Houses in Laurelhurst, 1955

In September 2014, when the median single family home price in Seattle was $431,000, the city council passed a resolution aimed at increasing Accessory Dwelling Units (ADUs).  In 2016, when the home price was $513,000, neighborhood activists sued to stop the policy, forcing the city to conduct an environmental impact statement (EIS).  Now, in 2018, as the single family home price cruises past $800,000, the Draft EIS has been released.

Erica has the a great explanation of how the EIS functions as an indictment of exclusionary zoning.  It states pretty plainly that detached single family houses are only affordable to the wealthy, and allowing more diverse housing types in single-family zones would (a) not materially impact parking, (b) spur the production of thousands of affordable units, (c) result in fewer tear-downs of existing houses, and (d) make single family zones more diverse and inclusive.

Population decreases in single-family areas since 1970

The authors looked at two alternatives for ADUs (including the requisite “do nothing” alternative).  Both would allow one attached ADU (e.g. a basement apartment) and one detached ADU (a backyard cottage). Alternative 2 would remove the owner-occupancy and parking requirements. Alternative 3 would leave those requirements in place.  Surprisingly, the difference in housing production between the two is insignificant, just a couple hundred units (3,300 for Alt 2 and 3,100 for Alt 3). I would have assumed a greater difference given the greater access to external capital in Alt 2.

The shocking part (for those who don’t follow this stuff religiously) is that the 2/3 of the city that has been preserved as single family has actually lost population over the last 30 years, as all the growth has concentrated in the urban villages.  Family sizes are shrinking, and boomers are aging in place, leading to even fewer people living in areas that include the best schools and parks in the city.

This is is a significant finding, because it contradicts homeowners activists who make wild claims like saying the sewer system can’t handle the excrement from imagined hordes of renters descending on their single-family neighborhoods. In fact these neighborhoods can handle more people and have handled more people quite recently.

ADUs shouldn’t be the end of the conversation. We should be thinking bigger and bolder (see Minneapolis). But it’s a start.

Laurelhurst, 1955 via Seattle Municipal Archives on Flickr

31 Replies to “Backyard Cottages Would Help Affordability”

  1. Both sides of the upzoning debate seem to obsess over units more than people. I get frustrated that we encourage micro-apartments but not three-bedroom apartments for roommates to share, for example. By supporting this unit-counting, we encourage a cubby-hold, isolationist mentality while increasing the per “bedroom” costs because more bathrooms and kitchens end up getting required to make a room an official “unit”.

    The article makes an excellent point that household sizes in single-family dwellings are shrinking. The implications of that are profound:

    1. As people live to older ages, the percent of single-family homes with school-age children is dropping. When people have kids, they usually are choosing to have only one or two. The need to “preserve” many large single-family homes for families with children is simply not logical given our societal demographics.

    2. With double-income households trying to raise kids and/or trying to support elderly parents with needs, caretaking is a major concern of time and money. This is particularly true in cultures where extended families are the preferred babysitters or caretakers — which is very common in foreign-born households as well as a popular option among many in the US. ADUs allow for the flexibility to have a relative live there — whether it is a surviving parent who has care requirements, a young adult who needs independent living space, or even a cousin who comes to Seattle for a new job.

    Historically, the 20th-Century obsession with single family lots is actually very recent in the course of human history. Whether it is the “servant’s quarters” basements of New York or Boston brownstones, “carriage houses” in New Orleans or Charleston for relatives or workers or (at one time) slaves, even many cities in the US did not create widespread zoning ordinances to restrict large areas to just single-family lots until the 1940’s.

    Finally, it’s safer to have legal ADUs than have illegal ADUs. People can go to a superstore today and buy a microwave, hot plate, mini-oven, refrigerator, dishwasher and sink and install them as a DIY project in a matter of days. They can buy replacement lock hardware and put locks on rooms. They can post to web sites — even BNB sites — to rent the unofficial apartment as a “room”. At least with ADUs being legal, there is better control over fire safety and other concerns by having an inspector review the work — not only building inspectors, but also electrical and plumbing inspectors.. Part of the repeal of prohibition and the legalization of recreational marijuana is said to be to enable some oversight as well as tax revenue from the already-occurring behavior, and allowing ADUs falls into this arguement, too!

    In sum, it’s time to manage them, and not to ban them.
    .

    1. We focus on microapartments because they’re illegal to build. There’s an entire “missing middle” of architecture between townhouses and large breadboxes. This gap is where the less-expensive 4-8 unit apartments and dingbats came from. The wave of apodments happened because of a loophole in the law that considered them single-family houses, but the city council closed the loophole and banned apartments under something like 250 sq ft and their own kitchen. Small apartment buildings are legal but there are so many lot restrictions (parking requirements and setbacks) that there’s not enough room to make them feasable, and where breadboxes are allowed the large developers outbid the small developers. Meanwhile, 2+ and 3+ bedroom units are few because of the profit margin: you can fit five studios in the space of two 3BR apartments, and you get more income from five households than from two. Nevertheless, developers are starting to build more large apartments because they see the danger to the community and their future business if everything is one size. However, that’s not enough large apartments because it’s proportional to the general housing shortage. So the only solution is subsidized housing, because the market isn’t going to build enough large apartments unless zoning were eliminated now, and maybe not even then given the profit difference between 3BR units and 1BR units.

  2. Look, I’m a supporter of more density, but Erica’s article was just plain silly and uninformed.

    Houses cost money! News at 11? I mean, really? Saying owning a house requires one to have more money than renting an apartment is kind of inherent, no? And if I build a whole bunch of condos in a neighborhood I get more density — yay! — but not much improvement to “inclusion” or income diversity.

    And OF COURSE growth has increased in the Urban Villages. That was the ENTIRE POINT of creating the Urban Villages. And it has repeatedly been reaffirmed by Seattleites.

    So if we want to discuss whether or not that decision is a good one, that’s fine… but there’s no “indictment” of anything that the majority of the growth has been focused there. The stated plan by the City has been to create tight, urban neighborhoods and to concentrate infrastructure and transit investment there.

    1. “Look, I’m a supporter of more density, but…” just not anywhere near you, apparently!

      The *indictment* is of blatantly false statements peddled by anti-density activists, such as claiming that SFHs are “affordable housing stock” (lmao, no!) or that upzoning SF zones would displace poor people renting SFHs (vast majority SFH are occupied by well-off folks) or that the sewers/parking/tree canopy wouldn’t be able to handle it.

      And of course building a bunch of condos or townhomes or DADUs in a neighborhood gets you income diversity – it allows people who can’t afford $800k+ detached homes to live there!

    2. It wouldn’t matter except an increasing number of people can’t afford either a house or an apartment, or they have to spend too much of their income on rent. When I was growing up people believed that if you can’t afford a house you’d get an apartment, and that was fine. Now people are being told that their choice is homelessness or moving to a far suburb without transit or moving out of the region. It’s like going back to the 19th century where the non-rich worked 12 hour days six days a week and lived in slums, except now there aren’t even slums to live in.

  3. Wow — I think you failed the reading comprehension test if that’s what you got out of the article. Let me break down your points:

    >> Houses cost money! News at 11? I mean, really? Saying owning a house requires one to have more money than renting an apartment is kind of inherent, no?

    That’s not the point — the point is that by limiting the production of apartments, both apartments and houses are more expensive. Our restrictive ADU policies make housing more expensive for everyone . Yeah, duh, right (news at 11). But you would be surprised at the number of people who just don’t get that.

    >> And if I build a whole bunch of condos in a neighborhood I get more density — yay! — but not much improvement to “inclusion” or income diversity.

    Of course there is an improvement in income diversity. You just added an apartment to a neighborhood that would otherwise be filled with expensive houses. You yourself wrote that apartments are usually cheaper than houses — doesn’t it stand to reason that someone could afford to live in a small basement apartment even though they can’t afford to live in the house upstairs?

    >> And OF COURSE growth has increased in the Urban Villages.

    Again, that’s not what the article said. It say that outside of Urban Villages, the population has GONE DOWN. That is huge news, and not at all obvious. It isn’t what has happened in other cities. In Vancouver BC, for example, when the city was growing rapidly, every neighborhood saw a lot more people. That is because every neighborhood was adding apartment. They added tens of thousands and thousands of ADUs. That is tens of thousands of places for people to live, in neighborhoods that kept all their houses. We haven’t come close, despite having way more houses: http://www.sightline.org/2016/02/17/why-vancouver-trounces-the-rest-of-cascadia-in-building-adus/. But we have added so few ADUs that it isn’t enough to make up for the loss of population in the houses themselves.

    1. Apparently I failed the “reply” test (the previous comment was supposed to be a reply to Mickymse).

    2. “You just added an apartment to a neighborhood that would otherwise be filled with expensive houses.”

      There’s another aspect to this too. When I got my first apartment in the northern U District in 1989, the surrounding 2BR apartments were $450 and houses were in the $100Ks. I stupidly did not buy a duplex in the CD the following year for $90K (both sides), two lots away from one I’d lived in for a short time. But I was just out of college and that seemed like too big a step then. Since then as the price of houses has gone up, the portion of society that is homeowners has shrunk to the ever-richer and those who bought a house decades ago. People talk about preserving the character of single-family neighborhoods, but the architectural character is not the only thing: there’s also the human character. I knew people who had grown up in Seattle at that time, and they were average middle-class and working class. A few years ago I was walking in Mt Baker and passed one of my friend’s family’s houses. Somebody else had bought it, and the people on the block were a lot better off than they had been. So when we freeze the density, the cohort of people who live there become an ever-smaller part of society.

      That’s both because they have enough money to buy the house, and because they can sell it and live anywhere they want or pass it down to their kids. The US and the west used to have a small aristocracy and an impenetrable gap between them and the 90%, reinforced by inherited wealth. That was obliterated in the triple whammy of two World Wars and the Depression and the following age of egalitarianism. But it’s coming back, and in a generation or two the second-generation aristocracy will be entrenched again and they’ll be the ones in the single-family houses because only they can afford them.

      But wait, there’s more. It’s illegal to build ADUs or duplexes or townhouses or small apartment buildings in single-family areas, but it is legal to build McMansions. So some bungalows are being torn down to build even more-exclusive mansions. That’s not what the zoning was supposed to protect.

      1. Yes, yes, 100 times yes. You nailed it Mike.

        Since then as the price of houses has gone up, the portion of society that is homeowners has shrunk to the ever-richer and those who bought a house decades ago.

        People talk about preserving the character of single-family neighborhoods, but the architectural character is not the only thing: there’s also the human character.

        It’s illegal to build ADUs or duplexes or townhouses or small apartment buildings in single-family areas, but it is legal to build McMansions.

        Your comment — in its entirety — should be must reading for every representative in this town.

  4. It is reasonable to pursue a compromise between preservation and more affordable housing. In an ideal world, the “urban village” concept would do exactly that. If Seattle was growing slowly, then you would see a handful of old lots or run down houses turned into apartments, while most of the city remained the same. Some of the larger, well kept houses would be converted to apartments (as they have in the past).

    But Seattle is growing too fast for that. Demand is so high that it has pushed prices really high, despite increased supply. So high that you might as well tear down a nice old house and put up an apartment that isn’t much bigger, if you can squeeze out a few more units. The houses in neighborhoods that haven’t changed their zoning are also losing their history. Small old houses are being torn down, and being replaced by huge houses — even in relatively cheap neighborhoods (those without sidewalks, views, nightlife or great transit). In that sense, everyone has lost. Apartment prices are high, owning a house is very expensive, and yet we are still losing some of the more charming old houses.

    That is what happens when public policy doesn’t meet the current economic conditions. At a minimum, we should embrace the liberalization of ADU rules. As the report clearly stated, it would lead to *more* preservation. If that really is your goal, then you should support it.

    Striking a balance is really not that difficult. Pass rules preserving old houses, but allow a lot more people to live there. Allow someone to convert it to an apartment. Allow additions to be built next to it. I see no reason why the same rules that apply to the house itself can’t apply to an apartment conversion.

    I would also allow row houses everywhere. This would mean that some houses would be torn down, but very few that would have lasted anyway. If a small house sits on a big lot, it is not long for this world. It will be torn down, and be replaced by a bigger house, or several big houses. The latter is common in my neighborhood, and replacing a place like this (https://goo.gl/maps/4ZZeCNXQuNy) with row houses is more in keeping with the neighborhood character than replacing it with something like this (https://www.redfin.com/WA/Seattle/11336-20th-Ave-NE-98125/home/109972241). But if the zoning rules don’t change, then the latter will be built. The land is worth way more than the house, and so you will see three houses on that old lot (after they subdivide it) instead of twice as many small houses, or three times as many row houses.

    Current policy is simply failing on all fronts. We aren’t preserving the old houses while the cost to rent or own a home is sky high. Changing the ADU rules is very small step in the right direction that should have been done a long time ago.

    1. “That is what happens when public policy doesn’t meet the current economic conditions.”

      That’s it! Or as I think of it, Seattle’s historical housing norms are inappropriate for our population size. Imagine if New York or Chicago a century ago said, “No apartments on 70% of the land, and only 2-6 stories in the remaining urban villages.” It would have sprawled out of hell or driven out all the middle and working class, or even choked off some of the cities’ economic growth and cultural contributions.

      Cities must grow with their population. They must shrink with their population too. Satellite cities like Surrey BC are a possibility it the main city doesn’t want to scale to millions. But they have to be satellite cities, not satellite low-density areas with even smaller urban villages and stricter zoning.If a city refuses to grow in spite of population growth, it just ends up excluding more and more of the population, which contradicts the purpose of a city.

  5. What needs to happen to get owners of undeveloped and under developed lots to develop?

    Too many owners are content to keep lots as surface parking or low rise development where mid to high rise development is allowed.

    1. You legalize housing everywhere so that the land owners who do want to build housing, can.

    2. Good question. First of all, some owners won’t build, even if there is good money in it. Business inertia is a real thing. That is why depending on only a handful of property owners to build is the wrong policy — as Donde said, we should enable a lot more people to build.

      But Richard is also right — taxing policy could make it more appealing to build. One thing that is done in some areas is to tax the land, but not the buildings on it (land-value taxation). Right now, there is a disincentive to build, because your property taxes go up. go up if you do This would do away with that. You could also split the difference (raise the tax on land, lower it on the structure).

      Of course, lots of people would object. Those in small houses (in big lots) would pay even more in taxes, while those living in very expensive houses would see their rates go down. You could decide to apply the higher land-value tax in areas that allow more growth, but you would still get into tricky issues. Someone who owns a house would see their neighborhood up-zoned, and their property taxed go up, which would make it even harder to upzone areas.

    3. Some properties downtown languished as parking lots until the market reached the price level the developers wanted. Most of those have finally been developed the past six years or they’re caught in financing snags. In Rainier Valley and other places, depending on the specific location, it’s either the market, restrictive zoning, or unrealistic zoning. By unrealistic zoning I mean there’s capacity to add a story or two but that’s not enough to justify tearing down the existing building. So the owners are either waiting for it to be upzoned further, or they aren’t thinking about that but if it is rezoned then they will be suddenly inspired to build. There was a perfect example of that on Broadway, where the old QFC and Safeway lots remained for years because it was zoned four stories, then it was zoned six stories and suddenly new buildings went up. This happens on neighborhood lots when the zoning allows four stories and the existing building is a two-story apartment or a house.

    4. The reason the properties languish with parking lots is their taxes are low, because properties are taxed based on their current use rather than potential maximum use. So the owner treats the tax like a minor expense akin to a bank account fee, vs the millions of sugarplum dollars dancing in his head if he waits to develop when the price is high. It’s the same reason storefronts on University Way remain empty for months or years, because the owner would rather wait until a high-end tenant comes than settle for an ordinary tenant who would be in the way if a high-end one comes knocking.

  6. We retired civil servants, students, and modestly-paid workers offered to buy our post World War II apartment complex in Ballard from the speculator who’d bought it from our long-time landlord.

    His very words: “Not in the business plan.” No elevators. No garbage disposals. Coin washing machines in the basement. No complaints about that from our side. “Head Tax” on employers? How about a tax he could’ve avoided by adding our offer to the business plan?

    “Affordability?” If the private sector couldn’t afford us, all we would’ve needed was a city paycheck each. Using our own long-held skills to pay off the loan for our housing. As well as taxes of our own. Like Social Security for people who need it.

    Good chance that the employers in the news might see such arrangements as investments in a city where they have their headquarters. Refreshing change from the average tax. But most important result might be as an example of addressing a problem some action of peoples’ own.

    Because worst thing I’m seeing right now is massive sense of defeat. Starting with City government. “Depression is learned helplessness.” Forget who said that. But “A Depression” is even more true.

    Mark Dublin

  7. Upzoned neighborhoods definitely increase housing stock, but It doesn’t mean a block becomes more inclusive or affordable. I live on a short L4 block between Miller Park and Madison Valley which used to be SFH, SFH, SFH, SFH, a 4 unit 1992 condo, and a row of 1990s perpendicular facing townhouses. Within the past 6 months, the last remaining SFH (a dilapidated and unoccupied POS) was razed and replaced with 4 very middling 3bd/2bath townhouses…starting price 1.1 million (and went pending in 2 days). The other conversions were in similar territory. So, while my block has gone from 9 residences to 17 it is now far less affordable or diverse.

    1. That’s because the housing supply was not allowed to grow with the population. More people are competing for the same unit, so the price rises. If we had allowed 40-story buildings in urban villages and townhouses throughout the city in 2000, they would have absorbed the demand and prices wouldn’t have gone up faster than inflation.

      1. Zoning isn’t the only limitation. We also have a shortage of construction workers and inflation in the cost of building materials which is greater than overall inflation. So while I believe our city’s policies have contributed to the steep rise in housing cost, no policy change would have made the rise be less than general inflation

      2. I said since 2000. Rents started going up 5% around 2005. If the crash hadn’t occurred they would have reached 10-15% a few years earlier. But if we had started building more housing right when it went above 3%, there would be a bigger cushion now. You’re right that all the construction workers are occupied according to builders, but that’s all the more reason to have started earlier when there were more available workers and material prices were lower. But the cost of workers and materials and taxes is a miniscule part of the rise of housing prices, which is mostly a rice in land prices and more people competing for a mostly fixed number of units.

    2. Madison-Miller is super desirable, so I’m not surprised that expensive units were built. I’ve also seen some micro apartments pop up in that neighborhood on 22nd as well. So there is some affordable housing going in, perhaps not on your block.

      But the thing that people often miss about “million dollar townhomes” is that they exist because there is a demand for 3BR in-city units that far exceeds supply. In an ideal world, 3BR townhomes would be built in single family zones and LR zones would all have apartment buildings, especially in close-in nabes like Madison-Miller (Singles!). But since the SFZ is banned from meeting the supply for 3BR units, then rich-ish people end up “outbidding” apartment dwellers to build townhomes on the few buildable LR lots.

    3. “Upzoned neighborhoods definitely increase housing stock, but It doesn’t mean a block becomes more inclusive or affordable. ” – right, the upzones help meet a Regional housing shortage, not a local housing shortage. That’s why when preservationists try to prevent growth from gentrifying a particular neighborhood, they are prioritizing a local need (keep my block affordable) over a regional need (keep my regional affordable).

      This is why lefty activists sometimes reject basic supply-side arguments about building lots of housing, because the local anecdotes don’t align with the regional data. Though a surge in housing development should alleviate a regional housing shortage, on a block-by-block basis, a surge in new development often spikes rents in the local neighborhood because of the influx of new, generally high-end housing.

      1. Another way to put it, new housing isn’t cheaper than the old. Instead, it makes the old housing cheaper.

  8. Posted this a couple of days ago, but essentially:

    Backyard cottages and ADUs (per my colleagues who have such units) are way more profitable as Airbnb units than actual rental units. The differential isn’t even close – even in the winter they can make the same amount of money as a tenant would bring in. In the summer they print money and are often booked solid for weeks.

    So, might not be much of a solution to the housing issues for residents.

    1. Plus, the risk is much lower to the landlord…a problem Airbnb renter is only a problem for a couple of days, while a tenant with a lease can be a problem that won’t go away. Especially with Seattle’s ‘first in line’ and seemingly hard-to-evict policies. Conceptually it seems more fair to give the benefit of the doubt to the renter, but in practical terms it seems like it would be stressful to the property owner, especially something in your literal backyard.

    2. The city will ultimately have to restrict Airbnb or build enough public housing to compensate for it. If all landlords switch to Airbnb, that won’t be a tenable situation.

Comments are closed.