Thursday, September 15, 2016

Upcoming Policy Changes to Backyard Cottages and Accessory Dwelling Units

We are very excited about the proposed policy changes currently under review by the City Council that would modify current development standards making it easier to construct Backyard Cottages and Accessory Dwelling Units here in Seattle.   Even with the recent appeal from the Queen Anne Community Council, this new legislation is expected to pass by the end of the year.

For those not familiar this housing typology, the following is a brief summary of most everything you need to know.


DEFINITIONS

An Accessory Dwelling Unit (ADU) is a self-contained living unit located within a single family house and is often referred to as mother-in-law suite or granny flat.  They are typically constructed within basements, attics and attached garages additions.  And along with DADUs, they have a separate entrance and their own living space, a small kitchen, a bed and bathroom.

ADU in attic or basement
ADU addition

A Detached Accessory Dwelling Unit (DADU) is a separate living unit located on the same lot as a single family home and is often referred to as backyard cottage or carriage house.  They are typically separate, free-standing structures or constructed within or on top of a detached garage.

DADU garage conversion and 2nd floor addition

FYI - in most cities throughout the country, other than Seattle, an ADU is defined as a 2nd separate living unit located within, attached to, or detached from a single family house. Seattle however, has decided to make the distinction between an attached (ADU) and a detached (DADU) accessory dwelling unit - so if you're doing research, keep this in mind.


HISTORY

Accessory dwelling units can be traced back to the early twentieth century in cities throughout the United States, prior to the implementation of zoning regulations.  In the 1940’s and 1950’s it was common for underutilized spaces within homes to be converted into private living spaces to satisfy changing family needs and provide rental income.  Shortly thereafter a boom in urban sprawl and an emphasis on the nuclear family sparked concerns about perceived risks and impacts of ADU’s within neighborhoods, ultimately leading many jurisdictions to prohibit their construction.

Today, in Seattle and many cities throughout the country, the lack of affordable housing has brought this typology back into the forefront.  In Seattle,  ADUs have been allowed in all single family zoned lots since 1994 and DADUs since 2010 but unfortunately, only about 2,500 units have been constructed.  Just 140 miles north in Vancouver, a city with less than half the number of single family homes, the total ADU + DADU count is more than tenfold.  How can this be, you ask?  Less restrictive regulations, city implemented incentives and a true desire to encourage growth.  It's a similar prescriptive path which Seattle will be enacting, pending approval in the upcoming months, which will hopefully lead to similar results.  


WHY ADUs and DADUs ARE A GOOD THING

For the City
They increase affordable rental housing, utilize existing house stock without compromising the scale and character of neighborhoods, encourage better housing maintenance and neighborhood stability, reduce sprawl and environmental footprint, and are viable alternative to larger scale housing projects

For the Homeowner
They provide rental income, offer a private living unit for family members or friends, create aging in place opportunities and increase property values

For the Renters
They offers affordable rent and access to amenities in single family neighborhoods such as privacy, quieter environment and less traffic congestion


PROPOSED POLICY CHANGES

The following is the list of proposed policy changes, when implemented, should encourage the construction of more ADUs and DADUs throughout the city.

1.  Allow an ADU and DADU on the same lot
Current policy stipulates that a single-family lot can have an ADU or a DADU, but not both.  New legislation would allow single-family lots to have an ADU and a DADU.

2.  Remove off-street parking requirements
Current regulations require one additional off-street parking space for either an ADU or DADU unless the lot is located in an urban village.  New legislation eliminates the off-street parking requirement.

3.  Modify the owner occupancy requirement
Current regulations require that the property owner occupy either the main house or the ADU/DADU.  New legislation would terminate the requirement 12 months after the final inspection for the building permit.  Unfortunately this is only a partial step in the right direction.  The owner occupancy requirement is a significant hurdle for construction financing, as the bank cannot rent out the ADU/DADU in the event of a default.  This modification may not have much of an impact on production.

4.  Reduce the minimum lot size for DADUs
Current regulations stipulate that only lots 4,000 square feet and larger can have DADU’s.  New
legislation would reduce the minimum lot size to 3,200 SF however, all other development standards that regulate the location and scale of DADU’s, such as minimum separation between structures and the maximum lot coverage limit, would remain in effect.

5. Modify the maximum height limit for DADUs
Current regulations determine the maximum height of a DADU based on the width of the lot, with overall height limits set too low to allow conventional roof geometry.  New legislation would simplify this standard and slightly increases the maximum height limit up to 2 feet depending on the lot width.

6.  Modify the rear yard coverage limit for DADUs
Current regulations limit coverage of a required rear yard to no more than 40 percent. New legislation would allow an additional 20 percent coverage only for one-story DADUs to provide flexibility for property owners who may wish to design a DADU without stairs for mobility or universal design reasons.

7.  Modify maximum gross square footage limits
Currently, ADUs are limited to 1,000 square feet and DADUs to 800 square feet. New legislation would maintain a 1,000 square feet limit for ADUs and increase the DADU limit to the same 1,000 square feet.  This legislation also removes garage and storage space from counting towards the maximum gross square footage for ADUs and DADUs.

8.  Add flexibility for entry door locations to DADUs
Current regulations prohibit entrances to DADUs on the facades facing the nearest side or rear lot lines unless that lot line abuts a public right-of-way.  New legislation would allow an entrance on any facade provided that the entrance is no closer than 10 feet to side or rear lot line, unless that lot line abuts a public right-of-way.

9.  Allow certain roof features that add interior space
Current regulations allow these features for principal units in single-family zones but are not allowed for DADUs.  New legislation would allow certain roof features that accommodate windows and add interior space, such as dormers, clerestories, and skylights
     
THE DIFFERENCES BETWEEN ADUs AND DADUs

If you’re thinking about building an ADU or DADU, there are several factors to consider.  As noted above, both share many advantages, but the following are additional issues to consider:

Accessory Dwelling Unit
  • Can provide rental income
  • The space and building systems already exists - construction expense is greatly reduced
  • Does not impact scale or character of neighborhood and often goes unnoticed
  • Does not impact open space of property
  • Unit can often be directly connected to house if so desired (family members)
  • Can be a quick return investment
  • Since the unit is attached, sounds will likely be heard regardless of sound-proofing efforts
  • Privacy.  You’ll likely be sharing some exterior spaces and possibly even some interior
       Detached Accessory Dwelling Units      
  • Can provide rental income
  • Increased privacy and no shared walls and floors/ceiling
  • Clear boundaries can be delineated between units
  • Cost.  Building a DADU is significantly more costly per square foot than building a house
  • Takes away from yard and open space
  • Potential to impact neighbors open space and privacy

LESSONS LEARNED

Below are "before" and "after" floor plans of an ADU we recently completed.  As with most ADUs we’ve designed, the basement was finished space and only required minor interior renovations.  A small, compact kitchen was added along with a new closet for a stacked washer/dryer, and sound attenuation and fire separation was added to adjoining house walls and ceilings.  In addition, access to an electric sub-panel and thermostat was added for independent control of the building systems within the unit.  And the best part - no exterior work was required.  This ADU has 485 SF of rentable space, will be used as a long term rental, rents for $1,200 / month and cost $35,000 which included all project costs.


DADUs are wonderful - who doesn't love a tiny house (?!) but ADUs are typically a bigger bang for the buck.  Based on the ADU project we've designed, returns on investments have ranged from 2 to 4 years.


FINANCING

If you’re unable to finance your project with cash savings, the following conditional loan types are worth exploring and may be viable options depending on your current financial situation.  Some lenders are beginning to catch on but in general, the industry remains unfamiliar with the added value ADUs and DADUs can bring to your property, thus making financing more arduous than necessary.

Cash-out refinancing – Refinance your existing loan for more than you owe, taking out the difference in cash

 Home equity loan &  Home equity line of credit (HELOC) – Also referred to as a second mortgage, both types allow you to borrow money using your home’s equity as collateral

 Renovation financing / FHA 203(k) Combines a construction loan with your home mortgage


REFERENCES

If you’re interested in more information, check out the following:

Additional information on permitting, requirements, guides and reports for both ADUs and DADUs

A Portland based one stop internet source for all things ADU.  Some information may not be directly applicable to Seattle, but we’ve found them to be an invaluable reference nonetheless.


SUMMARY

Seattle's existing neighborhoods are one of the largest untapped resources available for increasing affordable housing stock.  By no means will this typology single handedly solve our housing shortage, but its an easy and beneficial step in the right direction that will have little or no impact on the scale and character of our neighborhoods.  You only need to look at the track records in Vancouver and Portland to see any concerns about changing the character of our neighborhoods have proven to be unfounded. In our pursuit of livability, affordability, community and access to housing for all, we look forward to welcoming more ADU and DADU projects into our community.


 The Cunningham's were cool with DADUs,
you should be too!



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