Queen Anne Duplex with Option to Convert Attic Space

[Susie C.]

I have purchased a Queen Anne home that is currently set up as a duplex (with separate meters). It is zoned as a multi-family unit.  There is usable attic space that can be converted to additional space. Some questions: 

1.  If I am zoned as a multi-unit right now can I make the attic a 3rd unit that can be rented out and build out a stair case that can be accessed? For doing something like this would I need an actual engineer/architecture? I was going to draw up a plan with my contractor myself. 

2.  Do you think it would make more sense to create a third unit with full 1b1b or am I better off using it as just an extra bedroom/storage space? Cost for creating a 1b1b unit would be ~$15,000-20k excluding materials (special price on top of the current work that we're doing since we're remodeling two full units and everything has been gutted out and all plumbing and wiring is easily accessible and exposed).  From my research it seems for a 1b1b you can get $1200-1400 and I anticipate rental rates to further increase as more and more people move into the city. To me it seems logical to spend the money and get it back paid in full through rental within a year or two.

3.  Does anyone know if something like this needs to be permitted by the city? I read on King County (Seattle, Washington)'s site and it says permits are needed for almost everything from basic things such as changing windows to redoing floors, updating kitchen finishes, restroom remodels, etc. At what point do you actually get a permit or do you guys just all get permits for every little thing? 

Thanks in advance! 

[Adrian Chu]

Yes, it needs to be permitted.  And the city will make you retrofit the entire building to current codes since you are changing from 2 units to 3 units.  There is a good chance they will ask for structural updates and fire sprinklers.

It will cost you a lot more than $15-20k.  But you can look into it to see if it is worth doing.

[Adrian Chu]

Yes, it needs to be permitted.  And the city will make you retrofit the entire building to current codes since you are changing from 2 units to 3 units.  There is a good chance they will ask for structural updates and fire sprinklers.

It will cost you a lot more than $15-20k.  But you can look into it to see if it is worth doing.

[Susie C.]

@Adrian Chu Do you think it's a bad idea to just build it out without permits? 

We're living in the main unit that will be attached to the attic space and we were planning to use both spaces. In the future when we move out we were thinking of renting out the attic and the main level (separately) to make three units. 

[David Krulac]

@Susie C.

Depends on your local zoning, please check with them as zoning varies a lot in different areas.

I had an 1890 Victorian, it already had 3 units and could not be expanded to more than 3 units.  One issue was parking, there the requirements is 2 off street parking per unit, and we could not provide 8 spaces to qualify for 4 units.

We were able to add 4 additional bedroom in the 3rd floor attic, that was previously unfinished.  we changed a 1 br unit to a 3  br unit and a 3 br unit to a 5 br units.  The building was within sight of Town Hall and I told the contractor that he had to go to the Town Hall and see about getting a building permit.  They told him since we were not changing the "footprint" of the building no permit was required, which also meant no permit costs, no increased assessment, and no inspections.

3rd floor units have special requirements for fire escapes, and second means of egress, that 3rd floor bedrooms do not in many codes.  You want to check those requirements as well, you do not want to be lax in safety requirements, and the cost of steel fire escapes is not cheap.  One LL I know was able to buy used fire escapes from a building demo company and save some money there.

Don't build out without permits.  In extreme cases the authorities have fines the owners, made them rip out all "improvements" and in some cases permanently denied them occupancy permits so that the building could never be rented again.  In one case I'm familiar with the property owner built a 2 story brick building in his back yard as a second unit.  The building is brand new and never occupied 20 years later!

[Tatiana Gershanovich]

If you send me the address, I can look into your zoning to see if it will allow you to have 3 units.

[Paul Dudley]

Susie, you are a braver soul than I.  

I live in upper QA and have seriously looked at just about every multifamily home and apartment building for some time now.  I've either passed or been outbid every time.  Cap rates are definitely in the 'buying for appreciation' range.

Regarding being zoned as a multi-family unit.  If you are talking about upper QA, most of it is SF5000.  There are many SF homes with mother-in-law units/DADUs sold as "legal duplexes" that in fact are only legal if one of the residences (typically the primary residence) is owner-occupied.  A local legislator has proposed changing these rules but to my knowledge it's still in draft phase.  Even then I believe the proposal requires that landlords must occupy one of the units for one yr before legally renting out the entire property.

You sound like you know what you're doing - my guess is this is nothing new but just in case you may find this link useful: http://www.seattle.gov/dpd/cityplanning/completepr...

They send out announcements and an email blast every so often that you can subscribe to through that link.  I have no idea how frequently zoning is enforced...I suspect there are many folks coloring outside the lines so to speak but that's up to you.  Although unlikely to be scrutinized, personally I would be careful as it could have implications for liability if an insurance issue arose, something happened on the property, etc.  

As for permitting, Adrian is correct.  Any construction will need to be permitted although you don't necessarily need architect-drawn plans to get it approved.  The wait is longer, though, if you don't use a known architect or contractor i.e. if you draw it up yourself.  I was considering a project like this about 6mo ago and was told to expect delays and revision requirements even though the plans were to be drawn up by an out-of-town professional architect.  

Locals can go down to the Permitting/Zoning office and get a free consultation: http://www.seattle.gov/dpd/aboutus/whoweare/applic...

The folks there are very helpful and the zoning & permitting desks are in the same large room.  Of course that's not going to do you any good if you're in SF.  Don't waste your time trying to get your consult over the phone - I've tried that, they won't do it.  If you have a SEA trip planned it would probably be time well spent, though.

Current rental rates for a run-of-the-mill upper QA craftsman are roughly @ $2/sqft give or take depending on size/location/amenities/etc. A converted attic should be less than that as ceiling heights can be a major problem in these old homes...maybe $1.50-1.75/sqft but that's just a guess.  Lower QA is less per sqft across the board. 

I'm really curious which one you bought and if I know it...best and good luck!

[Paul Dudley]

Okay I started typing, then stepped away, then posted and now see you're living in the house - draw it up yourself, go down to the land use/permitting desk when you get here and see what they say.  I'd advise being as frank as possible with them.  They'll keep you straight.  Take your time, pay for the proper permitting and you'll be rewarded in the long run.  Again, I agree with Adrian - finishing an attic around here will be a lot higher than 10-20k even with sweat equity.

[Harrison Liu]

I have a couple triplex in Queen Anne. Each unit has its own entry and has a kitchen even if it is a studio. A 1bm1bh without a kitchen and separate entry would be considered a unit by the city? I am not sure.