Seattle’s City Bldr Tackling the Housing Crisis, One ADU at a Time
As big tech and other industries in Seattle, Portland, and other West Coast cities are continuing to add jobs, the housing market is feeling the pinch. Seattle’s local economy has created over 220,000 jobs, according to Blokable founder Aaron Holm, but here’s the issue: “Seattle is primarily zoned for single-family housing. Housing is a regional issue, and we need to build thousands of thousands of housing units. We should build faster, higher quality, more cost effective, with new technology and capabilities.”
Really, it’s not just housing that is an issue- it’s affordable housing.
So why is the ADU, or accessory dwelling unit, market booming along the West Coast?
In West Coast cities like Seattle and Portland, those coming for the new jobs created by the tech industry are faced with sky-high rents and cutthroat competition for housing, driving prices ever higher. Consequently, Portland is also relaxing previously stiff ADU regulations, allowing more homeowners to place ADUs on their property than before.
CityBldr, one of the ADU developers in Seattle, estimates that there are roughly 56,000 available lots, but less than 1600 have been built in the last 25 years, according to an article posted to GeekWire. The ADUs, while targeting both housing for the growing homeless populations along the West Coast, are also a gateway for lower-income residents a foothold into the desirable neighborhoods, where they were previously locked out by prohibitive cost.
In order to grow the community to sustain the new jobs and provide housing, what needs to happen? According to Holm, that’s three things:
- Identify sites for backyard cottages systematically
- Provide homeowners viable financing options for ADUs
- ADUs need to be able to be produced in accordance with market needs, and that means fast, efficient, and affordable.
Addressing those concerns, at least in part, is the new company, Loftium. Loftium helps homeowners take some of the bite out of ADUs or adding additional living spaces, like garage apartments, onto their homes, by covering either some or even all of the down payment. In return, the owner rents the ADU or additional living space on Airbnb, with a rent agreement ranging from a year to 3 years, splitting profits with the company, with Loftium taking 70% and the owner 30 until the loan is repaid.
While the split may seem steep initially, CEO Yifan Zhang points out that “By building a backyard cottage or adding a mother-in-law unit to their basement, homeowners create more housing, add rental income now while living in their home, and add value if they eventually want to sell their home.”
Seattle, however, is committed to moving forward, and recently passed some of the least restrictive policies allowing ADUs on July 1st of 2019, allowing up to three residences on most lots. In a unanimous vote, City Council enacted legislation freeing up the way for homeowners to add ADUs to their properties. One thing that sets this policy apart is just that, the availability of up to two ADUs, while also, enacting a size limit on those new houses.
Morales, D. B. (2019, July 1). Seattle Says Yes to the Best Rules in America for
Backyard Cottages. Retrieved from Sightline Institute: https://www.sightline.org/2019/07/01/seattle-approves-best-backyard-cottages-rules-united-states/
Nickelsburg, M. (2018, May 23). A solution in your backyard? Startups take on the
housing crisis with new approaches to urban cottages. Retrieved from geekwire.com:https://www.geekwire.com/2018/solution-backyard-startups-take-housing-crisis-new-approaches-urban-cottages/