Thank you to our hosts and those were able to attend our recent backyard cottage open house. Here are some interior photos.
Learn more about backyard cottages and meet others who have built or are thinking about building a backyard cottage!
Colette and Chris built this backyard cottage as a short term rental. Their cottage cottage takes advantage of the sloping site to create a unique three level design. It features a generous master suite, a living room with vaulted ceilings and an 2nd bedroom/office on the top floor. 2 Bedroom, 2 Bathrooms. The cottage will be open Friday September 21st from 4:30 to 7:00 pm. Email firstname.lastname@example.org for more information.
We are looking forward to another busy year doing what we love, designing backyard cottages.
Last year saw the completion of a record number of backyard cottages and 2018 is shaping up to be another big year for ADUs. In 2017 the City of Seattle had a mayoral election during which housing and livability were major themes. The public and policy makers seem to agree that ADUs have, and will continue to play, an increasingly important role in our vibrant city.
In 2017 the city proposed code changes to encourage the construction of more backyard cottages and began preparing an EIS to inform the public and policy makers about the possible impacts of these changes. This process is schedule to be completed and the city council expected to vote on the proposed changes this summer.
Importantly, the Seattle Department of Construction and Inspections (SDCI) has at long last agreed to clarify the rules governing the size of cottages. We estimate that the current system, which is rife with inconsistencies, adds $1,000 to design and permitting costs and over six weeks to the permitting process. We are working closely with SDCI to ensure common sense interpretations for what is included in the allowable gross square footage are adopted into the next omnibus code update.
Even with the support of city council and SDCI, backyard cottages will continue to face hurdles. Intense competition for material and labor will see another year of double digit construction costs rises for the Seattle area. Rule changes under EIS review won't reduce the cost to build a backyard cottage even if more are built. Permitting and construction scheduling will also continue to be affected. SDCI is starting the year with a temporary hold on new building permit intakes and an ongoing 6-8 week increase in review time on projects already in their system.
In spite of these challenges backyard cottages are still a great option for many families, we are expecting another banner year for backyard cottages. We will be continuing to do our part in the community to maintain and encourage thoughtful planning and exercise patience as the city rolls out new policies and changes.
What follows is a condensed version of our blog. To learn more about backyard cottages and to sign up for our backyard cottage open house invitation list please visit our seattle backyard cottage blog.
ballard backyard cottage featured in country living magazine
Join us for a unique opportunity to tour backyard cottages (aka detached accessory dwelling units or "dadus") in Fremont, Greenwood, and Ballard. Starting with an open house at 4134 1st Ave NW from 10:00 - 11:00 am. Following the open house will be a tour of other nearby cottages. Sign up for our open house invitation list for more information.
Everyone knows that a home’s price is affected by such things as its size and condition and the quality of nearby schools. There’s also the $50,000 walkable cup of coffee, the $100,000 view and the $200,000 backyard cottage.
As in Seattle, backyard cottages are being built in Berkley in increasing numbers. In a recent berkleyside article, bay area real estate agents discussed the relative merits of various home amenities.
Pricewise, an in-law unit or a tiny home can boost a home’s value more than any other element, agents said.
“People love it when the house has a little separate cottage or in-law unit so they can accommodate friends and family who are visiting from out of state,” said Victoria Lynn Curtis, an agent with Better Homes and Gardens.
"Workers who telecommute can use such quarters as offices, and artists can use them as studios; double-income professionals can use them to house nannies or au pairs. Or homeowners can rent them out, generating a tidy income".
However real estate appraisers struggle with how to value backyard cottages and other ADUs primarily because there are simply not enough comparable sales to serve as a guide. Bruce Parker from microhouse and Stefan Hansmire were recently invited to participate in a panel discussion about backyard cottages during the Appraisers Coalition of Washington State conference. One topic of discussion was the use of backyard cottages as rentals. This trend has only increased in recent years as more people have become aware of and begun to use their cottages as short term rentals. Short term rentals provide a relatively high rate of return and cottage owners would like the rental income to be considered in the appraised value of their homes when seeking financing. However, most municipalities have owner occupancy requirements. In these cases, a lender or underwriter must asses the value of the home without income from an ADU because in the case of foreclosure the ADU must be removed before the house could be rented by the loan holder. That takes us back to the use of comparable sales to establish an appraised value. The contribution of an ADU to these valuations tend to be less than the cost of construction. This in turn makes construction loans harder to obtain for DADU construction. As a result, most home owners use cash or home equity to finance construction.
Value vs Cost
The cost of construction varies depending on a number of market factors including the cost of materials and labor. The cost of building a backyard cottage has been increasing since the recession. Assessing the value of a cottage for those planning to build one, involves consideration of the many possible uses of a cottage over the long term. As discussed, many people use cottages as rentals. In this case, a careful consideration of the rents in your area and anticipated costs and expected rate of return can help you establish a working budget.
Even when cottages are used as rentals, that is often only one of many planned uses. Ben and January's cottage in Magnolia is one example. They originally rented their cottage on AirBNB. Now that the cottage has been paid off, January's recently retired father has moved in and is enjoying being closer to his grandchildren and urban amenities.
While it may be hard to put a value to how a well designed home makes you feel or the value of having a family member living nearby, some qualities are easier to asses. If that family member is an aging parent who would otherwise be living in an assisted living facility, it is relatively easy to look at the costs of local facilities. For others building a new cottage may be less expensive than remodeling their existing house to more closely meet their needs. For example, new cottages can incorporate universal design components to assist those with mobility impairments. Having established a realistic budget based on your needs and values will guide the many decisions that make up design process.