A DADU built for sale as a condominium - the owners retained ownership of the primary residence
IN SEATTLE RECORD NUMBERS OF ADUS ARE BEING BUILT. Why build an ADU NOW?
In Seattle 405 AADUs (attached accessory dwelling units) and 513 DADUs (detached accessory dwelling units) were built in 2023, the most ever and an increase of 49% from 2022*. There are as many good reasons why you might build an ADU in Seattle. For Cory and Bree it was an opportunity to leverage their back yard to generate revenue in the form of a new DADU. The project started in 2021 with Microhouse performing the design and permitting and Cory acting as the general contractor. After construction was complete Cory and Bree sold the DADU using a condominium agreement which allowed them to maintain ownership of the primary residence. They used the proceeds from the sale of the DADU to purchase another house where they converted the basement into an ADU and built a DADU which they again sold. Their third DADU will be completed this spring. Cory and Bree are emblematic of one type of ADU developer and development made possible by the most recent code changes made by the city of Seattle, code changes intended to encourage the construction of more ADUs. The most significant of those being the allowance of two ADUs on one property and the removal of the owner occupancy requirement. This in turn made the prospect of building ADUs more appealing to larger developers and most notably those who were previously building townhouses and apartments.
In 2024 Seattle will build more ADUs than townhomes in Seattle
A DADU built as part of a 3 unit project that included the preservation of an existing single family residence
According to the City of Seattle residential permit tracker, permit applications for ADUs for the fourth quarter of 2023 exceed the number of townhouse applications by 40%. The increasing number of ADUs and DADUs won’t come as a surprise to Seattle residents who can see new DADUs and particularly larger developments of one new single family residence SFR and two ADUs popping up in their neighborhoods. In part, this dispersion of development is by city design. By allowing what are essentially triplexes in all residential zones, the areas where ADU developments can be built is much larger than the urban hubs where townhouses have traditionally been allowed. However, the expanded area explains only part of the appeal of ADUs to larger developers. Townhouses are made more expensive by mandatory housing affordability (MHA) fees, required infrastructure improvements, and a time consuming permitting process. ADUs on the other hand, benefit from a streamlined permitting process, no MHA fees, and utilize existing infrastructure. And at the same time, removal of the owner occupancy requirement along with acceptance by appraisers and underwriters has made financing ADUs easier and increased the marketability of ADUs.
LESS IS MORE. The appeal of a well designed DADU
A small DADU designed for multi-generational family - 14ft x 24ft 1 bed 2 bath
Ballard residents Drew and Jacob decided to tear down their "scary little garage" and build a backyard cottage. Now they are living in an intergenerational family compound, sharing their property with Drew’s parents. When they were looking for a house, Drews parents suggested that it would be great to find a place where they could build a DADU for them to live in after they retired. They ended up buying a house that had a scary little garage out back and moved forward with their dream of designing a DADU. Their property is relatively small, just a little over the 3,200 sq. ft., minimum lot size allowed in Seattle for adding a DADU. That meant every square inch had to count. Even with the small lot size the DADU was able to take advantage of natural light and nice views from the 2nd floor. Today Drew’s parents live in the DADU and are able to share in the raising of Drew and Jacobs young daughter.
The compact footprint and careful placement of Drew and Jacob’s DADU created a nice shared yard including a fire pit between the two houses where they can gather together in the evenings. While the number of smaller sized DADUs like this have mostly held steady, a greater percentage of larger DADUs are being built. Given the cost of construction and site and utility improvements, there is a certain economic logic to building the largest ADU possible. Certainly, most developers will maximize the amount of built area in order to increase their profits. However, as this example illustrates, much can be said for thoughtful designed smaller structures. DADUs exist in residential zones which are cherished for beautifully landscaped yards and open space. One of the unique opportunities for DADUs, as opposed to forms of multi-family housing, is the potential for connection to the landscape and for social interaction.
PLANNING A DADU? Your biggest asset is your yard.
Compact DADU nestled in the landscape -This DADU has a footprint of 14ft x 28ft , 1 bed, 1 bath
The serene exterior of this DADU illustrates one of our favorite design principles. Difficult sites often have the greatest potential. This cottage is located on a steeply sloping environmentally critical area (ECA) site. The little used yard nestled in among mature trees was the best and only possible location for the cottage. The cottage itself is quite small but feels larger in part because of the interior finishes but also the abundant use of windows which allowed us to "bring the outside in". Here we benefited from the mature trees and integrated landscaping. The site design and retaining walls were shaped by the need to keep as much of the excavated earth on site as possible. Soil removal had to be done by hand, often in buckets, up a narrow stair and carried to the street.
SOMETIMES MORE IS MORE. How big can an ADU be in Seattle?
Nearing completion. - A DADU for a family of four with 3 bedrooms and 3 baths plus a garage flex space 1,684 sq. ft. in total
In Seattle ADUs can be 1,000 sq. Ft. In size in residential zones. This is an increase from the 800 sq. ft. formerly allowed for DADUs. And the allowable size no longer includes garages and storage space. This is good for developers but also for others seeking to build a family home. Sally and Libin were looking to build a DADU for themselves and their two elementary school age children. It wasn’t practical to remodel their existing home so they decided to build a DADU in the location of their former garage. Downstairs the DADU contains a kitchen and living room, bathroom and mudroom and a large garage/flex space that may in the future be converted to living space for Sally’s aging parents. Upstairs the DADU consists of a bedroom for each of their boys and a primary bedroom and bath. This ADU is a great example of “missing middle” housing, or smaller sized family housing located in neighborhoods close to amenities. Duplexes and Triplexes are also frequently included in discussion of missing middle housing. Recent code changes in Seattle are meant to encourage development of these types of homes where they were not previously allowed by land use codes. We have seen a great demand for these larger ADUs in 2023 and we expect this trend will continue in 2024.
ADUs THE YEAR AHEAD. The cost of building a DADU in seattle in 2024
The cost to build an ADU will likely decrease next year based on a number of predicting factors. Data from the Mortensen Construction Cost Index shows that in Seattle material costs are flat and number of people employed in construction as roughly the same as in 2019 and 5% lower than in 2022. Meanwhile, the number of residential building projects completed in Seattle has increased 22% in the last year. Conversely, the number of new residential building permit applications, an indicator of future demand for construction, has dropped 38% in the last year. That indicates a rapid decline in future residential construction activity in the coming year. This is happening at the same time as commercial construction is also slowing amid rising vacancy rates and higher borrowing costs. These trends bode well for lower material, labor and sub contractor costs in the near future. Financing in also likely to get easier in 2024 as interest rates have come down from their peak in 2023 and the Federal Reserve has indicated that they anticipate rate cuts in 2024.
While the number of newly completed multi-family and apartment projects will decrease in 2024, the demand for new homes for rent and to buy will likely remain strong in Seattle. The combination of lower construction costs and high demand should provide a strong market for AADUs and DADUs for sale or rent. Many seeking to downsize or to accommodate a family member, will find that adding an ADU will still be a good alternative to purchasing a new house in a market with such limited inventory.
*City of Seattle residential permit tracker,