Ready to live in an 800-square-foot house? Lacey is issuing permits for unique option

Contractor Cole Kelly is currently building a accessory dwelling unit for the Barrett family in the Lacey area.

Steve Bloom

The Barrett family of Lacey had to make some important decisions about their future housing needs, finally deciding that a family member would downsize into a new accommodation to free up space at an existing residence.

Such a move might sound familiar to many families trying to care for an older parent who still wants to remain nearby.

But for Mary Barrett, who has lived in Lacey’s Brentwood neighborhood for more than 30 years, she isn’t downsizing into a single-family home or an apartment. She will be moving all of 20 feet into an 800-square-foot accessory dwelling unit.

What’s an ADU? An ADU is a tiny home-like structure that exists as an accessory to a primary residence, either attached to the home or detached from it, and is viewed as one of the growing options to address Washington state’s housing shortage. Between 2000 and 2015, the state’s housing supply fell short of growth by 225,000 units, according to Gov. Jay Inslee’s Office.

The result has been a limited supply of single-family homes, a surge in apartment construction, and enough demand to make the cost of buying a home and paying rent increasingly expensive.

The median price of a Thurston County home continues to hover around $500,000, while average rents in the county are just under $1,500 a month, according to Thurston Regional Planning Council data. In a little more than a decade, the cost of buying or renting has just about doubled in expense, the data show.

In response, some local governments have taken steps to encourage what is known as the “missing middle,” the other types of housing that fall somewhere between a house and apartment, such as a duplex, triplex, fourplex or ADU.

A cold start

Lacey rolled out its ADU program in 2020 and 2021, the two years forever associated with the COVID-19 pandemic. But in 2022 the program showed signs of life, with the city issuing four ADU permits, said Ryan Andrews, Lacey’s planning commission manager.

The city is offering four approved design plans: A 480-square-foot studio, a 600-square-foot one bedroom and two 800-square-foot options — a single-story two bedroom and a two-story two bedroom unit.

Why isn’t the city issuing more ADU permits? One reason is much of Lacey’s housing stock was built in the 1990s, Andrews said, when homes were being built on tiny lots. However, many of the city’s older neighborhoods have much larger lots.

Andrews said he thinks it’s just going to take time for people to recognize those reinvestment opportunities.

One such area can be found south of Lacey Boulevard and north of 37th Avenue, between Golf Club Road to the west and Ruddell Road to the east. The Brentwood neighborhood happens to be in this area. It’s also near Wonderwood Park.

That’s where the Barrett family home is, on one-third of an acre, according to Thurston County Assessor’s Office data. That is plenty of room for an ADU. When Lacey officials talk about the program, they typically refer to 10,000-square-foot lots as the appropriate size for ADUs, although lots smaller than that will work, too, Andrews said.

Mary is downsizing into the ADU so that she can age in place and still be close to her sons, who will move into the primary residence.

One of her sons is a longtime renter, she said.

“After a while it just gets old, moving from house to house,” Barrett said.

She considered buying a home and renting it to her sons, but that was too expensive.

In this arrangement, her sons have stable housing, and after she passes on, they have other options, she said. They could sell the house and ADU, they could rent the ADU, or one son could live in the ADU while the other lives in the primary residence.

Is it affordable housing?

Mary’s 800-square-foot ADU is being built by Cole Kelly of Kelly & Associates LLC, an 18-month-old Olympia-based contractor. This is his first ADU project under his shingle, although he has built them before for other employers, he said.

Kelly began work on the project in January and expects to finish toward the end of April. In addition to the two bedrooms, it has a kitchen, bathroom and a small living area. His budget is around $224,000, although it could be less than that due to some Lacey incentives.

Kelly budgeted $15,000 for building permit fees, but the city is only going to charge him $1,600, he said. The city is also waiving the fees associated with connecting to city water and sewer.

That’s a major savings, he said. Instead of having to run water and sewer connections out to the street, he was able to tie into the home’s existing system.

Still, he acknowledged that even building an ADU comes with its share of costs. He hired subcontractors for the project and Kelly said he is conscientious about the types of building materials he uses, favoring higher quality materials over off-the-shelf materials.

What would he charge in monthly rent for an 800-square-foot ADU? Based on his expenses, Kelly thinks it would still be $1,500 to $2,000 per month, which is right around the average cost of rent in the county.

If he were building Lacey’s 480-square-foot ADU, Kelly said he didn’t think he could do it for less than $100,000, although he is encouraged by Lacey’s steps to streamline the process. That could put rent closer to an affordable range.

Olympia Master Builders supports the ADU.

“As an organization we’ve been working with local jurisdictions to adopt ADU policies for a few years now,” Executive Officer Angela White said. “We feel that ADUs are one more way to increase housing stock in a community. OMB is always a proponent of jurisdictions having a broad range of options when it comes to housing people.”

Rolf has worked at The Olympian since August 2005. He covers breaking news, the city of Lacey and business for the paper. Rolf graduated from The Evergreen State College in 1990.


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