HOW MUCH WILL IT COST TO BUILD A BACKYARD COTTAGE IN SEATTLE IN 2024?

CONSTRUCTION COST TRENDS

Construction costs remain relatively flat in the third quarter of 2023. An analysis from Mortensen Construction* found that construction costs increased 2.7% over the last year in Seattle and 2.3% nationally. This is a welcome departure from the double digit cost increases over the last number of years. The study shows a cumulative 193% increase in construction cost from 2009, which coincidentally, is the year that DADUs were first legalized throughout Seattle.

HOW MUCH DOES IT COST TO BUILD A DADU?

Not surprisingly the average cost to build a DADU has increased in pace with these larger trends. In addition to increases in material and labor costs the size and complexity of DADUs have increased as well. ADU code changes meant to encourage the construction of more ADUs, have increased the allowable size of ADUs. Many of the DADUs built today are larger than they were in 2009. The DADU pictured above contains 1,440 sq. ft. where a DADU with a similar program built prior to recent code changes could have only been 800 sq. ft. in size. The increasing sale of DADUs as condos has led to more speculative builders entering the market. ADUs built for sale are further pushing the size and amenities offered in DADUs which now compete with modest size single family homes in our tight real estate market.

WHAT WILL IT COST TO BUILD A DADU 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.

WHAT WILL IT COST TO BUILD YOUR DADU?

The first questions we usually answer for people planning to build a DADU are about feasibility, cost, and design which are all interrelated. A preliminary site assessment, which can be done via phone or email, is the first part.  At that time, we can answer questions and we can discuss budget ranges for recently completed DADUs.

 

*Mortensen Construction compiles data on a wide range of projects throughout the country in their annual Construction Cost Index.

 

DADU open house, Friday April 7th 3-5 pm

This detached ADU in Seattle's Green Lake neighborhood is for sale

Join us for a unique opportunity to learn about and meet others thinking about building a DADU. This just completed DADU in Seattle’s Green Lake Neighborhood is 1,170 sq ft and features 2 bedrooms and 1.5 baths. The ground floor features an open plan with a bank of windows and glass doors facing south and opening on a private yard framed by new fencing and a new detached garage. The location on the alley gives the ADU great street presence. The existing home was preserved and renovated. Please contact us to RSVP.

ADU open house Thursday February 16th

 ADUs built in 2022 were able to incorporate code changes intended to promote more missing middle housing in Seattle.

Join us for a builder's open house to see what is what is possible for these larger ADUs. This DADU features 3 bedrooms, 2 baths and a garage. The interior features a unique split level design and vaulted ceilings. Construction is still wrapping up so you can expect rough conditions but it will be possible to get a good sense of the spaces. Ultimately this DADU will be sold as a condo.

RSVP via our contact form

statewide ADU reform today HB 1337

ADU's like this garage conversion in Seattle's Ballard neighborhood, give homeowner's more options

Today Monday January 23rd you can support statewide ADU legislation. Washington state lawmakers will debate legislation to establish statewide guidelines for ADUs. You can participate via zoom, or submit written testimony and get more information at HB 1337.

Who doesn’t love a cabin?

 

And what is a DADU but an urban cabin? Happy new years to all dreaming of a cabin urban or otherwise.

just like that, seattle eliminates single family zoning

 

A DADU nearing completion in Seattle's Ravenna Neighborhood

With the stroke of a pen Seattle has eliminated all single family zoning. While now that Seattle allows an ADU, DADU and SFR on the same lot it might in single family zones seem that this has already happened. However, unlike the zoning changes that went into effect in 2019, this new change is mostly symbolic.  Land use zones that had been designated as single family will now be called neighborhood residential. The change is a broad reflection of the City of Seattle's interest in increasing the types and diversity of housing types within their residential neighborhoods.

Seattle’s Land Use Code and the official zoning maps divide the city geographically into zoning districts (e.g., single-family residential, multifamily residential, commercial, industrial, etc.). Ordinance 126509 which went into effect on June 13th, applies the new zone name by dividing the neighborhood residential areas into four zones, based on pre-existing minimum required lot sizes:

Existing Zone (Abbreviation)	New Zone (Abbreviation)
Single-family Residential 9600 (SF 9600)	Neighborhood Residential 1 (NR1)
Single-family Residential 7200 (SF 7200)	Neighborhood Residential 2 (NR2)
Single-family Residential 5000 (SF 5000)	Neighborhood Residential 3 (NR3)
Residential Small Lot (RSL)	Neighborhood Residential Small Lot (RSL)

biggest DADU trends in 2022 - DADU's sold as condos

Most existing lots with a DADU are too small to be sub-divided under Seattle's land-use code.  However, while the city of Seattle may restrict ownership of that lot to one entity if that entity is a condo association, the DADU and the primary residence can be owned separately and sold separately.  It is in the words of one developer a "game changer" in residential development allowing up to three separate units on a single family zoned lot.   

Attorney Terrance Wilson and UW Real Estate instructor Jeff McCann discuss the topic of Accessory Dwelling Units (ADUs & DADUs) in the latest episode of Real Leaders in Real Estate.  With his wealth of knowledge of the City's code, Terrance describes how the condo process can be overlayed, and an owner (or investor) can tap into this opportunity to sell off parts of their property to increase equity or profits. 

 

https://youtu.be/5TXLk13thW4 .