. But since the disaster, the selling market is at a standstill. With the town still full of scaffolding and visible damage from the earthquake, no one is in a mood to invest – especially when a small, diligently restructured cottage in the town comes with an asking price of more than €200,000.

The hotel, too, is still suffering from the post-earthquake blight. "The earthquake showed we are doing the right thing in that we sustained no damage," says Maurizio Guccione, Sextantio's managing director, in his office in Kihlgren's Pescara headquarters, "but tourists haven't started coming back to Abruzzo, and that includes Santo Stefano." As the road into the town had been impassable, the hotel has seen no visitors at all since the disaster. The only exception was a wedding last June – two Irish families who "were determined to come, despite the road problem".

Now that the road is open again, the hotel is coming back to life: six weddings are booked and they have 15 reservations for conferences. "But selling houses remains a problem," says Guccione. "Buying a house in a village that has been so visibly damaged is embarrassing. It's a matter of waiting until the memory of earthquake passes for the market to recover."

But Kihlgren is in no mood to wait – and as the sober men he has placed in charge of Sextantio will not put the company's existence on the line, he has gone ahead without them.

In addition to the six towns already purchased, he has bought three more out of his own pocket, with which he intends to show the world where the Santo Stefano idea is headed. To help him, he has enlisted the co-operation of the top British architect David Chipperfield. They are planning "a series of prototypes" in Chipperfield's words; after that, it's the wide world. "All I need is 30 towns," Kihlgren says. "Thirty towns from Calabria to Abruzzo and we can save the south of Italy."

"When I first turned up in Santo Stefano, they thought I was a simpleton," he says. "When I bought the houses, they thought I was an idiot." Even today, with Sextantio's success an acknowledged fact, his manic manner makes him seem more raving fantasist than hard-headed businessman. And the fact is that the two elements in his character are thoroughly intermixed. But there is no doubt that he is a visionary. "He is an irrepressible force, uncontaminated, motivated by ideas," says Chipperfield. "He has levels of naivety that I find convincing. His approach is charming. And it seems to us to have a large relevance, not only to how to deal with old villages but with the whole Italian system, which always works up huge, overarching systems but then achieves nothing. I'm not just interested in his approach to building, but also his way of operating within the culture."

Kihlgren takes us to one of the three new towns he has bought. It is on the other side of the Gran Sasso from Santo Stefano, closer to Pescara, and only a few minutes from the Rome-Pescara autostrada. We drive through a decaying, nondescript village called Musellaro, through a discouraging small suburb of undistinguished modern homes, then follow our leader down a narrow track by the side of a cliff.

Turning a corner, where the modern houses end, we see what he saw: climbing steeply down the overgrown hillside, towards a river, is a village of stone houses. Totally abandoned many decades ago, most of them are without roofs, many missing one or more walls. But they hang together as a village unit, and all confront a stupendous view of the huge, distant form, the vast, slumbering bulldog of Mount Maiella.

Kihlgren looks at us to see if we get it. Do we get it? Do we see what he's driving at? Yes, Danny, we do. And you'll need the energy of Superman to get there.