Washington SB 1110/5364 - Adding middle housing and easy subdivision

[Marc Sudd]

Hi all,

I currently own a rental in a suburb of Seattle that is a ~1000 sqft home sitting on a 20k sqft lot. There is a small detached garage on the lot, but most of the lot is flat lawn, with a bit of the land classified as a critical area sloping down into a greenbelt. Recently, the Washington State government has pushed through two bills that are very likely to pass, which will remove single family zoning from most of the Puget Sound Area, as well as enable homeowners to divide lots into 2 smaller lots. Pretty similar to California's SB 9.

Before, I had been thinking about making an ADU down the line to be able to get some use out of the empty land, but it seems like these two laws will allow me to develop the lots pretty significantly. I was thinking about subdividing to keep the existing house on a smaller portion of the lot, and build a fourplex on the subdivided portion to get some use out of the land.

My question is two-fold: In this real estate market, will building a fourplex be a good investment? I understand that this is highly dependent on a multitude of factors, but based on the trend of interest rates and the chilling of the housing market, is this maybe something I should pursue? Also, would it potentially be worth eliminating the existing home to make room for more housing?

Any other commentary on the bills is welcome!

[Bradley Dosch]

Hey Marc, that sounds like a neat house you own and have some good opportunity with the land. My team and I have also been contemplating how these new bills will affect ours and our clients' projects. 

In the case of having a newly vacant subdivided plot of land, I do think building the max amount of units makes the most sense. Not only from an investment perspective but also from a public benefit standpoint. We gotta house more people. I hear you about the cooling of the market, but I think that's a short term viewpoint. Housing, especially in the Seattle area, will always be needed. Owning this asset long term and ethically using it is a great way to make money and help the issue. 

The existing house is an interesting issue I've also been thinking lots (pun intended) about. My initial instinct is to keep existing construction just to keep things simple and not make a huge toll on our planet, especially if the house is in good condition. I suppose there exists some threshold depending on the condition of the house and how "worth it" it is to salvage it. 

My go to strategy, without knowing much about you and your place, would be to subdivide the land, build the most dense and attainable housing possible on the new land, keep the existing house and add a DADU on the existing lot if possible.

So many options! Hope this helps. My team and I do these projects often in the Seattle area and are happy to chat more. We host monthly meetups and would love to meet you!