ADU & DADU in Seattle & Bellevue

[Darren Chang]

Hi everyone, I came across this youtube video by Zack McDonald and realized in Seattle you can rent out your ADU and DADU even if your lot is zoned for SF (I'm currently not in Seattle so I'm a little bit slow on the local news, but I have a strong interest in Seattle for reason I'll explain later.) This literally allows you to turn your SF into a triplex! I looked up the SDCI website and confirmed the information. What do you think is the best way to take advantage of this policy? In the video they also talked about challenges faced by people who might want to use this new regulation: high construction cost & high land cost. It seems Nick is suggesting to build small to afford higher price PSF. What do you think is the best strategy?

Also do people know any other cities in the greater Seattle area that have adopted similar zoning changes? For example in Bellevue the zoning code allows you to rent out the ADU but not DADU, and the DADU is only considered as a guest cottage. Is my understanding correct? What about the other cities?

This is a link to the youtube video: https://www.youtube.com/watch?v=euWFdWgoL60&list=PL_HSVyVqhJ4NFrtRgIYFjy403MS3pV6h2&index=4&t=1s

Thanks in advance,

Darren

[Michael Haas]

@Robert Freeborn owner occupancy is a requirement in many cities, but it is NOT a requirement in Seattle or Tacoma. These are the two ADU / DADU markets where investors should be focused - not just because of friendly ADU/DADU regulations, but also because of the strength of the rental market in those cities.

There are some absolutely killer investing strategies you can build around this (SFH + DADU + Opportunity Zone Fund for instance, which would make all of your cap gains tax free), and DADU costs in particular, although high, are coming down. If you purchase single family rentals in Seattle or Tacoma you should be buying with an eye for creating multiple dwelling spaces, either immediately or leaving that door open for the future.