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UPDATE 3/28/23: The Senate Local Government Committee declined to bring HB 1245 to a vote, thereby killing it.

UPDATE 3/1/23: The House voted 94 -2 to pass HB 1245. The bill was amended to legalize lot splits down to 2,000 square feet, up from 1,500 square feet in the original bill. Previously, HB 1245 and its Senate companion (SB 5364) were both passed out of their policy committees on unanimous bipartisan votes. 

A severe lack of modestly priced “starter homes” is shutting out more and more Washingtonians from homeownership. As the New York Times observed, nationwide, the small detached house has all but vanished from new construction.” 

One of the main reasons is no mystery: zoning laws that require every house to have a large lot. When there’s a shortage of homes, land prices go up, which makes it financially infeasible to build anything but a big, expensive house if it has to occupy a big, expensive piece of land. And in a double-whammy, large lot requirements themselves restrict the supply of homes, unleashing a vicious cycle of spiraling prices.

The solution couldn’t be any more obvious: legalize smaller house lots. And that’s what Washington bill HB 1245 (and its companion SB 5364) would do.  

And it would do so in an incremental, locally controlled way, by allowing homeowners to split their lots into smaller parcels—if they want to. HB 1245 is not a mandated blanket rezone for smaller lots. Small house lots would be created only when the owner of a lot decides to split it. 

What WASHINGTON’s HB 1245 would do 

HB 1245 is simple. It grants owners the authority to split their house lot once, into two pieces. For size, each piece can’t be less than 1,500 square feet and can’t be less than 40 percent of the size of the original lot. These lower size limits are intended to keep adjacent lots from becoming too dissimilar. They supersede local minimum lot size requirements.  

As a tenant protection measure, the bill prohibits lot splits that would involve demolition of any housing that is rent-restricted or rent-subsidized, or that has been occupied by a tenant paying market-rate rent within the preceding 12 months.  

Because it can be difficult to fit parking on small lots, the bill caps parking mandates at one off-street space per split lot. It also establishes a few guardrails for design standards. 

Lessons from California’s lot splitting bill: Gradual uptake 

Washington’s HB 1245 was modeled after the 2021 California’s SB 9 that legalized lot splits on all single-family parcels statewide. California went smaller on lot size, though, allowing splits down to 1,200 square feet. SB 9 also legalized duplexes on every lot, so in combination with lot splitting, every house lot in California now has the potential to hold four homes. 

A new study on SB 9 demonstrates the incremental, gentle rate of change we can expect if Washington legalizes lot splitting by passing HB 1245. A year after California’s law went into effect, the study finds, “some of the state’s largest cities reported that they have received just a handful of applications for either lot splits or new units, while other cities reported none.”  

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  • It’s too soon to nail down why uptake has been so low, but one theory is that in some places California’s liberal accessory dwelling unit (ADU) laws make backyard cottages a more attractive option than splitting a lot to add a new house. 

    The benefits of lot splitting: From starter homes to community stability 

    Allowing lot splitting would provide a second major benefit aside from the starter homes discussed above. It would create options for homeowners who want to downsize but also stay in their neighborhoods and communities.  

    Some owners may not want a big backyard and would prefer to see another family living in a house there. Others may want to build a smaller house for themselves on a split lot and sell the original main house to a larger family that needs more space. Others may opt to split their lot to create a home for extended family to live next door. Owners on fixed incomes who are house-rich but cash-poor could sell part of their land to give themselves a financial cushion.  

    In light of the ownership opportunities and owner flexibility offered by lot splitting, the Black Home Initiative, a new regional effort that targets the racial inequities at the core of the housing ecosystem in an effort to increase homeownership among Black households, has made HB 1245 one of its legislative priorities. Read more about its reasons in this policy brief. 

    To summarize, legalizing lot splitting:

    • Creates more homes, and less expensive homes
    • Increases homeownership opportunities at lower price points 
    • Generates starter homes to get people on the ladder of intergenerational wealth-building 
    • Increases housing options for families with children 
    • Creates lower-priced options in neighborhoods with good schools, parks, and amenities 
    • Enables infill home-building that’s locally controlled, incremental, and low-impact 
    • Gives cash-poor, house-rich owners a way to stay in their homes and communities 
    • Creates options for multigenerational households to live next door to each other 
    • Reduces demolition of modest houses to make way for McMansions 
    • Enables fee-simple ownership and standard mortgage financing, unlike the more complicated process of selling a backyard cottage through a condo agreement 

    What Washington currently has on the books regarding lot splitting is, effectively, a government mandate for one luxury house per lot. What HB 1245 would deliver, in a nutshell, is the option for two smaller, less expensive houses on a lot, if an owner wishes. That means more starter homes or options to downsize or host loved ones nearby or increase one’s financial security.  

    In short, these bills to legalize lot splitting are one piece of the solutions puzzle to address the state’s massive housing shortage—and open the doors for a diverse mix of Washingtonians in all types of communities to find the right home for them.