Seattle ripe for ‘cottage’ industry

Seattle ripe for ‘cottage’ industry
A recent survey of Seattle found that 55,000 lots have the capacity for a cottage, also known as a detached accessory dwelling unit. Their construction could help young professionals and retirees looking to downsize, while providing more rental units. Photo: accessorydwellings.org

The city of Seattle has 55,000 ways to add more rentals to the market without developing new land. That’s according to a recent article in the Puget Sound Business Journal, which reported a tool developed by real estate startup CityBldr identified thousands of lots in the city of Seattle that could accommodate a cottage, also known as a detached accessory dwelling unit (ADU).

It’s a creative way to provide additional rental opportunities that has seen growth in Portland following deregulations that King County building industry members say Seattle might also consider in order to improve housing affordability.

“We want new single-family homes, but there’s opportunities with existing housing stock to create more places for folks to live,” Jennifer Anderson said. She is the King County Manager for the Master Builders Association of King and Snohomish Counties.

One of the advantages of cottages are their wide appeal. Young professionals interested in buying a home need rental income in order to qualify for a mortgage. Or, they don’t want to live in an apartment, but can’t afford Seattle’s sky-high home prices.  The latest figures provided by Rent Café show that a studio apartment in Seattle rents for around $1,440 a month.

Then there are elderly couples who may want to downgrade to a smaller space but without necessarily selling their homes; a fifth of adults 65 and over live in multigenerational housing, according to a 2015 American Community Survey.

Interest in ADUs had picked up in Seattle, according to CRD Design Build President Denny Conner. The remodel company offers a variety of ADUs, including cottages.

“Seattle’s a pretty expensive town for building anything,” he said. “It’s a long-term investment. You’re not going to get your money back in the first few years, but it’s also one of the places you can borrow money and still deduct. Even if it’s for an accessory dwelling unit, it’s on your property so it can get wrapped into a home mortgage.”

Yet, myriad regulations can either deter homeowners from building cottages or encourage them to rent out rooms in their houses for short-term use through services such as Airbnb. That includes full impact fees and traffic impact fees, as well as parking and setback requirements.

Removing any of these can make cottages a more attractive option, says Anderson. While “there’re a lot of things that can be done to incentivize ADE…waiving impact fees is the biggest thing that can be done.”

In Seattle, one of the city’s most constricting regulations is the off-street parking requirement that Conner says can make it impossible for homeowners such as himself to build one on their property due to insufficient space.

City regulations require two nine-foot wide parking spaces, one for the house and for the cottage. Also, parking cannot be on the first 20 feet of the property.

“That’s really the most challenging thing,” he said.

City regulations also require a minimum lot size for a cottage (4,000 square feet), along with a maximum square foot size for the cottage itself (800 square feet).

“Providing increased flexibility (with those requirements) is the best way to incentive,” Anderson said.

Seattle city officials may want to look at Portland’s uptick in ADU permits issued. In 2010, only 86 were issued. That same year, the city waived system development impact fees and loosened regulations such as owner occupancy requirements.

The result: By 2012, the number of permits had doubled. In 2016 that number reached 615.

Other cities in King County with friendly building codes for ADUs include the cities of SeaTac and Renton. SeaTac sets a minimum size for cottages, but allows flexibility on how large it can be depending on the type; a parking spot is required, but can be waived under certain conditions.

In Renton, impact fees are reduced or waived for ADUs in new housing construction for subdivisions of 10 or more lots.

Incidentally, Anderson says one of the biggest barriers can be city residents, rather than the city. Such opposition led to the death of the micro-housing industry in Seattle.

“People are concerned about having additional renters in the area. They’re concerned about parking…is always an issue. They’ve definitely got the ear of their elected officials. It can be very challenging.”

Conner agrees. “So many people in this town that resist any kind of change to our housing regulations because they think they can keep things the way they are, and they can’t. There are just too many people coming.”

It’s a situation Mark Villwock faced when he went to build a detached in-law apartment on his rural property in Snohomish County and found out his homeowner’s association prohibited them. Villwock is with the vice president of LDC, Inc, a civil engineering and survey firm.

He told Lens that he was eventually able to get around the ban with a variance through the administrative conditional permit use process, though “I had to jump through some hoops to get my neighbors to sign off on it. Anybody thinking about doing that should look to see if it’s an allowed use.”

Although building it cost $180,000, he said “as much as that is, there’s a lot of people who could sell their house, build one of these things and still have some left over. I was utterly shocked when we were building it how many of our friends were like, ‘We want to do this for our parents!’”

Two takeaways from his experience that can encourage other homeowners to build cottages are first to speed up the permitting process, and second to provide some wiggle room for properties that almost meet requirements. “If you’re so close to making it happen, but in some jurisdiction you’re one tree credit short or one foot short of a setback,” flexibility should be offered.

With the recent state property tax increase on top of the new ST3 property tax, rising housing costs for Seattle homeowners could prove the impetus to fill many of those 55,000 lots.

“As housing becomes more expensive and an aging population…wants to stay in their home. They’re going to see the value in building…a detached accessory dwelling unit,” Conner said. “For an older person on a fixed income, if they’ve got the savings, it’s really smart to invest it.”

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