How Seattle Un-Killed Microhousing

 

Today, Liz and I had the unique opportunity to visit the mayor's office for the signing ceremony of new legislation complying with House Bill 1998. This landmark bill requires cities to permit co-living (also known as congregate housing or microhousing) in any zone where multifamily housing is allowed.

This moment marked the closing of a narrative arc that began in 2014, when anti-microhousing rules first entered the land use code. Over the years, anti-microhousing sentiment gave birth to increasingly restrictive code interpretations, director’s rules, and agency policies. What started as a steady stream of microhousing development dwindled to a trickle and, eventually, to nothing at all.

For the past decade, I’ve spent countless hours on this issue—writing articles, developing projects, giving tours to public officials, strategizing with councilmembers and the mayor's staff, debating with the building department, and making my case to the construction code advisory board. In all that time, I didn’t move the needle even a fraction. I often felt we were winning the argument on merit, but it seemed clear that no one was willing to spend an ounce of political capital to reverse the damage already done.

This year, everything changed. With the passage of HB 1998, the Washington State Legislature bypassed city-level resistance entirely, mandating that cities allow co-living in any zone permitting multifamily housing of six or more units. In one sweeping move, Seattle’s microhousing ban was not only undone—it was effectively nullified for every city in the state.

This outcome didn’t happen by magic. It was the result of work by many dedicated individuals. The policy wizards at the Sightline Institute crafted the legislation, built coalitions, and rallied sponsors. Representative Mia Gregerson and Senator Jesse Salomon championed the bill, lending their names and political capital to its success.

The tours we gave to officials like Mia and Jesse played a role by demonstrating how co-living buildings could be both affordable and desirable places to live. Liz Pisciotta from our office designed the interiors that humanized these spaces, making them warm, inviting, and approachable. Her work undoubtedly helped seal the deal.

Development partners and clients like Ezra and Selome Teshome, Brad Padden, Dave and Sara Sharkey, Charlie Waterman, and Ken Tousley also deserve recognition. Their belief in our vision helped us create projects that demonstrated what co-living could achieve.

And no list of credits would be complete without recognizing Roger Valdez. Roger was the pioneering advocate—the Ur-advocate—of microhousing. He laid the foundations of the economic and moral case for microhousing that brought us to this moment. He did so long before it was popular, and often in the face of overwhelming opposition. By the time the rest of us were getting suited up, Roger had already been in the arena for years.

Roger wasn’t one to prioritize politeness or winning friends, and people like that don’t often get invited to shake the mayor’s hand. But make no mistake—Roger deserves a tremendous amount of recognition and credit for getting us to this season.

Speaking of hard truths…

While this legislative victory is significant, the path forward remains challenging. Over the past decade, Seattle missed the chance to build thousands of microhousing units during an economic upcycle. Now, although the zoning obstacles have been removed, the broader economic and regulatory environment makes development almost impossible.

For one, skyrocketing costs are a major barrier. The recent leap forward in energy code requirements has added about $25,000 to the cost of building each new unit. For standard apartments costing $250,000 per unit, that’s a 10% increase—painful but manageable. But for microhousing, where units are budgeted at $100,000, it’s a 25% cost hike. That would make most projects financially unviable or would raise the rents to a point where it no longer serves its essential function -- housing that is affordable to minimum wage workers.

Then there’s the multifamily tax exemption (MFTE) program, a program that is an essential tool for workforce housing development, but which has long been hostile to microhousing. The latest proposed update outright excludes buildings with units under 400 square feet from eligibility. This is untenable, as nearly every microhousing project we’ve developed in the past decade has relied on MFTE for financial feasibility.

The broader rental market has also become increasingly troublesome. Enhanced tenant rights and anti-eviction measures, while well-intentioned, have made it difficult for landlords to operate sustainably. Some renters now correctly perceive that paying rent is somewhat optional, leading to a huge spike in delinquency rates. Microhousing operators have been hit especially hard. Every operator I know has stories of tenants living rent-free for years due to backed-up courts, stringent eviction laws, and aggressive legal tactics employed by tenant advocacy groups.

These changes have fundamentally broken the business model for renting to low-income tenants. Banks and investors have noticed. Without a fairer balance between landlord and tenant rights, it will be challenging to convince investors and lenders that development of new microhousing can be a viable business.

All that aside…it was a good day. Today, we’ll celebrate. Tomorrow, we’ll get back to pushing that rock up the hill…