Tacoma's New Rules Simplify ADU / DADU CONSTRUCTION - Tacoma, WA
In May of 2019 the city of Tacoma officially adopted an awesome new set of simplified regulations allowing just about anyone to build a mother-in-law apartment, tiny house or a DADU (detached accessory dwelling unit) right in their backyard. The previous rules required homes that were zoned single family to apply for a difficult zoning change, as well as several other special permits to be able to construct an additional dwelling unit on their property. This old permitting process was long, difficult, expensive and not guaranteed, which really prohibited homeowners from going through with the process. With the new regulations in effect, now every single family home in Tacoma can construct an accessory dwelling unit (up to 1000 sq ft) or convert an existing structure (basements, garages, etc.) on their property without needing a zoning change, variance or any special permitting.
As builders, fans and long time supporters of tiny homes and other small, efficient spaces we were super excited when we saw the progressive stance the city of Tacoma has taken to make it easier to build tiny homes and ADU’s in Tacoma. Not only will the new rules allow for more affordable housing to be built, but it will allow for the average homeowner to gain rental income which will help cover the mortgage. If you’re looking for a real estate agent to help you find the perfect Tacoma property to build or convert an existing garage to an ADU / DADU we recommend you reach out to our favorite Tacoma Real Estate Agent Laura Anderson.
Many people get excited when they talk to us about building an additional unit on their property, enticed by the idea of bring in some extra income to help cover the mortgage, but they’re often overcome anxious and fearful of taking the leap and going for it. We’ve put together a few facts below to help answer some common questions and concerns we’ve found in our experience bidding these projects and working with home owners and landlords.
How much does it cost to build a NEW tiny home, mother-in-law or DADU / ADU (accessory dwelling unit) in Tacoma?
This is super common question. It’s difficult to answer exactly without knowing all of the details about the building site and the home, but we can offer some ball park numbers to help our clients gauge. (These numbers have been updated as of June 2021).
400 - 750 sq ft unit = $150,000 - $175,000
750 - 1000 sq ft unit = $175,000 - $225,000
Now these numbers are just rough estimates based on our past experience with ADU / DADU projects in Tacoma, but they should help folks get a gauge on costs of some average home builds. Additionally, these estimates include all necessary labor, materials and permitting fees.
How long does it take to build a home?
They take a minimum of 6 months to complete, but average 9-12 months with all of the design and permitting. These estimates can change depending on size, design, materials and permitting/inspections, but they are good place to start when planning a projects timeline.
How do you pay for the construction of an additional dwelling unit?
There are several different ways people finance the construction of an additional home. Since these ADU’s or DADU’s are generally tiny homes or small homes they are much less expensive then traditional home construction allowing for some people to build them with money they have saved over several years. In fact, if you qualify as a first-time home buyer, you can withdraw up to $10,000 from your IRA to use to help build a home without having to pay the 10% early withdrawal penalty. Another way people finance the building of an additional unit is by taking out a home equity line of credit or HELOC to fund the construction process. The last way that people pay for their new building is by taking out a construction loan, which is similar to a conventional home loan. The process is quite simple and easy, but don’t take our word for it, we recommend you talk to your mortgage broker about what the process would look like for you.
When does the unit start making money?
There isn’t an exact formula for how long it takes to make back the money from the construction process because the rental income will vary by location, but based on the average rental market of new units in Tacoma we can offer some rough ideas.
A brand new 600 sq ft 1 bed / 1 bath home would rent for $1600-$2000/Month ($20,000 + per year). This would would recoup the costs of construction in 5 years.
A brand new 800 sq ft 2 bed / 1 bath would rent for $1800-$2200/Month ($25,000 + per year). This would also recoup the cost of construction in 5 years.