What HB 1337 Means for Seattle

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A Closer Look at Washington’s HB 1337:

What It Means for the Greater Seattle Area

7/31/25 - Sebastian Velasco

Washington's housing market is always on the move, and a key piece of legislation, House Bill 1337 (HB 1337), is poised to reshape how we think about property and potential. Passed in 2023, this bill is all about easing the barriers to building Accessory Dwelling Units (ADUs), a move that aims to increase housing supply and affordability across the state.

But what does this actually mean for homeowners, buyers, and sellers in our unique market here in the greater Seattle area? Let's break it down.

What is HB 1337?

In short, HB 1337 is a state law that mandates cities and counties to allow the construction of ADUs in areas designated for single-family homes. The goal is to create more housing options, combat the affordability crisis, and provide homeowners with new opportunities for rental income and multigenerational living.

Key changes brought by HB 1337 include:

Two ADUs per Lot: Jurisdictions must allow for at least two ADUs—in any combination of attached or detached—on residential lots.
No Owner-Occupancy Requirements: For the most part, the bill eliminates the requirement for a property owner to live in either the main house or the ADU. This is a game-changer for investors and those looking to rent out both units.
Reduced Restrictions: The bill sets statewide standards for things like ADU size (no less than 1,000 sq. ft.), height, and parking, making it easier to navigate the permitting process.
"Condo-izing" an ADU: A major highlight of the bill is that it legalizes the sale of an ADU as an independent condominium unit, separate from the primary residence. This opens up entirely new possibilities for property division and sale.
Conversion Flexibility: The law allows existing structures, like garages, to be converted into ADUs even if they don't meet current setback or lot coverage requirements.
Reduced Parking: Off-street parking requirements are limited, especially for properties within a half-mile of a major transit stop.

How HB 1337 Affects You

For Buyers

As a buyer, this bill significantly expands your options. A single-family home is no longer just a single-family home; it's a potential income-generating property, a flexible space for aging parents, or a way to get creative with housing.

Increased Property Value: A property with an existing ADU or the potential to add one becomes a more valuable asset, offering a built-in revenue stream or a place for a family member.
More Options: With the ability to build up to two ADUs, buyers can look at properties as a "house hacking" opportunity, renting out a unit to help cover the mortgage.
Location, Location, Location: Properties near transit stops are even more appealing, as they can be developed with little to no parking requirements.

For Sellers

If you're a seller, you're sitting on a property with potentially more value and broader appeal than before.

Attract More Investors: Your property's new development potential will be a major draw for real estate investors. The ability to add multiple rental units on a single lot makes it an attractive investment.
Higher Offers: A property with the ability to add an ADU or a "condo-izable" ADU may command a higher price from buyers who see the long-term value and flexibility.
Multi-generational Appeal: Your home becomes a perfect solution for families looking for living arrangements that can accommodate multiple generations.

For Investors

This is where the new law truly shines for investors. HB 1337 is a catalyst for new investment strategies and opportunities.

Maximize Returns: With the removal of owner-occupancy requirements and the ability to build two ADUs, you can now generate two or even three rental incomes from a single property.
Unlock Hidden Value: Many existing single-family homes in Seattle and King County now have untapped development potential. A property that might have been overlooked before could now be a goldmine.
"Condo" Out and Sell: The new rule allowing the independent sale of an ADU as a condo unit is huge. This allows you to develop a property, sell one unit, and keep the other, all while minimizing your initial investment.

What's Next?

While the bill passed in 2023, cities and counties have until their next comprehensive plan update (typically by the end of 2024 or mid-2025 for the greater Seattle area) to adopt the new regulations. We are already seeing some local jurisdictions beginning to implement these changes.

For anyone in the market, it's more important than ever to work with a professional who understands these legislative shifts and how they can impact your real estate goals. This bill isn't just about building homes; it's about building wealth, opportunity, and community.

Bibliography

"Bill 1337 - Washington ADU Restrictions." HouseHack Seattle. https://househackseattle.com/blog/bill-1337-the-radical-upcoming-zoning-overhaul-that-real-estate-investors-need-to-know-about
"Understanding HB 1337: What It Means for ADU and DADU Construction in Seattle and King County (2025)." Seattle ADU Builders. https://www.seattleadubuilders.com/understanding-hb-1337-what-it-means-for-adu-and-dadu-construction-in-seattle-and-king-county-2025/
"Washington State House Bill 1337 for DADU's and ADU's." Tacoma DADU. https://tacomadadu.com/bill-1337-dadu/
"The Impact Of Seattle Zoning Laws On Home Sales In 2024." The Madrona Group. https://www.themadronagroup.com/impact-of-seattle-zoning-laws/
"Legislative Requirements | Middle Housing and Accessory Dwelling Units." Let's Talk Mercer Island. https://letstalk.mercergov.org/middle-housing-adus/news_feed/legislative-requirements
"Informative Q&A Regarding the Impact of Middle Housing Legislation on Appraisers." Washington Realtors. https://www.warealtor.org/about-us/contact-us/news-media/blogdetails/articles/2023/10/17/informative-q-a-regarding-the-impact-of-middle-housing-legislation-on-appraisers

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