24,000 people are expected to move here. But rules prevent building the homes they need.

Whitney and Luke Bowerman dream of building cottages on one of the few larger lots remaining in Olympia’s Eastside neighborhood.

They want to leave the existing trees on the Fairview Street Southeast lot, and reflect the character of the neighborhood in their design. The cottages would join a new, three-bedroom house also designed to fit the area.

But the city of Olympia has made it expensive to build cottages, the Bowermans said. They estimate that city fees alone will run $30,000 to $40,000 per cottage. And the cottages will be just between 500 and 800 square feet.

“The impact fees for a 500-square-foot cottage are almost the same as for a single-family home,” Whitney Bowerman said.

“But you can’t rent them for as much,” Luke Bowerman said.

If changes aren’t made to reduce the costs, the Bowermans said, they might have to abandon the cottage idea and build a more traditional subdivision. Out of respect for the neighborhood, they don’t want to do that.

Meanwhile, Olympia is poised for a large population increase, and city officials have identified “infill” — projects like the Bowermans — as one of the best solutions for the inevitable housing shortage.

Olympia’s population is projected to increase by 37.5 percent by the year 2040, the Thurston Regional Planning Council predicts. That’s a more than 24,000 people, if you include the city’s urban growth area.

To accommodate all of these people, the area will need to increase its housing offerings by 42.9 percent, or nearly 13,000 units. But unlike neighboring Lacey, Olympia doesn’t have much room in its urban growth area — meaning the city needs to make the most of the space it has.

“If we don’t address it, the problems will just get worse,” said Carole Richmond, who serves on the Olympia Planning Commission. “People will have to move away — they won’t be able to afford it here. Especially the young people.”

What is middle housing?

The city of Olympia is exploring “middle housing” as a potential solution.

This term is applied to anything that falls between apartments and single-family homes on the housing spectrum. It includes accessory dwelling units (known by many as mother-in-law apartments and abbreviated as ADUs), cottage housing, tiny homes, duplexes, triplexes and town homes.

This type of housing also tends to fall toward the middle of the price spectrum, explained Leonard Bauer, deputy director of the city’s planning department.

It works well for people who don’t necessarily want to live in an apartment, but don’t have a need for a big house. Think millenials who aren’t ready to buy a home yet, and baby boomers with empty nests.

“So many young people are looking, and they can’t find a place to live,” said Paula Ehlers, an Olympia planning commissioner.

As boomers age, many are wanting to downsize from their three- or four-bedroom houses, Richmond said. Some want to create new units in their houses to rent out or move their aging parents into. Some want to use those spaces to age in place.

“People don’t necessarily want their relatives to live in their house — they want some privacy,” Richmond said. “But they want them close by.”

City codes

Middle housing was built during the early part of the 1900s, then fell by the wayside as people pursued the American Dream after World War II.

People wanted single-family homes, so that’s all developers built, Bauer said. As cities developed codes in the 1960s, 1970s and 1980s, they excluded middle housing.

“We were so focused on the American Dream that we made it hard to do this middle-size housing,” Bauer said. “In some ways, we made it nearly impossible.”

Chris van Daalen, of the Northwest Eco Building Guild, examines city codes for the company’s Code Innovations Database. He describes the limiting codes as an “accident of history” rather than a purposeful move to eliminate middle housing.

“We got stuck with a zoning code that prioritizes single-family homes at the expense of everything else,” van Daalen said.

There’s been a major shift in the city’s demographics since then. About 70 percent of Olympia residents live in one- or two-person households, Bauer said. That shift has emphasized the need for smaller alternatives.

City officials began taking notice of the issues during the creation of the comprehensive plan — a process that took about five years, Bauer said.

So far, people seem to be most interested in the restrictions on accessory dwelling units, Richmond said. This type of housing may be created within an existing structure such as a garage or basement, or as a free-standing building.

Olympia’s codes make creating this type of housing virtually impossible, said local property manager Don Frasier. He made his living managing commercial and residential properties in multiple states.

Frasier and his wife retired to Olympia five years ago, and since then they’ve renovated 16 rental homes in the region. He said the restrictions here are tighter than in any place he’s worked before.

He pointed to the 16-foot height limit. City code allows attached accessory dwelling units to be as tall as the original structure. But detached units can only be 16 feet tall. That restriction makes it impossible to place a unit over an existing detached garage.

Frasier said he could get around the cost, and the units don’t have to go above a garage. But there’s no way around the rule that the property owner must occupy one of the units.

Neighboring Lacey and Tumwater don’t have that restriction. Neither do Portland and Vancouver, B.C.

“I’ll build three tomorrow if they let me,” Frasier said. “But they’ve got to get rid of that rule.”

The codes affecting the Bowermans also are a barrier for accessory dwelling units, Richmond said.

The work group is looking at decreasing impact, hookup and other fees to make middle housing more affordable. But there’s a catch.

“If we reduce the charges, they have to be made up somewhere else,” Richmond said. “That’s a problem.”

Olympia also is one of the few cities in Washington that requires fire sprinklers in new residential units. The Olympia City Council passed the ordinance in 2013, and implemented it in 2014 at the urging of Fire Marshal Rob Bradley.

Bradley said he’s heard that installing sprinklers costs between $2.50 and $2.75 per square foot in Olympia. That’s higher than the national average because Washington is a union state, and there aren’t as many sprinkler certified plumbers locally.

In Bradley’s opinion, the added cost is well worth it.

“The chances of you dying in a sprinkled residential structure are very, very low,” Bradley said. “Sprinklers make a huge difference in saving life and property.”

Luke Bowerman said he understands the importance of sprinklers, and he wants his tenants to be safe. But he found the process frustrating when building the single-family home on his property.

It was hard to find a plumber that would sign on for such a small project. The plumbers that did end up bidding were expensive, Bowerman said.

He ended up going with a Puyallup-based plumber, and the sprinklers ended up being about 6 percent of the total construction budget.

Sprinklers also are required in accessory dwelling units. Bauer said he’s heard that installing them in existing structures is difficult, especially in older houses.

The Bowermans also have learned that weird issues come up when you’re trying to build on vacant lots. For example, their portion of Fairview Street isn’t where it’s supposed to be, Luke Bowerman said.

The city likely paved over a driveway at some point, and the street doesn’t connect between Fir Street Southeast and Union Avenue Southeast. And Union cuts into the Bowermans’ property.

That will all need to be fixed as they develop their property, Luke Bowerman said.

“It’s like a gigantic puzzle,” he said.

Whitney Bowerman said it seems as if the builders are the only ones who see the entire spectrum of fees, rules and requirements. “It’s almost like they don’t think of it holistically,” she said.

Possible solutions

The city of Olympia is following in the footsteps of larger Northwest cities — Seattle, Portland and Vancouver, B.C. — to roll back the restrictions and make building middle housing easier and more affordable.

A work group is providing input to the city’s planning commission. Two planning commissioners — Richmond and Ehlers — also serve on the Missing Middle Work Group.

They’ve tasked 14 people to come up with solutions. The work group consists of builders, bankers, neighborhood association representatives, housing advocates, rental agents, architects and planning commissioners.

The Olympia City Council approved the group’s charter early this year, and the work group first met in March. Bauer said he expects the process to conclude by the end of this year.

The work group will present its findings to the Olympia Planning Commission, which will in turn make recommendations to the Olympia City Council.

It helps that other cities already have gone through this process — Olympia can try to avoid some of those pitfalls.

For example, parking has become difficult in Portland’s Hawthorne neighborhood after the city lifted parking restrictions, Bauer said. Portland also has seen builders tear down existing structures to rebuild with higher capacity housing.

Olympia is trying to avoid that, Bauer said.

Essentially, the city wants to promote the creation of new units without changing the character of its historic neighborhoods.

“This is really about fitting in,’ Bauer said. “People really like how a lot of our neighborhoods are.”

That’s what the Bowermans are going for.

They’ve lived in the Eastside neighborhood for 15 years, and this isn’t their first project designed to fit in. Their home, known for its elaborate Christmas light displays, is also in the neighborhood. They built it in the style and footprint of the home that previously stood on the lot.

They took a similar approach to the new home on the Fairview lot, and they hope to keep the area’s historic character with their cottages.

“It’s not that expensive to make things look cute,” Whitney Bowerman said. “It’s not that expensive to make sure it has character.”

This story was originally published August 12, 2017 at 9:00 AM with the headline "24,000 people are expected to move here. But rules prevent building the homes they need.."