May has been a big month for small housing in Cascadia. Two cities—Bellingham and Portland—reaffirmed the region’s growing welcome to accessory dwelling units (ADUs), small homes that sit on the same lot as a larger single-family home, commonly referred to as mother-in-law apartments, garden flats, basement suites, and the like.

Bellingham’s city council voted on May 7 to expand its existing ADU regulations by permitting detached accessory dwelling units (DADUs)—stand-alone ADUs often called backyard cottages or laneway houses—in the city’s single-family zones. And Portland’s city council voted the previous week to indefinitely extend development fee waivers for all types of ADUs, so long as they aren’t used as short-term rentals.

ADUs can serve a range of housing needs for Cascadians at all stages of life, from college students looking for a place to rent during the academic year, to young couples looking for their first home, and folks making plans to age in place. The new policies in Bellingham and Portland will help bring additional diversity of size, location, and price point to each city’s housing stock—benefits Vancouver, BC, has long enjoyed thanks to its flexible ADU rules.

Bellingham legalizes detached ADUs

Bellingham’s city council gave the thumbs up this month to extend the city’s current ADU rules to permit backyard cottages or detached ADUs (DADUs) in single-family zones. The council also loosened some ADU building requirements and reduced permitting fees for all for all types of ADUs (the new ordinance begins on page 124 here).

The decision is part of the city’s efforts to respond to surging rents caused by a growing housing shortage (in fact, over the past year Bellingham’s rents have increased at an even faster clip than Seattle’s). The relaxed  regulations will expand opportunities for interested homeowners to build ADUs throughout the city, opening up more housing choices for residents.

Bellingham’s vote to permit DADUs is an important step in the right direction, but it’s a step that needs to be followed by many more. The revised law leaves in place several large obstacles to all ADU construction that were put in the books when the city first legalized ADUs in 1995. And these remaining ADU restrictions are tighter than those currently enforced in any of Cascadia’s three largest cities—Portland, Seattle, and Vancouver.

For example, Bellingham city code still limits the number of ADUs to just one per lot—Vancouver permits two. Bellingham still requires owners to live on-site and at least one off-street parking space for an ADU. Though that’s an improvement over the city’s previous law, which required an off-street parking spot for each bedroom in the ADU, Portland and Vancouver have long dispensed with these restrictions all together (and Seattle will have a chance to join their ranks later this year). Bellingham’s code continues to cap the number of bedrooms in an ADU to two; none of Cascadia’s three sister cities do this. The city also limits the total number of residents in an ADU to just four, regardless of their relationship to each other, again more restrictive than in any of the region’s main cities (though the new limit of four residents is a bump from Bellingham’s previous cap of three residents per ADU).

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  • To date, the cumulative impact of Bellingham’s barriers to ADU construction is relatively few permitted units: just 93 as of a count one year ago. That is equivalent to just half of one percent of the city’s approximately 17,400 single-family homes. This puts Bellingham’s ADU development far behind that of Vancouver, in which over a third of single-family homes have at least one ADU (and sometimes two), and even behind Portland and Seattle in which about 1 out of every 100 single-family homes has a permitted accessory dwelling unit.  

    Bellingham’s new allowance for DADUs throughout single-family zones is a key policy change on the path toward a future with a greater diversity of housing choices. But with so many other ADU hurdles still in place, the city isn’t likely to see the trickle of ADU production increase by much. And that means Bellingham will lose out on the opportunity to increase housing choices and provide some relief to the housing shortage and the high prices it causes.

    Portland continues to welcome ADUs

    Portland’s city councilors also made a decision to support affordable housing options this month: the council indefinitely suspended ADU development charges, which otherwise would burden every ADU project with an up-front fee of as much as $15,000. Since 2010, the city has instituted a series of short-term development fee waivers in order to encourage ADU construction. These fee waivers have helped catalyze the Rose City’s phenomenal boom in ADU creation  in the last eight years, making the city a national leader in this field. In 2009—the year before the first fee waivers took effect—the city issued just 24 ADU permits; permit numbers have climbed steadily each year since then, with over 600 permits authorized in 2016.

    Unfortunately, homeowners who may want to use their ADUs as short-term rentals can’t take advantage of the fee waiver. Owners granted the fee waiver who rent their ADU as a short-term rental any time within 10 years after completing construction must repay the development fee along with a 50 percent fine. That’s an unfortunate constraint given that income from short-term rentals can help many homeowners finance ADU construction.

    Without the added security of that extra potential income to help pay back construction loans, homeowners may forgo building their own ADU—and that means fewer new housing choices for the city. ADUs are a uniquely flexible housing type that can respond to changing housing needs over time. Perhaps they start as short-term rental units, shifting to long-term rental space that requires less owner upkeep, and easily morphing into housing for family members down the line. Restricting that flexibility only reduces the diversity of people who can benefit from these homes.

    Cascadia continues its progress toward more flexible housing

    Bellingham and Portland are models for other Cascadian cities looking to take steps to modernize their ADU regulations and unleash production of flexible, relatively affordable homes that blend well into single-family neighborhoods. Bellingham’s legalization of  DADUs is an essential move—backyard cottages are no longer banned! But to reap the full benefits of ADUs, Bellingham must go further to relax several remaining barriers. Portland’s decision to permanently eliminate costly development charges—a major roadblock to ADU construction for homeowners—is just the latest demonstration of the Rose City’s ongoing commitment to supporting ADUs.

    Both cities’ decisions this month are steps on the long path to a Cascadian housing future where there is a home for everyone.