As Seattle adopts new developer-friendly rules, don’t expect an immediate building boom

Seattle, bid adieu to single-family zoning as you have known it.

As a result of a state law designed to add smaller and more affordable dwellings to the great majority of land earmarked for expensive single-family homes, developers will be able to build up to four homes starting Monday on city lots that are currently dominated by individual residences.

However, don’t anticipate a flurry of construction despite the change’s “yes in my backyard” motivations.

Similar to Portland, the Seattle real estate market is still slow as builders deal with high borrowing prices and costly building supplies. The pace of sales has slowed as a result of many homebuyers staying out of the market or abandoning it entirely due to persistently high loan rates. Rents have been comparatively stable over the past year due to the surge of new flats.

As a result, while some projects are on hold, applications to construct new houses have drastically decreased.

Developers evaluating the market today think that zoning changes coming to Seattle’s residential districts won’t be enough to overcome those obstacles.

“You won’t see the floodgates open,” Erich Armbruster, a homebuilder from the Seattle region, said. Right now, the market is simply too bad.

More housing allowed

In Seattle, single-family zoning is already somewhat misleading.

Three-quarters of the city’s residential land was, in fact, limited to one detached house per lot for decades, thereby isolating those neighborhoods from lower-income tenants and homebuyers. Similar to other American cities, Seattle residents opposed efforts to permit additional housing types in their communities.

However, Seattle started permitting a little bit more density in 2019.

Developers could construct two auxiliary units—one detached and one adjacent to the bigger house—and sell each unit individually on lots that were previously only suitable for one detached house. That kind of development, sometimes referred to as “three-packs,” has become increasingly popular and is starting to fill in some communities.

In Seattle’s neighborhood residential zones, the most recent rule modification will allow for an even wider variety of residences.

First, there will often be four houses permitted on each lot instead of the previous three. No larger house on the lot will be required by the laws, and none of the houses will need to be connected to each other. Up to six residences may be built on properties near important transportation hubs, as well as on sites where a developer adds two reasonably priced units.

These modifications allow for different kinds of development in addition to the now-common houses and ADUs. Duplexes, town homes, or groups of four or six smaller detached homes up to three stories tall can be added by builders.

The modifications are a result of House Bill 1110, a new state law that mandates that communities in Washington provide single-family areas greater latitude. According to state estimates, Washington would require over a million additional homes over the next 20 years, prompting lawmakers to target zoning change in 2023.

While the City Council continues to discuss permanent zoning adjustments and a more comprehensive 20-year growth plan, Seattle’s new zoning code is an interim measure to comply with HB 1110.

Initiatives such as HB 1110 and Seattle’s current three-pack regulations give preference to what proponents refer to as medium housing, or mild density, methods of increasing the number of dwellings without permitting apartment complexes in places where single-family houses predominate. Although they are unlikely to be able to cover the scope of the larger housing need, they can make more housing possible, particularly for-sale residences.

Less than one in five Seattle residential lots can accommodate middle-housing alternatives, such as those permitted by the new zoning, according to a city-commissioned research earlier this year. According to the analysis, redeveloping every viable residential property may result in 69,000 additional homes over the next 20 years—much more than is permitted by current regulations. However, considering current building trends, only roughly 36,000 new homes are expected to be built. By 2044, it is anticipated that Seattle would require 112,000 additional dwellings, more than half of which will be for low-income individuals.

Portland s middle housing buildup

With the approval of House Bill 2001 in 2019, Oregon was a pioneer in the middle housing movement, despite the present widespread high financing and construction costs.

Additionally, according to later research, Portland in particular saw a boom in new unit development prior to the construction downturn.

In Portland’s low-density neighborhoods, developers constructed almost 1,400 of these homes between 2021 and 2024, according to a Bureau of Planning and Sustainability report.

The city’s Residential Infill Project, which began in 2021 and grew the following year, was responsible for that. According to the planning office, the scheme made intermediate housing the most common form being built in areas of the city that were previously zoned for single-family dwellings.

According to the survey, single detached homes, which formerly accounted for over half of new units in Single-Dwelling Zones, now make up less than 20% of new output in these zones since RIP went into force.

Slow market

Developers that specialize in the kind of small-scale infill development that the legislation prioritizes say that the Seattle zoning boost is likewise unlikely to be sufficient in the short term to overcome market obstacles and costs.

Costs of construction, which increased early in the epidemic, are still high. Borrowing money for building is more expensive when interest rates are high. Many would-be sellers are sticking put because buyers are finding it difficult to afford the homes on the market. In addition, there is uncertainty around tariffs and the state of the economy as a whole. For the market to recover, at least some of those factors would have to change.

According to Cameron McKinnon, a builder at Confluence Development in Seattle, “things are very expensive for us to build as they are very expensive for our customers to buy.” Thus, nobody is very happy in general.

The outcome? New building has stopped.

Compared to the same period in 2020, Seattle issued permits for 60% fewer dwelling units in the first quarter of this year. Apartment permits dropped 80% and town home permits dropped 60%, but accessory unit and detached house permits increased.

Armbruster, whose company Ashworth Homes constructs town homes, backyard apartments, and detached homes, stated, “We’re being very selective right now on the projects that we take.”

Matt Hutchins, an architect and supporter of denser development, stated that if zoning makes more sites feasible, other considerations still make your proposal dangerous.

According to Michael Pollard, a consultant who works with local builders, larger buildings may necessitate improvements to alleyways or walkways.

Many developers are testing out potential projects as new zoning regulations go into force, while others are throwing up their hands, according to Pollard.

However, some builders are snatching up sites in hopes of building under the new regulations.

Even if the market is weak right now, builders are optimistic that things will improve in the future if demand increases or financing costs decline. Meanwhile, state and local legislators have pledged to expedite new home permits and are still removing additional restrictions.

Four residential lots, each presently occupied by a single detached house, have been offered by developer Cameron Willett’s firm. He intends to construct four town houses on each plot.

Suddenly, there are a lot more lots that could be contenders, Willett stated. Zoning is always the first obstacle you must overcome. Furthermore, zoning is no longer a barrier.

According to Willett, town houses were previously permitted in Ballard, Capitol Hill, Wedgwood, Greenwood, Wallingford, and Fremont, and he anticipates that projects would spring up in residential districts next to low-rise zones.

Perhaps town homes aren’t the most popular projects. Town homes are liable to city affordable-housing fees, which has caused many developers to steer clear of them. Rather than sharing walls, they are interested in cottage-style developments.

Brokers and builders say home buyers may become upset when they see enormous single-family homes with eye-watering price tags next to more inexpensive but smaller backyard homes and fewer options in between, as the existing quo encourages a stand-alone house, a detached ADU, and an attached ADU.

According to McKinnon, the revisions will make room for additional midsized homes, which are highly sought after by buyers of family-sized homes.

Without broader modifications, new types of housing, such as modest apartment or condo buildings with four or six units, are less likely due to existing constraints.

According to Hutchinson, new projects are unlikely to feel very different from what many Seattleites currently experience in somewhat denser regions.

According to him, the urban fabric of Seattle will not undergo a drastic change very soon. The rate of change will be somewhat similar to what we have witnessed in the past fifteen years.

Additionally, McKinnon pointed out that new home design, permitting, and construction usually take more than a year, even in the most competitive real estate markets.

Simply put, it takes a while for these new units to reach the point where consumers take notice.

This story was written by Jonathan Bach of The Oregonian/OregonLive.

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