Seattle's accessory dwelling unit boom continues, outnumbering single-family permits 2 to 1

Seattle has entered a new era of housing, with skyrocketing permits for backyard cottages and in-home apartments, primarily in the city's single-family zoned neighborhoods.

In 2023, the city continued to track a rising number of permits for accessory dwelling units (ADUs), building on a trend that began when Seattle leaders eased regulations around this form of housing four years earlier.

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"Last year, 87% of ADUs were permitted in neighborhood residential zones," Phillip Carnell with Seattle's Office of Planning and Community Development said at a council committee meeting Wednesday. "That is cementing that ADUs are outnumbering single-family residential permits 2-1 in the city."

Carnell added that when new single-family residences are permitted in Seattle, 70% are permitted with one or more ADUs on the property.

An ADU can be a backyard cottage, or an apartment built into a house (commonly referred to as a "mother-in-law" apartment). As such, they are often distinguished as "detached" ADUs or "attached" ADUs. This form of housing is not new to Seattle, but city regulations have long hampered its use. Some neighborhoods have pushed back against them in the past, with concerns of overcrowding, limited parking, and potential effects on home values.

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Over the past 10 years, Seattle began promoting ADUs as an affordable housing option. In 2019, the city established out-of-the box, fast-tracked ADU plans that bypassed much of the permitting process.

Now, according to an ADU progress report out this week, permits are being issued four-times more than before 2020. Data for 2023 shows that there were 482 ADU permits issued in 2020, shortly after the reforms were passed. In 2023, that number went up to 987. Rawan Hasan, with the city's Office of Planning and Community Development, said Wednesday that the ADUs are being used for a range of purposes.

"When they are sold to a new owner, a growing number of ADUs are condominiums," Hasan said. "In 2022, 44% of ADUs were permitted as (condos). Their average selling price was $750,000, compared to $1.18 million for principal dwelling units, and $1.6 million for new detached homes."

Rawan further reported that one-eighth of ADUs are being provided to friends or family for free, and that there are more ADUs being rented out to long-term tenants than short-term occupants (such as people using Airbnb).

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"It's worth mentioning that short-term rental operators are generally limited to operating two units, so we're not expecting a growth in short-term rentals, if at all," Hasan said.

According to the 2023 report:

• The majority (87%) of ADUs are permitted in residential zones, and in neighborhoods where displacement is less likely in Seattle.
• 1/8 of ADUs in the city are being provided to friends and/or family for free.
• 1/3 of ADUs in Seattle are being used as long-term rentals.
• 10% of ADUs are being used as short-term rentals through services such as Airbnb, according to the number of short-term rental business licenses Seattle has issued.
• 47% of ADU permits are for more than two units on a site.
• 13% of ADU permits in 2023 were for Seattle's pre-approved plans.

The report out this week echoes last year's report, which pointed to a rising trend in backyard cottages in Seattle.

It's possible this trend may continue, after state lawmakers passed legislation in 2023 aimed at increasing "middle housing" in cities like Seattle. The city has already begun looking into local regulations and codes with middle housing in mind. Part of the statewide middle-housing move is the encouragement of more ADUs by reducing costs and streamlining permitting processes. HB 1337, passed in 2023, specifically opened up residential zones to the potential of two ADUs per property.