Why aren’t more pre-approved DADU plans being built?

Data from the City of Seattle shows that about 10% of DADU permits are from pre-approved plans. Pre-approved plans have a fixed low price and some permit approvals in place. That sounds good, but this case study helps illustrate why custom designs work better for the majority of those choosing to build DADUs.

6034 5th Ave NE Custom design sold for $917,000. Permit time 38 days.

8916 Corliss Ave N Pre-approve plan sold for $612,500. Permit time 61 days.

These two DADUs are very similar on paper. They are the same size, neighborhood, proximity to I-5 (noise) and developable lot area. And both were built for sale by developers. And while the two DADUs sold within a few weeks of another, the custom design sold for 50% more. Neither is a victory for affordable housing advocates but, we live in a world where sales price is a reasonable proxy for value and value for our clients is what we strive to achieve.

Value:

There are several reasons why custom ADU designs are better able to create value for their owners. DADUs are by definition infill developments built in close proximity to a primary residence. In Seattle, that means working around existing houses on small lots often with many constraints but also with opportunities. Making the most of those opportunities doesn’t necessarily cost more but it does take thoughtful planning. Given the high cost of construction, and particularly just getting even a basic dwelling built, the cost of design is nominal to the value created and often results in lower construction costs.

Flexibility:

Perhaps the greatest value of customization is flexibility. In addition to the constraints and opportunities presented by the site, the use of DADUs is the primary driver of design. And while good design components may be common to many ADUs, the best value comes from good planning. This is especially true when designing for uses and users who may change over time. It is common for a DADU to be used by a family member, a short term rental, or commonly as a smaller home in which to downsize. Custom designs may also incorporate many features not included in pre-approved plans including three bedrooms and garages that can more readily accommodate larger families. Since the most recent code changes demand has increasingly been for larger DADUs featuring 3 bedrooms and a garage.

Cost:

The construction cost for these two ADUs was approximately the same. We worked with our client from the beginning guiding good design decisions, deciding where to spend a little more to get the best overall value. In this case, the best value came from the overall design of the DADU and taking best advantage of the site. The additional cost of the custom design and permitting was around 3% of construction cost.

Permitting:

Pre-approved status means that the plans have been pre-approved for ordinance structural (O/S). This saves time with one review. However, there are many reviews that occur simultaneously and the o/s review is one of the quickest. In this case the the pre-approved plan took 61 days to permit and our custom design 38 days. Because we have many years of experience permitting DADUs on even the most challenging lots, we can permit faster and smarter. Making good decisions around design and particularly site design can avoid time consuming and potentially costly mistakes.

Time:

The Pre-approved plan for Corliss Ave N is SDCI’s most popular in part because it appeals to developers who whish to save time. In this case, not only did the pre-approved plan take a month longer to permit, it took two and a half months longer to sell than the custom design. Much more time than our typical design and documentation process takes.

Satisfaction:

Few of us will ever have the satisfaction of living in a home that we designed. It is fun to imagine and implement the design of your own dream home.