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Tuesday, February 27, 2024
Feb. 27, 2024

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Seattle is now building more ADUs than single houses

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SEATTLE — The addition of accessory dwelling units in Seattle has surged since 2019, when the city revamped its regulations to encourage their creation, pitching the units as a way to add density gently and provide a wider menu of living opportunities in neighborhoods dominated by single houses.

Almost 1,000 ADUs were permitted last year, up from 280 in 2019. That’s a 250% increase.

So says a new report that the City Council will receive Wednesday, giving council members a chance to evaluate Seattle’s approach and providing context for conversations in the state Legislature. There, lawmakers are considering bills that would reduce restrictions on ADUs and other “missing middle” housing in communities across Washington.

Proponents of those bills can point to ADUs in Seattle as proof of policy decisions boosting a city’s housing supply with diverse choices in popular areas, while skeptics may question how affordable some of the new choices are — or simply object to density in their neighborhoods.

The state must add 55,000 homes per year over the next 20 years to meet demand, according to Department of Commerce projections published last week. More than half must be affordable to low-income residents, and new homes are needed at all income levels, the projections said.

The simplest takeaway from Seattle’s new report is that ADU production is up. The city granted permits to 988 units last year, and more than 650 were built — not all projects are built during the year they get permitted — outpacing the construction of single houses for the first time.

In 2022, Seattle permitted 437 attached accessory dwelling units (sometimes called AADUs or parent-in-law apartments) and 551 detached accessory dwelling units (sometimes called DADUs or backyard cottages).

The bulk of the city’s housing production is still apartments, but a variety of people are now building ADUs, like homeowners with aging parents, couples who want rental income and developers testing a new market.

The upswing is “just indicative of how much demand there is” for housing options in all neighborhoods, said Matt Hutchins, a member of the Seattle Planning Commission, who designs ADUs with CAST Architecture.

There are other lessons in the Seattle report, put together by the city’s Office of Community Planning and Development and Department of Construction and Inspections. For example, ADUs are popping up all over, especially in suburban-style zones otherwise closed off to housing growth.

Many new ADUs are being developed in conjunction with new houses in three-unit packages that resemble town houses, the report notes. Many others are being added behind existing houses, such as backyard cottages.

Meanwhile, a growing number of ADUs are being permitted as condominiums and sold separately. They’re not necessarily cheap, with a median unit selling for $732,000 in a limited sample analyzed for the city’s report. But because they’re smaller, they’re less expensive than the single houses on the same properties, with a median house selling for $1.2 million in the city’s sample.

The report estimates that 12% of ADUs in Seattle are currently licensed as short-term rentals like those advertised on Vrbo and Airbnb.

2019 changes

Spurring the addition of ADUs today are changes that the City Council made in mid-2019. Since then, Seattle has allowed two ADUs per lot (either two AADUs, or one AADU and one DADU), rather than one. Property owners are no longer required to live on site, and ADUs no longer require off-street parking. DADUs can be built larger (up to 1,000 square feet, plus garage space), taller and on smaller lots than before.

The council not only reduced restrictions on ADUs but also tightened restrictions on extra-large houses, sometimes called “McMansions.” Since 2019, the city has limited the aboveground living space in a new house to half the square footage of the lot. For example, a new house on a 5,000-square-foot lot is capped at 2,500 square feet of aboveground living space.

Then-Councilmember Mike O’Brien said he hoped the rule would discourage people from replacing small older houses with expensive McMansions and would, on lots undergoing redevelopment, encourage them to include ADUs.

In 2019, proponents of the changes included urbanists, unions and homebuilders. AARP, also another supporter, said ADUs can provide retired homeowners with extra income or help aging parents live by their children.

“This is going to be an opportunity to invite so many more people into some of our most exclusive neighborhoods,” O’Brien said at the time.

Critics of the rules, led by the Queen Anne Community Council, warned about the regulations incentivizing developers to replace older rental houses. They said the changes could make the city’s low-density blocks less desirable and create parking problems without yielding affordable housing.

The report

The new report sheds light on how the city’s approach is playing out.

ADUs remain a relatively minor component of Seattle’s housing production, given that more than 11,000 homes were built last year in multifamily structures like apartment buildings and town houses.

But there’s no denying that ADUs are becoming more numerous, and the vast majority are being permitted in zones where apartment buildings and town houses are barred, the new report shows. Such zones (the city recently changed their name from single-family zones to neighborhood residential zones) cover much of Seattle and have become hard for people who aren’t wealthy to access as home prices have soared.

Hot spots for new ADUs include Greenwood-Phinney Ridge, the Central area, Northgate-Maple Leaf, Ravenna-Bryant, Sunset Hill-Loyal Heights, West Seattle Junction-Genesee and Wedgwood-View Ridge.

Before the 2019 changes, Seattle planners estimated that the city would see 4,430 ADUs built and 1,580 single houses torn down over 10 years, under the new regulations — more ADUs and fewer demolitions than under the status quo. Those predictions appear somewhat realistic, based on data from 2020 to 2022, with 1,336 ADUs built and 554 single houses razed so far..

More ADUs are being permitted in wealthy areas, because neighborhood residential zones tend to be well-off, the Seattle report says. Most ADUs permitted last year were in tracts considered to be at low risk for the displacement of people of color and low-income residents, according to the city’s analysis.

Nearly half of new ADUs in neighborhood residential zones in 2022 were permitted along with new main houses, mostly in house-AADU-DADU packages (you can sometimes spot such projects because they often include umbilical cord-like connections to comply with the city’s AADU regulations). The rest were permitted on their own, mostly as backyard cottages.

About one-third of new ADUs are being permitted as condos (33% in 2021, the most recent year for which reliable data was available), the report says.

The McMansion ban appears to be working as intended; two-thirds of single houses in 2022 were permitted along with at least one ADU.

In zones where denser housing is allowed, like the urban villages that serve as Seattle’s growth hubs, ADUs are in some cases being used by developers of affordable and market-rate housing to build clusters of as many as a dozen cottages — larger projects that can reshape blocks.

Firsthand experiences

Talking to Paul Steenstra, Chris Cloud and Trevor Johnson illustrates how accessory units are being constructed for multiple reasons.

Steenstra, 58, and his wife, Jennifer, added a cottage behind their house in Northwest Seattle so Jennifer’s mother, Madge Sempert, could live independently on their large lot. They also liked the idea of renting at some point to people who couldn’t otherwise afford the area, like public school teachers, said Steenstra, who works for the Low Income Housing Institute.

“We had the space to do it and also just wanted to steward this property … in a way that could help others,” he said, starting with Sempert, who loves her new cottage’s sprawling windows and the tranquil yard she gets to share.

“I get invited to dinner most days,” the 88-year-old joked this week.

Cloud, 31, and his partner, Adi Braun, added a backyard cottage on Beacon Hill after buying a house in 2019, to add density and bring in extra income.

They live in the cottage and rent out the main house, partly because the cottage is well-placed on the property for their dog, said Cloud, a self-employed metal fabricator who built most of the cottage himself. Renting out the main house helps with their mortgage “big time,” Cloud said.

Steenstra and Cloud each used an ADU design by CAST Architecture that’s among 10 preapproved by the city, under a program meant to expedite permits. They might have been able to build their cottages before the city’s 2019 policy changes, but the preapproved designs helped, they said.

In contrast, Johnson is a developer whose company, Blackwood Homes, is building house-AADU-DADU packages. The ADUs in those projects, which can sell for more than $700,000, aren’t going to serve low-income residents without subsidies. But Johnson describes them as homes that a middle-class, dual-income couple might be able to buy, adding, “If we’re going to have more people moving here, we’re going to need more units.”

Johnson recently built a three-home package on his own property in Greenwood; he lives in the main house with his family while renting one ADU to an employee and the other to Ukrainian refugees, he said.

While permitting data doesn’t say much about who’s building and living in ADUs, a recent survey by the city offers clues (there was a 21% response rate, mostly from people who own ADUs but don’t live in the units themselves).

More than half of ADU owners who answered the city’s survey reported annual household incomes of at least $150,000, while about half of nonowner ADU occupants reported incomes of under $75,000. The owners and occupants who responded to the survey overwhelmingly identified as white.

Respondents reported a wide range in monthly rents being charged for ADUs, though the median was $1,650, well below the median rent for a one-bedroom apartment in Seattle. The median cost to build an ADU was $200,000, within a wide range. Most ADU occupants reported parking one car (44%) or zero cars (46%) on the street.

The city’s report says help may be needed for less-wealthy homeowners, including homeowners of color. Work began in 2020 on a pilot program with affordable loans for ADUs, but the funding was reallocated after COVID-19 hit.

“This remains a priority,” particularly because the city anticipates additional density changes in the years ahead, the report says.

Some advocates have called for incorporating models like co-ops and community land trusts with density, saying zoning changes won’t advance equity unless everyone can access the new housing.

Statewide proposals

Seattle’s recent experience with accessory units is coming under review as lawmakers are eyeing changes for communities across Washington.

There are two bills alive in the Legislature that would reduce restrictions on accessory units, and there are other density bills, including a proposal meant to legalize more middle housing. House Bill 1337 would remove many barriers to ADUs, while Senate Bill 5235 would also remove some. House Bill 1110 would allow duplexes, fourplexes and sixplexes in more areas.

Rep. Mia Gregerson, D-SeaTac, prime sponsor of HB 1337, is encouraged by the “amazing” increase in accessory units in Seattle, she said.

“This is one way to address the housing supply shortage,” while adding access points for ordinary people to get involved, Gregerson said, making the case that ADUs can help working-class property owners and multigenerational households strengthen the roots they’ve planted in her district.

The reality that middle housing isn’t always cheap doesn’t mean it shouldn’t be legalized, Gregerson added. The Legislature must also bolster renter protections and spending on subsidized housing, she said.

Rep. Tana Senn, D-Mercer Island, who opposed Gregerson’s bill in a recent House vote, also applauded Seattle’s results. But she said she believes cities should retain more control over their own regulations. Some communities in her district have curvy roads with no street parking, so accessory units may not make sense there, she suggested, adding, “Each city is unique.”

Hutchins, the ADU architect and advocate, said statewide rules would be better than a local patchwork of restrictions that can be ADU “deal killers.”

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