Small is the new green

Increasing environmental awareness along with economic and demographic trends favor smaller house sizes. Many cities are doing their part by updating zoning codes to allow cottage housing and small backyard cottages (detached ADU's) on residentially zoned lots. Seattle and Portland are two cities which allow backyard cottages up to 800 sq. ft. in size. These small houses provide opportunities for families, while increasing housing stock density and diversity. Continue reading for more information about small house design and Seattle's backyard cottage ordinance or contact us to find out if your lot is eligible for a backyard cottage.

Monday, September 25

backyard cottages top $100,000 views and walkability as most desirable amenity

Everyone knows that a home’s price is affected by such things as its size and condition and the quality of nearby schools. There’s also the $50,000 cup of coffee, the $100,000 view and the $200,000 backyard cottage.




broadview cottage - rental and personal use


Like in Seattle, backyard cottages are being built in Berkley in increasing numbers. In a recent berkleyside article bay area real estate agents discussed the relative merits of various home amenities. Pricewise, an in-law unit or a tiny home can boost a home’s value more than any other element, agents said. “People love it when the house has a little separate cottage or in-law unit so they can accommodate friends and family who are visiting from out of state,” said Victoria Lynn Curtis, an agent with Better Homes and Gardens, workers who telecommute can use such quarters as offices, and artists can use them as studios; double-income professionals can use them to house nannies or au-pairs. Or homeowners can rent them out, generating a tidy income".


However real estate appraisers struggle with how to value backyard cottages and other ADU's primarily because there are simply not enough comparable sales to serve as a guide. Bruce Parker from microhouse and Stefan Hansmire from Ncompas were recently invited to participate in a panel discussion about backyard cottages during the Appraisers Coalition of Washington State conference. One topic of discussion was the use of backyard cottages as rentals.  This trend has only increased in recent years as more people have become aware of and begun to use their cottages as short term rentals.  Short term rentals provide a relatively high rate of return and cottage owners would like the rental income to be considered in the appraised value of their homes when seeking financing. However, most municipalities have owner occupancy requirements.  In these cases, a lender or underwriter must asses the value of the home without income from an ADU because in the case of foreclosure the ADU must be removed before the house could be rented by the loan holder. That takes us back to the use of comparable sales to establish an appraised value.  The contribution of an ADU to these valuations tend to be less than the cost of construction. This in turn makes construction loans harder to obtain for DADU construction.  As a result, most home owners use cash or home equity to finance construction.
Value vs Cost

The cost of construction varies depending on a number of market factors including the cost of materials and labor. The cost of building a backyard cottage has been increasing since the recession.  Assessing the value of a cottage for those planning to build one, involves consideration of the many possible uses of a cottage over the long term.  As discussed, many people use cottages as rentals.  In this case,  a careful consideration of the rents in your area and anticipated costs and expected rate of return can help you establish a working budget.  





 magnolia cottage - short term rental/long term family occupied


Even when cottages are used as rentals that is often only one of many planned uses.  Ben and January's cottage in Magnolia is one example. They originally rented their cottage on AirBNB.  Now that the cottage has been paid off, January's recently retired father has moved in and is enjoying being closer to his grandchildren and urban amenities. 

While it may be hard to put a value to how a well designed home makes you feel or the value of having a family member living nearby, some qualities are easier to asses.  If that family member is an aging parent who would otherwise be living in an assisted living facility it is relatively easy to look at the costs of local facilities.  For others building a new cottage may be less expensive than remodeling their existing house to more closely meet their needs. For example, new cottages can incorporate universal design components to assist those with mobility impairments. Having established a realistic budget based on your needs and values will guide the many decisions that make up design process.



Monday, July 24

HALA comment period on extended until August 7th

Have you heard of HALA? MHA? What about DEIS? If these acronyms are not familiar to you, they should be! All will affect your life and your city's future.

What can you do? We're asking our community to review the Draft Environmental Impact Statement (DEIS) for Mandatory Housing Affordability (MHA) policy and submit your comments to the Office of Planning and Community Development (OPCD) by MHA public comment .The DEIS evaluates MHA implementation in urban villages, proposed urban village expansion areas, and all other multifamily and commercial areas throughout the city.


After a review of the environmental impact statement for mandatory housing affordability (MHA), we support Alternative 1 - No Action.   MHA has too great a reliance on new development and increased density to lower costs of living.  Based on census data, there is a strong correlation between increased density and size of a city to increased cost of living both as a total cost and as percentage of household income.  Alternative 2 and 3 rely on both up-zoning and MHA to increase allowable density beyond that allocated for under current comprehensive plan and will disproportionately impact those earning less than AMI.  Up-zoning increases land values and ownership costs for existing naturally occurring affordable housing.  For investment properties, this ultimately results in increased rent or when the property can no longer remain profitable, redevelopment and displacement for the tenants.  This is true for residential tenants but also for small business located in older buildings which are more likely to be locally owned and to hire lower income workers.  

New rental housing produced at market prices, results in market rate rentals with pro formas that require a higher rate of rental income to offset financing, taxes and other expenses. Fully depreciated older properties can operate much less expensively.  Using MHA to offset the higher cost of new construction may reduce costs for those that ultimately receive subsidized housing. However, the funds from MHA will increasing the cost of development and thereby increase the costs for the tenants who are not subsidized by an equal amount. The city data suggests that the economic group earning between 30% and 80% of AMI have been and will be most affected by the increase in housing costs.  This group, who consists of workers with modest incomes, have increasingly been forced out of Seattle.

The city, and one would hope with the consent of the people who own the land, dictate land-use and can increase the value of the land by easing restrictions placed on it.  Up-zoning properties as proposed under Alternatives 2 and 3 gives away this value and is a mistake.  Incentive zoning is better and can be expanded. It creates funding for affordable housing without necessarily increasing the underlying value of the land.  Thus, preserving naturally occurring affordable housing and commercial properties.

Our neighborhood single family zones contribute the character and vitality of our city and should be supported. In single family zones, particularly in those areas with proximity to access to good schools and amenities, residences are being demolished and replaced with larger homes, often times by speculative developers.  These new houses sell for approximately three times the value of the existing older home.  This trend is driven by lending practices and the market and ultimately makes it harder for those even earning AMI to own a home.  Under Alternative 2 and 3 the city proposes increased in development in single family zones. This will accelerate this trend unless measures are taken to insure development occurs at a smaller scale and in a way that protects more modest homes from redevelopment.  Backyard cottages and ADU’s are part of this solution. 

Cottage housing is another tested method that remains largely unrealized. A Seattle demonstration project for cottage housing in single family zones was ultimately discontinued.  However, the housing built under the project shows that it can provide attractive affordable housing in a scale with single family neighborhoods.  As a building type, it provides shared open space which is a real amenity for those with young children and also seniors. These two groups are under increasing economic pressure to leave the city. Currently, cottage housing is allowed in multi-family zones but because it is competing with other forms of multi-family housing with higher allowable floor area ratios (FAR)s cottage housing is seldom if ever built. The land-use code should be modified to limit the size of houses built by adding FAR limits in single family zones but also to allow for the division of lots given the increased limitations on size.  Smaller lots and smaller houses will result in more family friendly affordable housing in areas with amenities for families while preserving and enhancing the character of neighborhoods.



Friday, July 14

city of seattle - no more building permits


How crazy is the Seattle construction market? One indicator is the date on which the Seattle Department of Construction and Inspections (SDCI) will accept new building permit submittals, the intake date. SDCI uses the intake dates to regulate their work flow. The busier they are the further out the earliest available intake date. This year intake dates have been available about three months out. Which is a considerable amount of time. However, we typically use this time to gather preliminaries, work on design and prepare construction documents so it doesn't slow us down much.  As of yesterday the November intake dates were all taken and SDCI has stopped issuing intake dates altogether. This is for any construction project not just backyard cottages. It is safe to assume that new intake dates will be added for the year.  It does highlight the unprecedented level of construction activity and increasing complexity of the land use, drainage, and energy codes that are affecting all aspects of the industry.

Thursday, July 13

crown hill backyard cottage

The maple tree was and is an integral part of this backyard cottage from it's inception.  The tree wraps the cottage providing a leafy screen from the street during the summer and in the winter rain drops collect on it's branches. The cottage ground floor is art studio that opens up to yard shaded by the tree. The 2nd floor apartment opens up into the leafy canopy.


The ground floor art studio features concrete floors, a small 3/4 bath, and a utility sink. Garage doors open up to the street allow a car to park on the ground floor if ever desired. 




The second floor apartment features an almost 1 bedroom with space for a queen sized bed placed over the stair.  Vaulted ceilings, skylights and abundant windows fill the cottage with natural light.


A juliet balcony off of the living room opens up into the tree canopy.



The bathroom also features bright colors and  a vaulted ceiling.


The cottage has been the home of the owner's son who is off to law school. While he is away it will be used as an executive rental.



Thursday, March 30

backyard cottage open house - fremont

Join us for a unique opportunity to tour a backyard cottage in Fremont. Tuesday April 18th from 5:00 - 7:00 pm.  4134 1st Ave NW.




This cottage has the distinction of being built over, not a garage, but a room for table tennis. The logic being that once that was built why not build a cottage on top. Fast forward to today and the owner's are living in their new house and renting out their larger primary residence.

The cottage features treetop views of downtown, vaulted ceilings, two green roofs and a small deck.  The owner acted as the general contractor for the project and did most of the construction work himself, including the hand stenciled paper mache floors.



the living room floor being installed. Material cost less than $50.



The finished product complete with a hand stenciled border.

Please note that the cottage is not readily visible from the street. Outside of open house hours please be respectful of the privacy of the owner's, their tenants and neighbors.

Tuesday, February 14

backyard cottage open house Saturday

Come see what all the fuss is about and join us for a unique opportunity to tour a backyard cottage in Ballard.  Saturday February 18th from 1:30 - 2:30 pm.  819 NW 90th St.



This newly built cottage is 800 sq. ft. and includes a ground floor art studio and 2nd floor 1 bedroom, 1 bathroom, carriage apartment. 


Saturday, January 7

Ballard Backyard Cottage Completes an Intergenerational Family Home

Last year Ballard residents Drew and Jacob decided to tear down their "scary little garage" and build a backyard cottage. Fast forward to this week and they are now living in an intergenerational family compound, sharing their property with Drew’s parents. Let's see what they built.


The cottage nearing completion in December


The cottage is small even by backyard cottage standards. In Seattle, backyard cottages are limited in size by their overall gross square footage and their footprint is limited as a percentage of lot size. In this case, the parent lot is relatively small limiting the allowable footprint to a mere 14 ft x 24 ft.   To maintain the minimum required side yard setback the top floor of the cottage is even smaller.



On a winters day the cottage is filled with natural light


Even given the limited footprint we were able to create a comfortable living room, kitchen, powder and laundry room on the ground floor.  The height of backyard cottages is also limited.  To increase the apparent size of the cottage we left the ceilings joists exposed. This also adds a sense of rustic warmth which is further enhanced by the owner's furnishings and choice of fixtures.



The kitchen: compact but designed for use

The kitchen is compact but designed for people who like to cook.  The refrigerator and stove are both compact 24 in x 24 in. The table fits into a nook with a bench but is also expandable so that the whole family can eat together.  A pantry is located under the stair and to the left of the table is the entry to a powder room that also contains a washer and dryer. 



The bedroom: cozy with big windows and vaulted ceilings


The bedroom is located on the second floor and features vaulted ceilings and lots of natural light.  A bathroom is located off of the bedroom at the top of the stairs.



The tongue and groove fir floor is also the ceiling below. 



Two south facing windows overlook the stair and fill both the bedroom and living room with natural light.  There is a view between the other houses on the block all the way to Salmon Bay.






The bathroom features a nice walk in shower, vaulted ceilings and a skylight. There is a walk in closet located off of the bathroom.

Click here to read an interview with Drew and her families experience building a backyard cottage.