Jul 12, 2023 - Real Estate

Seattle goes big on accessory dwelling units

An accessory dwelling unit with wood siding is shown surrounded by trees, with a paved area in front of it.

An accessory dwelling unit. Photo courtesy of Cottage

Interest in building accessory dwelling unitsmore commonly known as ADUs — spiked across the greater Seattle area thanks largely to new regulations encouraging the construction of secondary housing units.

Why it matters: In cities like Seattle where affordable housing is a chronic issue, ADUs can help relieve the shortage while also providing extra income for property owners who rent them out.

  • In 2019, the city of Seattle adopted legislation to remove regulatory barriers and make it easier for property owners to create ADUs in Seattle's single-family zoned lots. ADUs, which may also be called mother-in-laws or backyard cottages, can be separate living spaces within a house or detached dwellings on the same property as an existing house.

Driving the news: Cities in the greater Seattle metropolitan region saw 2,254 applications for ADU permits in 2022, representing a 25% year-over-year increase, according to an analysis from Cottage, a San Francisco-based platform that helps West Coast homeowners finish ADUs.

By the numbers: Last year, the city issued 988 ADU permits, which was almost 30% more than in 2021 and more than four times the number permitted in 2018 before the new rules were in place, according to Seattle's 2022 ADU report.

  • Cottage's Founder and CEO, Alex Czarnecki, told Axios that despite representing only 20% of the metro area's population, Seattle received 62% of the area's ADU permit applications over the last six years.
  • When the Cottage team crunched the numbers, it found that, on a per capita basis, that's more than any other city in the region besides Kirkland.
A backyard accessory dwelling unit is shown from above, with a larger house to the right.
An aerial view of a home with an accessory dwelling unit on the property. Photo courtesy of Cottage

What they're saying: Nick Welch, with the Seattle Office of Planning and Community Development, said "ADUs are an important tool for expanding housing and building equity as a financial foundation for families."

Zoom out: Nine states have some kind of statewide ADU policy, including Montana, which passed a law allowing ADUs in May. But, according to Cottage, California continues to be the nation's leader in ADUs with 30,000 permits sought in 2022, twice as many as in 2018, the year before statewide ADU reforms went into effect.

  • Last year, one in six houses built in California was an ADU.

Zoom in: Comparatively though, Seattle's ADU market is growing faster than any metro area in California with more than twice the ADU permits submitted per capita than San Diego and the Bay Area, and 72% more ADU permits submitted per capita than Los Angeles in 2022, the Cottage report found.

But, but, but: ADU demand remains far above the number of completed projects with only 37% of ADU permits submitted to Seattle between 2017 and 2021 resulting in a completed dwelling, Cottage said.

  • Part of the issue, Czarnecki said, is too few local contractors that have ADU expertise.
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