Mastering DADU Development- An Interview With Condo Expert Katy Sweeden

Christian: [0:03] Hello, hello, and welcome to another episode of the Awesome in Seattle podcast. This is your host, Christian Nossum, with the Awesome Nossum Group and I got my wonderful co-host today- Hello … Ms. Shannon Nossum.

Shannon: [0:13] I'm here. I'm

Christian: [0:14] excited. You are here. And we have an amazing guest, Katie Sweden, Dimension Law Group. She is the condo master. Literally, we've used her numerous times. She is the one that fully understands how to make a DADU a condo so you can actually sell it off. And today, not only are we talking about that, but we are also talking about two very important bills that were recently passed in the State of Washington. They are bills HB 1337 and 1110, and these are going to change the game in real estate and the state for- ever moving forward. Like, it's really gonna change how things are, are played out. So they're gonna allow for a lot more density. So basically, the gist is you're gonna be able to put a duplex on basically any single family lot in the- Yeah entire state. And then some, you're gonna be able to put four units, and some you're gonna be able to put six units, just on a regular old house that you can't do anything other than a house right now. In about a year, you're gonna be able to do a lot more. So today, we're gonna go way over- Mm-hmm … all of that stuff so that you can be prepared ahead of time for what is to come. So let's get into it.

Shannon: [1:29] Katie, thank you for coming. I've been wanting to chat with you about these laws and about condos for a long time. I mean, I talked to you about my own deals. Right. Katie does our condos, and so I'm beyond thrilled to ask you all the questions that I have had- Yes … for a while.

Christian: [1:43] And that everyone asks us, and we're like, "We should just- Yeah ask Katie."

Shannon: [1:46] I'm like, "Go ask Katie. I don't know the answer."

Katy: [1:48] I'm really excited to be here. Thanks for having me.

Shannon: [1:50] Yeah. Of course. Okay, so before we get too deep into the technicalities of all these things- Mm … can you tell us a little bit about yourself, what you do, and kinda how you got started in it?

Katy: [2:00] Yeah, of course. I practice real estate law, obviously, primarily in land use and development, and I have been for, um, let's see, since 2016. And I primarily did CC&Rs, and easements, and title review and stuff when I started out. And then when the law changed in Seattle, and in the state when Wakiya was passed, they synced up really well because Seattle updated its building code, and then there was this new federal law, law called Wakiya that passed. And at, at my previous firm, my boss had said like, "We should start doing condos." Right. And I said, "We are so busy. That is a horrible idea." And he said, "No, I think it's gonna be a thing, and you're gonna do it." Oh. So well, okay. Thanks. I mean, so- I guess I'll

Christian: [2:42] learn that.

Katy: [2:42] I, yes, I kind of begrudgingly learned condos, and I'm… That was a genius business decision because as we all know, I mean, condos have just taken off. Mm-hmm. So what started as kind of this small thing we thought we might do on the side grew into my primary area of practice. And I mean, at this point I've done probably 1,000 condos. Wow. Um, so it's-

Christian: [3:04] Especially crazy considering there's only probably a few thousand of these type of condos in the state. Katie is the master. She's done them all. And you've done, done probably more than half of them.

Katy: [3:13] I- Yeah, because I mean, a lot of attorneys that did it before, it was the big high-rise condos. Yeah. And those are just so different. Yeah. You know, I don't- Very different beast … I don't really do those. Um, and so this is just a completely different thing, and you have to think of it differently. And I, I think my background in land use really helped because I see people do these that aren't in real estate and development, and this is like a really easy way to test the waters for new investors and new developers. And they might not know to check the site for access, or garbage, or parking, and I have a background in that. So I can look at the site overall, and I know what questions to ask to make sure that you're not creating a unit with no access. Um, that's a very common one that I see. Oh. So yeah, it's turned into just- A very busy part of my practice, and it's been a lot of fun.

Shannon: [3:55] Okay, so those that don't know, can you kind of explain the basics of condos, and why are people creating condos when they're building a DADU, like how we build?

Katy: [4:04] Yeah, that's a great question. The reason people do condos on, like, DADU and single family lots is because that's the only way that you can sell those separately. You can't subdivide, um, for a couple of reasons. One, usually the zoning wouldn't allow it. There's not enough square footage. Two, even if you could, you can't actually create a separate lot for an accessory dwelling unit. It has to be on the same underlying parent parcel as the primary residence, the single family. So this is the only way currently in the state that you can sell a single family separately from the accessory dwelling unit.

Shannon: [4:39] Yeah, and this for us, we've been following this DADU process in Seattle for, since the beginning. Christian- Mm-hmm … as an agent has been watching it, me as a former attorney has been watching it, and so, uh, we always knew that it would be interesting, especially when they said, "You can sell these off separate." Mm-hmm. Christian and I both, light bulb went off, oh my gosh, there's a lot of value here. There's definitely a good investment strategy around that. Yeah. So we saw a huge uptick- Mm … in that and people doing this kind of development. How much does it cost is the question that- And high on everyone's list … I think everybody wants to know.

Christian: [5:12] Yes.

Shannon: [5:12] W- how long does it take- Mm-hmm … and how much does it cost?

Katy: [5:15] Yes. So how much does it cost? I'll give you two different answers. One, if you're planning on selling one or all of the units, it doesn't matter, but if you sell at least one versus keeping them all as rentals. Um, and the reason those are different is because if you're selling any, you need additional things beyond the condo map and the declaration. You need a public offering statement, a budget. You have to have an HOA transfer meeting so that the new owners are set up and ready to go. So if you're not selling any, I'd say between 3,000 and 4,000. 4,000 is kind of high. I would expect 3,500- Yeah … for it to be around there somewhere. But keep in mind, if in five or 10 years or whatever point in the future you do decide to sell a unit, you still need to do all those other things you didn't do at the beginning.

Christian: [5:57] Mm-hmm.

Katy: [5:58] If you are selling the units, then I tell new condo clients to budget about $8,000. Now, it's not super likely that a repeat condo client will come in quite that high, but I've done enough of these to know that sometimes new clients just have more questions- Yeah … and they need a little bit more hand-holding, and that is fine by me. I want my clients to fully understand the process. But sometimes it does take quite a bit of extra time. So repeat condo clients don't typically come in that high, unless, you know, they change directions mid-project and we kind of have to redo a lot of work, of course. Some sites are just more complicated than others. But generally speaking, 6,000 to 8,000 is a pretty decent range.

Shannon: [6:39] Yeah. I feel like the first time we did it, even with our background, we asked you a lot of questions. Yeah. Yeah, I mean- 'Cause we really wanted to understand it, and I think- Yes … uh, it's smart the first time that you do it to really get that education from your attorney. Probably it's gonna be Katie 'cause she does so many of these. Um,

Katy: [6:54] and then one thing I'll add is it's n- you have more than just legal fees. You'll also need to hire a surveyor to make the condo map. Mm-hmm. Typically, that also includes them doing, like, a boundary topo survey- Mm-hmm … that you need done for your plans. So the total cost for both the boundary, um, survey and the condo map is typically between 6,000 to 10,000, depending on which surveyor you use. Ask me for references. You get what you pay for a lot of the time. Yes. And I can't tell you how many times clients thought they could save $800, and they ended up with three additional months of holding costs. Like, I mean- Mm-hmm … they just don't compare.

Christian: [7:29] Yeah.

Katy: [7:29] I can help you out. We can find- Yeah … a surveyor that can work with whatever your timeline is at that time, and still, you know, that, that doesn't mean it's gonna be $10,000 either. I know plenty of surveyors on the lower end who, it just, it depends on their workload and a lot of things at the time that you're starting the process.

Shannon: [7:46] I do have one follow-up question. You mentioned that if you're selling the condos, it's one price, and if you're not, it's another price. Why would someone condo it if they're not selling it? Or is it for financing reasons?

Katy: [7:57] Yes, typically. Okay. Um, sometimes they just want it to be done so that if they decide at some point to sell, they d- don't have to do all that work then. It's already finished. Originally, people were doing it because they were worried the laws were gonna change, and then it wouldn't be allowed, and then they'd be grandfathered in. Mm. Oh. I don't really see that you know, obviously, especially with the new bills, I don't see that as a risk currently, but usually it's for financing. Mm-hmm. So if you buy an existing single family, a lot of people don't have the finances to also build another structure in the back. So what we do is we condo it. We create a vacant unit. You don't even have to have approved plans. Mm. Um, and I'll talk through my client with the specifics of that site, and we consult an architect to see what we think is gonna get approved, but the- we can create a vacant unit, and then they can, you know, switch over their financing so it's just on the unit that the single family is on, and then they can secure separate financing, like a construction loan or something, for the ADUs unit.

Christian: [8:53] Nice. That's, that's brilliant. That's super smart way to go because getting construction financing isn't always the easiest part of this process. Exactly. It's actually pretty tough. It's also a little more expensive than a normal, standard single family loan.

Katy: [9:06] Yes.

Christian: [9:06] So doing that is actually very smart, and it makes a lot of sense. What are the main challenges involved with these condos, or what are some of the things that people get stuck on most?

Katy: [9:19] I would say the main challenge is having people, my clients, and the surveyor understand the site. Some surveyors have done more than others, so I always tell my clients, "I can work with any surveyor, but, you know, it's… It might be 30 minutes of review and consult time with the surveyor versus two hours," 'cause there might… You might need a lot of back and forth. I think another common issue is people waiting too long to start the process. Mm-hmm, mm-hmm. I would rather have you start sooner rather than later. And I tell people all the time, "Oh, you're good. Call me in six months." Yeah. Like, you don't need to do anything now. Yeah. But it's worth that just 15 minutes, let's go over it, let's talk about it, because multiple times I've gotten emails like, "Katy, I am so sorry. I forgot." "I forgot I had to condo these. They went on the market on Monday." Oh. "What can we do?" Oh my gosh. Geez. Oh, yeah, multiple times. And sometimes it's not even their fault. Sometimes they were given bad information. Sometimes they- Wow … thought it was done. Sometimes they just know- Wow … that I can get stuff done, and they thought, "Oh, Katy'll be fine. She can handle it." Geez. And I do, but it's stressful. Yeah. Not as much for me. It's more stressful for my client, because then they have closing scheduled, and- Mm-hmm … you know, you can't close until the condo's recorded. Mm-hmm. Um, I've had, I've had clients do that too. It's… So that's another thing. Don't, don't close. Don't close on any unit, um, until the condo's recorded. Yeah. And I tell my clients, I tell their agents, like, "If you're not sure, call me. Call me personally, and I will tell you." Mm-hmm. Um, because what happens is you're not selling a condo unit. You're selling the entire parent parcel. Yeah, so now you just sold- That's the only legal description you have … Speaker: both places- Yes

Christian: [10:51] for the price of one.

Katy: [10:52] Yes. Yeah. And it is, it is a massive hassle to undo. Yeah. Uh, again, not for me. I, I can't really undo that. Yeah. You have to work obviously with your agent and then- Mm-hmm … with the lender, and then what do you do about property taxes? Yep. And lenders don't like releasing a security interest- No they have in the entire property. No,

Christian: [11:09] we have a, a, a- … we have experience with that.

Katy: [11:12] Yeah.

Christian: [11:12] Yeah. It, it takes- It takes a long time. Yes. It's not fun.

Katy: [11:15] Yes.

Christian: [11:16] Yeah. I've seen… And make sure that your agent is good and actually knows how to read a title report-

Katy: [11:20] Yes … Speaker: because even on one of our projects, the title company sent me the title report, and they were supposed to be split. You'd already done all your job. Yep. So- And they still had- Yes, you- … Speaker: the legal describing the entire parcel, not just the condo. You are in a long line of clients who have told me- Oh my gosh, thank you for telling me to check- Mm-hmm … because title had it wrong.

Christian: [11:39] Yeah.

Katy: [11:39] And there's things you can do to encourage title to get it right. You know, use the condo PSA. Mm-hmm. Um, that should set off alarm bells- Yes, it should … if it's describing, you know, lot 6, block 15 of some old plat in Seattle. Yeah. It doesn't always, though. Mm-hmm. So you just gotta look. And so I really appreciate when my clients, if they don't know, they just send me, they send me what they have, and say, "Will you just make sure this is right?" Yeah.

Christian: [12:00] Just double check for

Katy: [12:00] me. Because the time it takes, I mean, we're talking minutes, to potentially you know- Yeah … save hours and hours of headache and heartache. And

Christian: [12:07] thousands of dollars, probably- Yes. … as well.

Katy: [12:09] Exactly.

Christian: [12:09] Yeah. So other than waiting too long to start the process, or not reading the legal description, what are some other mistakes people are making?

Katy: [12:18] I mean, those are really the main ones. I think one kind of hack that I see a lot that I really, really love-

Christian: [12:25] Mm-hmm … Katy: is when people buy an existing single family that's actually kind of small. Mm-hmm. And you, we have those a lot in Seattle. Yeah. And so if you buy an existing single family that only has 1,000 square feet- Or

Katy: [12:36] smaller you can… Or smaller . Yeah. Yeah, I've seen them at, like, 600 square feet. Yeah. You can have those re-categorized as the DADU- Yep … through the permit process, and then you can build either a new single family, where you don't have those square footage restrictions that you have with accessory dwelling units-

Christian: [12:50] Mm-hmm

Katy: [12:50] or sometimes they build a new single family and attached accessory dwelling unit. Yep. So you get three units out of buying, you know, 1,000-foot square house. Little square, yeah. Yeah.

Christian: [12:58] Yeah.

Katy: [12:58] And I just really love those deals when it works out.

Christian: [13:01] Yeah. And that is a great opportunity, potentially. And it all depends on after you run the numbers. Mm-hmm. Like, we had this exact- exact situation, where we bought a house that was, what, 700 square feet upstairs, and they had another 200 square feet downstairs that was finished, so it was under 1,000 square feet. We ran the numbers on doing that exact same thing- Mm-hmm … and it didn't make sense. It only made sense to build a DADU.

Shannon: [13:24] Because of the neighborhood.

Christian: [13:25] Because of the neighborhood, because of the resale prices of that. But it was a exciting opportunity when we realized that. Yeah. We initially just thought, oh, it's just a DADU lot, that's fine. Yeah. And then we're like, wait, no, you can make the house the DADU- Yeah … and build in the back, and potentially do two units, like

Katy: [13:40] you said. Yeah, and it won't always pencil, I mean, because- Yeah … building plans are going to take longer- Yep … construction is going to take longer- Mm-hmm … so you're going to have additional holding costs. Yep. I mean, sometimes it just doesn't make sense. But when it does- Mm-hmm … it can really pay off.

Christian: [13:52] Exactly.

Shannon: [13:52] And the DADU can be in the front or the back.

Katy: [13:54] Correct. Yes. 'Cause I think a lot of people- The Seattle is not- … Shannon: perceive DADU only in the back.

Christian: [13:58] Mm. Mm-hmm.

Katy: [13:58] And which is how they'll typically permit it new, but if it's an- Yep … existing single family at the front of the lot, they allow it to be non-conforming.

Shannon: [14:05] Mm-hmm.

Christian: [14:06] So cool. Such a good hack. Another hack I wanna bring up that I've seen people do is buying a one to four unit, or I guess potentially even more larger than that, multi-family unit-

Katy: [14:17] Mm-hmm

Christian: [14:17] and then condo-ing off those and reselling those. Can you talk more about that?

Katy: [14:22] Yeah, and this is relatively new. I haven't really seen this up until, like, the past year. But, like, right now I have a client doing this with a 12 or 13 unit apartment building- Hmm … in Enumclaw, and he just really wants to provide affordable housing for first-time buyers. Hmm, hmm. 'Cause his reasoning was, how are you ever going to afford to get into a place initially- Yeah … if you can't afford, you know, six or $700,000? And so I really love that. Yeah. I love providing affordable housing. I love that they're gonna have, you know, these remodeled units that are well-maintained and taken care of, and some great community outdoor space. Mm-hmm. He's putting in a dog park- Oh, cool … a barbecue pit, um- Ooh, cool … it's going to be amazing.

Shannon: [15:01] Yeah.

Katy: [15:01] And we're also looking at doing this to a hotel in Bellevue, potentially. Oh. Um, we have to work with the city to see, like, what's allowed. Yeah. So because these are typically smaller units, they're much more affordable- Mm-hmm and they get people into homes, into owning something when they wouldn't be able to otherwise.

Christian: [15:17] That's super cool.

Shannon: [15:18] Yeah. Hadn't heard about it for hotels. Yeah. That's

Christian: [15:19] interesting. I mean, I've heard about it, like converting a old motel or a hotel into- Mm-hmm … like an apartment, but I never thought about- Yeah making them into condos. It makes a lot of sense, especially when you look at it as an affordable housing- Mm-hmm … route to go. What areas around Seattle- Are you actually allowed to condo off properties, and more importantly, sell them as well? Yes. 'Cause I know you can condo it anywhere. Right. You can, you've literally told me you can condo a mailbox. I c- Like-

Katy: [15:50] I could condo a mailbox.

Christian: [15:52] I don't know why you ever would, but you- I don't know … technically could. But where can you actually- Yes … condo something off and then sell it?

Katy: [15:59] Yeah. Right now, the most common cities are Seattle, Kirkland, um, in Burien. I've also done a couple up in Snohomish, and-

Christian: [16:07] Like, the county or the city?

Katy: [16:09] Both, actually. Okay. Um, you have to be careful up there because they do have rules against it. So the reason my client was able to do it was because he had a non-conforming kinda grandfathered-in lot- Mm-hmm … that had two existing houses on it. But that will all change with the new laws. Mm-hmm. So within the next year or so you'll be able to do this anywhere.

Christian: [16:28] Anywhere in the state.

Katy: [16:29] But currently- But right now,

Shannon: [16:30] Shoreline no, Bellevue no, like-

Katy: [16:32] Sho- Bellevue no. Edmonds no. Bellevue's a hard no. Everett no. Um, Everett you can. Okay. Yes, I just haven't done as many up there, but I have done some.

Christian: [16:41] Is it up there, though, that you have to live in the- the front house? Or I guess maybe not the front house, but the primary

Katy: [16:47] house. They recently changed that. Oh. They got rid of their owner occupancy requirement. Wow. Oh, that's news- Um, yes … to us. And so that's good. I think, I mean, honestly, everyone's just getting ready for the code updates- Yeah Yeah … they have to make anyway. Yep. But they had just updated their bill, I wanna, or their code within the past year.

Christian: [17:00] Hmm. Hmm. Exciting.

Katy: [17:02] Now I'm gonna go look at stuff and

Christian: [17:03] I know. We're always looking for deals. I know. About to jump on

Shannon: [17:06] there and look. Um,

Christian: [17:08] one of the biggest misconceptions, and we hear this a ton when we go to investor meetups- Mm-hmm … or people just ask us questions, is they go, "Hey, I thought you couldn't sell off the main house before you build a condo or build a DADU." Yeah, they think-

Shannon: [17:25] Is that true? … the DADU has to be-

Katy: [17:26] Yes … Speaker: done- Has to be completed before- … in order to sell … you can sell one of the other units. So somebody is out there telling people this. Yes, 'cause it's-

Christian: [17:33] Because- … all

Katy: [17:33] over the place … I hear it all the time. Yeah. Yeah. Like, "I was told you couldn't." And I just say, "I'm- I'm sorry, you were misinformed."

Christian: [17:38] Mm-hmm. Yeah.

Katy: [17:39] Um, I'm sorry if that's impacted you negatively. So to

Christian: [17:40] be clear-

Katy: [17:41] To be clear.

Christian: [17:42] Yes.

Katy: [17:43] Well- Please … I'm an attorney, so I have to caveat- … all of this. So if what you're building is detached units, so just a single family and a DADU-

Christian: [17:52] Mm-hmm … Katy: we can almost certainly record the condo, um, before you, before you've built, before you even have approved plans. Hmm. The whole point is to create a unit that you can build on. Mm-hmm. If it's not buildable, there's not a real point- What's the point? … to doing this. Yeah. Um, so if for some reason we condo it, then you get approved plans, and we're like, "Oh, shoot, it doesn't quite fit in the unit we created"-

Shannon: [18:15] Mm-hmm … Katy: that's okay. But we do need to amend the map. And I like to tell people that, because that might cost a couple thousand dollars depending on what the surveyor charges you. Mm-hmm. It's not a ton of my time. Yeah.

Katy: [18:25] But it's just something to be aware of. For my clients, it's almost always worth it, because they were able to get that separate financing- Mm-hmm get out of their hard money loan. So whatever, you know, a couple thousand dollars just isn't that big of a deal to them.

Christian: [18:36] Yep.

Katy: [18:37] The answer changes when you're talking about attached units. Mm-hmm. Because if you have units that are separated just by a straight party wall- Mm-hmm … and not, not floors, but they just have a dividing wall, then we can record the condo map as long as you have approved plans. Now, nobody's policing this, so I could record the map before you had approved plans, but when you talk about trying to get the unit line exactly where that wall is supposed to be built- Mm … that is a risky move.

Christian: [19:03] That is,

Katy: [19:04] yeah. So I'm not even saying I wouldn't do it, but my client would be very aware of the risks. Yeah. Again, the cost to amend- Mm-hmm … if something went wrong, just so they were aware, but it might be worth it to some people. I have a client right now that wants to do that. His plans are almost approved, but not quite, but he's got that hard money loan.

Shannon: [19:20] Yeah.

Katy: [19:20] Yeah. So and I said, "Yeah, here's the risks. We can do it." Yeah. Only certain surveyors will do that, so you, again, talk to me. I can, I can tell you who to talk to.

Shannon: [19:28] Yeah, yeah.

Katy: [19:29] If you have a unit that's separated by floors, so if the downstairs is going to be one level and, uh, one unit and the upstairs is a different unit, then the structure has to be substantially completed. That is a state code requirement that the survey has to, the surveyor has to be able to say that it was substantially completed, and they looked and measured the elevation so that they know- Mm … exactly where each unit is going to go. Those are not super common, especially- Yeah … not in Seattle. No. So that's almost never a deal breaker for anybody.

Shannon: [19:57] Yep.

Katy: [19:57] But yes, to be clear, we can get a lot condo it without- doing anything, I just think it's smart to at least speak to an architect first- Mm-hmm … so you have an idea of where you would build any additional buildings.

Christian: [20:09] So I'm gonna repeat it- But good, we- … for the third or fourth time now.

Katy: [20:12] Yeah.

Christian: [20:13] You can sell one or, or the other before you actually build-

Katy: [20:19] Yeah a DADU. And so let's say we have that DADU, um, condo, and we record it.

Christian: [20:23] Mm-hmm.

Katy: [20:24] And you have not constructed the DADU yet, you can absolutely sell off the existing single family, even before your plans are approved.

Christian: [20:31] Mm-hmm.

Katy: [20:31] But that all goes back to the risk, 'cause there is a slight risk there- Mm-hmm … that for whatever reason, that DADU won't be approved to fit within the unit we've created for it. Yeah. And if it's not, then we have to amend the map- Yep … which is really easy when you own all the units.

Shannon: [20:44] Yes.

Katy: [20:44] Really hard- As soon as you sell- … when you sell it. As soon as you sell a unit, because if you're speaking about a rectangular lot, and your DADU doesn't fit in the back- Mm-hmm … what you need to do is have some more of that yard that is currently owned by somebody else. Yeah. So you're gonna have to go to them and say, "We need, you know- Yeah … five feet of your backyard. Is that okay with you?"

Christian: [20:59] Yeah. Yeah. Most likely they'll make you pay.

Katy: [21:01] Yes, exactly. Or

Christian: [21:02] say no, potentially, as well.

Katy: [21:03] So, yeah, exactly. Yeah. So typically, I'd say maybe don't sell until you have approved plans.

Christian: [21:09] Mm-hmm.

Katy: [21:09] But again, that has nothing to do with actually constructing something.

Christian: [21:12] Yeah, yeah. And we've actually done this, where- Yeah … we remodeled the front house, started building the DADU. DADU was partially done.

Shannon: [21:20] We- Well, no, we got the condos done before we ever broke ground- Yeah, mm-hmm … on the DADU, because we thought, "Well, let's exit out of this," and we had… You know, we were pretty confident. We had a really big yard. We were confident of where- Mm-hmm … the DADU was gonna go, and that we had enough space to get it done. Just happened that the market, this is when rates went up, the market-

Christian: [21:36] Slowed down … Shannon: turned, and the front house didn't sell, so we pulled it off until the DADU was mostly done, and then put it back on, and it sold. But- Mm-hmm … yeah, when people tell me that it's not possible, I'm like, "Well, I did it." Yeah. So it is. I've done it.

Shannon: [21:47] Yes. So I'm glad we cleared that up once and for all.

Christian: [21:49] Yep.

Shannon: [21:50] As you were saying, there's not a ton of places where you can do these condos and sell them off separate right now. Right now. Mm-hmm. But that's- In

Christian: [21:58] May of 2024.

Shannon: [22:00] But that is about to change. We're- Yes … so excited that that's about to change. So my background is an attorney, too, so I'm stoked to get deep into these laws. Let's talk about them and what the changes are gonna be. So for everybody who doesn't know, these laws passed in Washington State, HB 1110 and 1337, and these are gonna help create more density, and I see 1337 as kind of making sure municipalities don't stop people from- Yes creating the density. That's

Katy: [22:32] exactly what it does.

Shannon: [22:33] Yeah. Yeah. So as somebody who does these and builds these and s- as an investor, there are these roadblocks that can get in your way, whether it's parking, trees-

Christian: [22:41] Impact fees-

Shannon: [22:42] Different- … Speaker: all sorts of things, anything that a city or municipality can throw at the developer to stop them from being able to- Yes actually do what the state wants to have happen. Yes. Correct. So these laws are trying to basically create this density and not allow these municipalities to stop it- Mm-hmm … which, as, is music to our ears- Mm-hmm … 'cause it's just gonna allow us to create more housing, which we desperately need here in Washington- Clearly need, yes State very badly. So- Not

Christian: [23:09] just for affordability, but we have so many people moving- Yeah … here.

Shannon: [23:12] We just don't have enough houses- Don't

Christian: [23:13] have anywhere for them to go … currently. Yeah.

Shannon: [23:15] Yep. Yep. So Christian, do you wanna start with 1110, and then, and then we'll get into the next one- Sure … Speaker: after that. Yeah, so HB 1110. So this is known as the Middle Housing Bill and has already been signed into law by the governor. Washington clearly has a howdy- housing storage problem. Uh, it's projected that the state will need one million new homes in the next 20 years. By 2044, we'll need an additional million- A million? … homes.

Katy: [23:40] That's a lot.

Christian: [23:41] A million. And this bill is a way to help solve this by allowing more density where they typically have only had single family housing, or one house on, on a lot. Can you give us, i- i- kind of the, the elements as a, an investor, but also just for the everyday person, kinda what we should all be paying attention to with- Sure this bill, House Bill 1110?

Katy: [24:05] Yeah. The big thing in this, like you said, is middle housing. Mm-hmm. And middle housing, um, is duplexes, triplexes, fourplexes, fiveplexes, sixplexes, cottage housing, apartment style housing. Hmm. There's, there's nine total. Wow. And so what this bill does is it tells cities you have to pick at least six of those and make them available. So for some reason, a city was like, "We really hate fiveplexes." Well, that's okay. You, you don't have to allow for that. That's

Christian: [24:30] funny.

Katy: [24:31] Um, so it allows for these, um, kind of what were only just multifamily structures to be built in the single family zone- Mm-hmm … so it essentially does away with the single family zone- Yep in most cities, any city within the urban growth area. So I think it's important to note this does not apply to unincorporated counties. Mm-hmm. I get that question a lot. Yep. It does not. Um- That's

Christian: [24:50] a

Katy: [24:50] good

Christian: [24:50] clarification. Yep.

Katy: [24:51] Yeah. And so for clients who are thinking about buying a property now, it's like, well, just think real quick, like currently maybe you can get three units, but if you waited a year, could you get six?

Christian: [25:01] Mm-hmm.

Katy: [25:02] Is that worth it to you to wait? Yeah. You know, it might not be. There might be a few additional maybe environmental considerations that maybe cost a little bit more in developing additional units. Um, but it's something to think about, and it's a conversation to have before you make that decision, I think.

Christian: [25:17] Yeah. I know that the, this is all going to be dependent on the population of the city, how many units you can do. Yes. So it's not a straight blanket, you can now build six houses on one lot that used to only have one house on it.

Katy: [25:33] Right. Um- And so, yeah, the population numbers are based on the 2020 census.

Christian: [25:37] Okay.

Katy: [25:37] I was going to compile a list and then I thought, "Work smarter, not harder." Yeah. And I Googled that. Nice. And Makers Architecture has a fantastic chart broken down which cities are within each tier- Cool … and what their population was in the 2020 census. And, and it's color-coded, I love it. Nice. So if you just Google that, you'll find it.

Christian: [25:54] Can you say it again- Um- … what it is that has it?

Katy: [25:56] Yeah, it's Makers Architecture.

Christian: [25:58] Makers Architecture.

Katy: [25:59] And if you just Google, you know, Bill 1110-

Christian: [26:02] Mm-hmm … Katy: it should come up. Or if, you know, add population or something in there- Mm-hmm … Katy: and you should see it. Cool. But generally speaking, and I wrote this down so I wouldn't forget. Mm-hmm.

Katy: [26:11] If, um, the city has a population between 25 and 75,000, you get two units per residential lot, or you can get four units if one unit is built as affordable housing, and they have very specific requirements. And I think that aspect is actually going to be kind of difficult. Yep. It'd be difficult for them to be built similarly, but to sell one for less. Mm-hmm. Or if it's located within a quarter mile of a transit stop. And what, what defines a transit stop is tricky That was gonna be my next

Christian: [26:38] question.

Katy: [26:39] Yeah So- That's our question … I've asked cities, w- "How are you going to handle this?" Yeah. And they basically said it'll, they'll figure it out and work it out in their code. Hmm. But in the bill, they specify it has to be a stop on a high-capacity transportation system funded or expanded under provisions of a certain RCW, which includes commuter rail stops, stops on a rail or fixed guideway system, or stops on bus rapid transit routes.

Christian: [27:05] Okay, so it's not your regular old corner bus stop.

Katy: [27:07] Not just any old bus stop, no.

Christian: [27:09] Okay, so it's more like a, probably a Park& Ride as well, I assume, would

Katy: [27:13] apply. I assume. I assume,

Christian: [27:14] yeah.

Katy: [27:14] So I think what we'll see is each city defining which- Uh-huh … stops in their city meet- Okay … those criteria. And then I think if we think something different, we'll just have to maybe appeal or apply for some sort of variance. Variance. Yeah.

Christian: [27:27] Yep. Interesting. Hmm. Do we know yet the timing of when this is gonna be rolled out statewide, or city by city, or how all this is gonna kinda pan out?

Katy: [27:39] Yes, but it's a complicated answer. Okay. It's not just like by May or, you know- Yeah, yeah, yeah … 2025. Yep. Um, so what the, um, bill said is that each city within the urban growth area has to do it within six months of their next planned comprehensive code update because all these cities have a schedule of when they update their code. Hmm. So then it just has to be implemented within six months of that. For most places, that's going to be within the next year. Okay. I know Tacoma's, uh, people are very excited about Tacoma. Mm-hmm. Um, that'll be changing this summer. And so I have- Nice … clients with, like, 50 condos ready to go into Tacoma. Wow. Wow. Um, because people have wanted to do condos there for years. Yeah. And so I'm looking- And there's

Christian: [28:17] generally some huge lots down

Katy: [28:19] there- Yes … Speaker: too. For way cheaper than Seattle. Yeah, way cheaper. And obviously, you're not gonna get the resale value- No … you would get in Seattle either. Yeah. But the builders down there are super excited about

Christian: [28:26] this. Yeah, I'm sure. I'm sure. Okay, so probably by this time next year-

Katy: [28:32] Yeah … Speaker: we should have a general idea. I think- So- … May, June, by 2025- Hmm … every city should have it updated and implemented.

Christian: [28:38] Okay.

Shannon: [28:38] Where do we find out, 'cause I've been trying to look at this, how do I find out when these updates happen? Do I have to look at each different municipality and find out-

Katy: [28:49] Yes

Shannon: [28:49] what's going on? So- And what's the best place to find that?

Katy: [28:51] That's a good question. I have that exact same problem, so currently my assistant is working on just compiling a list. Oh, cool. But I told her the same thing, Google it and see if someone else- Yeah … has already done it, 'cause my, my guess is they have. I would just need to check it for accuracy, because I don't necessarily trust other people's numbers, and cities may update when, you know, they're going to have this information available. So I'm working on it. You can contact me if you have a question about a specific city.

Christian: [29:17] Okay.

Shannon: [29:18] Well, that's good to know, 'cause I was- That's gonna be very

Christian: [29:19] helpful

Shannon: [29:19] about to Google all of that- Yeah … and find out myself.

Katy: [29:23] Yeah.

Shannon: [29:23] So I'm excited that you have a plan for that.

Christian: [29:25] Okay. Have any, have any already applied or approved them? Are they already going with these?

Katy: [29:30] Not that I know of. I think Tacoma might be the first. I mean, like I said, Everett did update their code, but I don't think it's incorporated all of 11-10 yet. It just- Got it … changed some things that are affected by 1337, but- Mm-hmm … yeah.

Christian: [29:43] Okay. We'll just keep playing the waiting game and Googling this over and over again.

Shannon: [29:47] Yeah.

Katy: [29:48] Do you, would you recommend… So let's say… Not let's

Shannon: [29:51] say, I am an investor.

Christian: [29:53] Let's say.

Shannon: [29:54] I am. Let's say I do

Christian: [29:55] what I do.

Shannon: [29:55] Let's, let's, let's pretend I have the job I have. Um, would you buy properties knowing… Like, a- as we can look at something and we'll go, "Okay, I know you could probably fit this many units based on access- Mm-hmm … based on where," you know. Would you, would you buy them and hold them and wait?

Katy: [30:13] I think that varies so much by each individual project. I mean, and how much time and money the investor wants to spend on that specific lot. It might not pencil if they have to hold it for a year. But if it's already constructed, then they can rent it out until the time comes to maybe redevelop it, then maybe. I just think people need to have someone that they're talking to. There are people that are really good at this. I know you guys are a great resource for so many people. And so I would say don't guess. Yeah. If this isn't your area, reach out to somebody who knows, and talk through all the numbers to make sure you're just looking at it from… and you have a full picture.

Christian: [30:46] Always gotta run the numbers. Always.

Shannon: [30:48] Yes. But, but I think a lot of people are trying to get ahead, right? Totally. 'Cause these, these properties right now, let's say, like Edmunds, it's not valued- Mm-hmm … in the same way a yard is valued in Seattle. Facts. Mm-hmm. I've seen wholesalers recently, they sent us a deal the other day, and it had a DADU potential in the yard, and they increased the value by 200,000, simply because you get this- Mm-hmm DADU lot. Mm-hmm. Which when you actually ran the numbers, it was like, I might as well just flip this house. Yeah. This doesn't make any sense. But these lots are getting so valued in Seattle, 'cause a lot of people- Mm-hmm … wanna do- Mm-hmm … this investment strategy. Whereas in places like Edmunds or Everett or-

Christian: [31:24] Tacoma

Shannon: [31:25] you, you name it- Yeah, wherever, yeah … people are not valuing the lots that way because currently you can't do it. So I think people are thinking that they could purchase things while the value is still low or not-

Katy: [31:36] Yes … Shannon: known to everyone. I would say I definitely have clients doing that. And like I said, Tacoma is just a big one. Yep. People have wanted to condo there for so long. I can't tell you how many clients I've turned down, just, "Sorry, that's not allowed." Um, and not just Tacoma, but like University Place, you know- Yep. Mm-hmm … kind of all tho- those little areas down there. The

Christian: [31:52] South Sound.

Katy: [31:52] Yes. Yes. People are very excited, and if y- they only want to do a single family in a DADU, you can do that now. Mm-hmm. I mean, buy those lots, get building. Even if we can't sell them quite yet- Mm-hmm … we're very close in Tacoma. And so- You know, I think that, that's a different question than if you're thinking, "Oh, maybe I could get six units," you know?

Christian: [32:12] Yeah.

Katy: [32:13] Totally. Um. Yep. So.

Christian: [32:14] Yeah.

Katy: [32:15] Yep.

Christian: [32:15] And I think this- That makes sense I'm actually just, as a human, I'm excited for this density to take place, not just as a developer and investor trying to make money. I think it's gonna be so great for our state to allow and have so much more affordable housing that will get added because of this, and some of it is not gonna be very affordable. Like, a DADU- Mm-hmm … in Seattle, $800,000. That's not super affordable.

Katy: [32:41] It's not, but it's brand-new construction- But it's brand new … in downtown Seattle. Yeah. You can't get that any other way. Exactly. Exactly. And so especially for, like, a detached standalone house where you have a yard- Yeah … you might have a parking stall. Yep. And- Mm-hmm … I just think it's amazing. Yeah. You can't get that any other way.

Christian: [32:55] Exactly. So I'm excited to see how this all plays out, and I do think there's gonna be a lot more affordable ways for, that people can actually own real estate, which people are clamoring for. Yes. They need it, and there's also a lot of developers that are gonna take advantage of this and have some affordable rentals available. Yes. More, more inventory there, which we also clearly need, so it's

Shannon: [33:14] gonna be exciting. I agree. One question I have before we get into the next law is kind of how these… And I, I genuinely don't understand this, and maybe you can explain it to me, but how these laws, they kind of coordinate with each other because this 1337 says you can put two ADUs. Mm-hmm. But the other law also says- 110 … you can have more dense… Uh, where's-

Christian: [33:37] Our, our guess, and we were talking- Why are they both it- … about this previously, like, was it all politics? Like, they didn't get it in one bill, so they threw it in the other? Or

Shannon: [33:44] is there some differentiation- Do you know any of this? Yeah … that we're not understanding?

Katy: [33:47] Yeah, I mean, I think sometimes just with the size of the lot, it doesn't matter if it, if you could get four units or six units. It's just not big enough. Yeah. And that might not be what you want. You might not want to build, like, a multifamily building. Mm-hmm. You might want two detached units or, you know, three detached units- Mm-hmm um, that all standalone separately. So I think it just offers more flexibility. It's not like one trumps the other. They're all going to be implemented in every city, and you'll just have to look at that specific city to see what you can get approved. You know, speak with an architect who can do the FAR calculations- Yep and will be- Mm-hmm … able to advise on specific lots.

Shannon: [34:24] Yes, always. We love our architects. We talk to them-

Christian: [34:27] Mm-hmm … Shannon: almost weekly. A lot, yeah. " Shannon: Hey, will you look at this? We might buy this." Yes. "We wanna make sure that you agree." "Can you look at this real quick?" "We think it's fine." But we wanna make sure you agree. Well, and- Um … and as investors and developers, we're learning so much just having those conversations- Mm-hmm … with architects as well, trying to be creative, and we start to see more opportunities. Mm-hmm. And with these two new bills being passed, there is so much opportunity out there. For

Katy: [34:51] sure.

Christian: [34:51] Yeah. For those that are looking for it and that are prepared, so good job listening, whoever you are, 'cause you're learning a lot, and you're probably gonna know more than the majority of people out there.

Katy: [34:59] Um- And then, oh, one thing I wanted to add was- Yeah … we kinda only talked about option one- Mm … which was for cities between 25 and 75,000. Yeah. And that was the two or four units. Mm-hmm. Quickly, I'd like to add that for cities with over 75,000 people, you can get four units or six if you meet- Yeah … you know, the affordable housing or transit stop criteria. So,

Christian: [35:19] yeah,

Katy: [35:20] I mean- That's gonna be

Christian: [35:20] huge.

Katy: [35:20] That's so big.

Christian: [35:21] Yeah.

Katy: [35:21] Yeah. If you have- Deep … I mean, six units in Seattle would be-

Christian: [35:25] Yeah … insane. Crazy. That really would be insane. Yeah. And it's gonna change some neighborhoods, and-

Katy: [35:29] Yes … Speaker: and I think the reason that… Is it HB 1337 that they added this? Shannen's the one that studied that one a lot more than me- Mm-hmm so that's why I'm asking her. Is that the reason why they, they put all those- S- ways to stop developers from doing this stuff. Is that why-

Shannon: [35:45] Ways to allow them to do it. Yeah, yeah. Yeah. I think, I think a lot… Any time you have changes, everybody says, "Oh, we want density- Mm-hmm … we want more affordable housing, we want more options."

Christian: [35:53] Not in my backyard.

Shannon: [35:54] Yeah, exactly. Well- They're like, "But not here."

Christian: [35:57] Yeah.

Katy: [35:57] Yeah. Yeah, somewhere else. And that's a huge, that's a huge reason why, the only reason really why we don't do condos in all these other cities- Mm-hmm … because cities' codes have language that says either you even can't record a condo on this- Mm. Mm … but mostly what they say is they prohibit the single family being owned separately from the DADU. Yep. And if you can't sell them separately, that- Yeah … defeats the purpose- Exactly … um, for the most part. So that's what, I think that's a main component of 1337 and what it will allow moving forward.

Christian: [36:25] Yeah.

Shannon: [36:26] Uh, one other way these laws interact that I wanted to touch base on is who supersedes who. So we have- Mm … zoning, and then we have these laws, and then we also have CC&Rs, or covenants in certain neighborhoods. Mm-hmm. Who's the winner here?

Katy: [36:41] That's a fantastic question. So I've actually spoken with the drafters of these bills, and, um, they wanted, you know, one of them has a background in property management, and we don't often get, like, a real estate guy- Yeah you know, in the house. And so, and he said he's kind of like a lone wolf out there. I'm sure he is, yeah. But he wanted this to apply to all the old underlying covenants. Mm-hmm. So for example, a lot of the plats in Kirkland have these- Mm-hmm … old CC&Rs from the '50s and '60s that say on any lot you can only have a detached single family house. You can't build anything else. And s- because that doesn't conflict with the city of Kirkland's code, you could go into Kirkland and apply for a permit and build a house, and Kirkland would allow it, because they're not going to enforce a private covenant. Mm. Kirkland is only bound by the state law, and you know how that restricts them, and their own city code. But what could happen, if your neighbor knows about that restriction- Uh-huh … and doesn't want you to add density to their neighborhood, they can hire an attorney- Tell you to knock it off or they can sue you. Mm-hmm. And they'll win because this is on title. Yeah. So my advice to everyone before you do anything, send me your title report so I can review it, because it can be financially devastating. I had a client buy nearly $80 million worth of property in Kirkland, before they were my clients. And Their attorney didn't tell them about these title restrictions. Wow. Oh. 75% of the properties they bought had them.

Christian: [38:01] Ugh.

Katy: [38:01] And then they fired that attorney and some- someone said, "Call Katy," and oh man, I felt so bad for them. Wow. But we're working through it, you know. On some of them we've had amendments recorded. You just get 50% of the, or more of the neighbors to sign- Mm-hmm … and we can have that, that restriction removed. But to answer your question, I mean, obviously state law trumps. That's why these cities are forced to follow these new bills. And then there's the city code. But so far the state has kind of not said, "We're gonna force citizens to, you know, change their, what they agree to privately." Mm-hmm. And so even though those are really old, they still see them as private covenants, and people are allowed to contract how they want. And- Yeah but I have heard there are other bills coming down the pipeline that will-

Christian: [38:46] potentially

Katy: [38:47] Potentially supersede those if they get- Mm-hmm … if they get passed.

Christian: [38:51] Mm-hmm.

Katy: [38:51] Some people are very against that, though.

Christian: [38:52] Yeah. So. 'Cause I know there's some neighborhoods that are generally a little bit nicer-off neighborhoods.

Katy: [38:57] Yes.

Christian: [38:58] And they have their own CC&Rs that will supersede these new bills that are coming out currently, and well, that are currently in place.

Shannon: [39:06] Right. I'll be curious to see after these, you know, years down the line, five, 10 years, if there's more density- Mm-hmm … if those covenants still hold. I feel like the value of those properties might even increase more, because they're… You know you're gonna have this extra space. Right. And there's no way that the neighborhood can change- Mm-hmm … or anything like that. So I, I'm- Mm-hmm … interested to see how that plays out-

Christian: [39:26] Yeah … Shannon: like, long-term on the value of those- Mm-hmm … um, that do hold those covenants.

Katy: [39:30] Me too, and I think if there's ever a law that tries to kind of make those, um, you know, not useful anymore- Mm-hmm we're gonna see so many lawsuits. Oh, yeah. So many lawsuits. Mm-hmm. People in those neighborhoods don't mind, um, attorney fees, and so- Yes, exactly Right … they will sue.

Shannon: [39:44] Yep, yep. Okay, so let's get into the details of 1337. As we talked about, the other law kinda creates this density, and I feel like 1337 is the key to opening the door and letting the investors actually do what they wanna do on these lots- Mm-hmm and saying- Yes … "Hey, municipalities, you can't prevent them from actually creating this density." So it has things in there like lowering impact fees, creating less street improvements that are required. The occupancy requirement, that's a big one right now- Mm-hmm … in a lot of areas where you c- you have to own the DADU and the house, the same person. So you can't sell these off separate, so this will prevent things like that.

Christian: [40:20] Or if you wanna sell off the DADU, you have to live in the other house on the property. Correct.

Shannon: [40:24] Yeah. Yeah. So Kate, will you tell us more about w- how this is gonna help investors? Yes.

Katy: [40:29] So the, one of my favorite things about this bill, I have two. One is it allows for three acce- or three units total, so two accessory dwelling units, plus a single family in every jurisdiction. Mm. Um, and it raises the minimum square footage to 1,000 square feet, so a lot of jurisdictions right now, you can only have one, and their cap might be 600 square feet- Yeah or 800 square feet. Mm-hmm. Or 800, yeah. Yeah, that's huge. So, um, this kind of brings everyone up to where Seattle got two years ago. Yep. And I think that will be fantastic, and I also love that you can choose either two detached or two attached or one of each. Mm-hmm. Um, because currently in Seattle, you typically can't have, you know, two detached accessory dwelling units- Oh, got it in a single family zone. Yep. But if you have the space for it, I think a lot of people would choose that over making one attached, and so I think that's going to be, um, fantastic. And then obviously, it doesn't prohibit condo-ing them, which is kind of the key to making- Yes … this investor-friendly.

Shannon: [41:20] Yes. Yep. Absolutely. And that's where you

Christian: [41:21] come in.

Katy: [41:22] Yeah.

Shannon: [41:23] Exactly. Oh, that's so great. Yeah, I was, I was going to ask about that- Mm … because in Seattle, you can only have… So if you have a single family house, you can have an attached ADU and a detached ADU. You cannot build two, like, DADUs, for instance. Even if you have the space and you have the access and you have all the things, they don't care. Mm-hmm. You can't do it. So this allows you to do any combo you want.

Katy: [41:43] Yes.

Shannon: [41:44] Okay. That's amazing. That will open a lot of doors for a lot more-

Katy: [41:47] Yes … Shannon: development because those detached sell better- Yes … Shannon: for those of you who don't know. Yep. They

Shannon: [41:53] do. So it encourages the people who build them to build, i- yeah, if it's gonna sell for higher, you're gonna build that. So this, speaking of the different units, this bill mentions principle unit Does this mean the sing- the original single family?

Katy: [42:07] Well, it means a single family unit. So typically, yes, what they're probably referring to is the existing house. But like we were talking about before, you can often have that re-categorized as an accessory dwelling unit through the permit process if it meets the requirements. Mm-hmm. And so then the principal unit would change to whatever your new single family is.

Christian: [42:25] Yeah. Got it. Similar to how we were talking about with one of our projects where the, the principal unit was the original house that was there. It was under 1,000 square feet. We could have made that the accessory dwelling unit-

Shannon: [42:37] Correct

Christian: [42:38] and still, or DADU really, and built another unit or two behind it. Yes. So yeah.

Shannon: [42:44] Amazing. Yeah. Well, I am so excited about this. Yeah. I… When I read this, 'cause I'd seen it before, but then it- preparing for talking to you, I read it again, and when I saw all these details of what you can actually do, like limiting height restrictions- Mm-hmm making sure those are good, making… It's, lock coverage.

Christian: [43:01] Yeah.

Shannon: [43:01] What is that gonna look like? I know. I mean, do we have any insight in that one?

Katy: [43:05] No. I'm- I haven't heard anything either … I'm actually curious also. But they did throw in really developer-friendly things in there, and you don't always have a parking requirement. Mm-hmm. You know, the setback from the alley can be reduced to nothing, so you can build- Mm-hmm … right on the alley line. Which you

Christian: [43:20] can already do in

Katy: [43:20] Seattle-

Christian: [43:21] Yeah … but not in other municipalities I

Shannon: [43:22] saw, I saw tree retention.

Christian: [43:23] Yeah.

Katy: [43:24] Yeah, which can be such a big deal for people. Yes. That can be a game changer. Um, yeah, the impact fees. I mean, because what we saw after Wakiwa Pass is different cities coming out with restrictions that would almost punish a developer- Mm-hmm, totally … for recording a condo or trying to build or do anything. Yep. And so I feel like this bill foresaw a lot of things that, you know, cities may do, and said, "Oh, no, you can't actually do that." Yep, yep. "We're just gonna, we're gonna clarify it from the beginning." So it'll be interesting to see how cities interpret this and how they-

Shannon: [43:53] Mm-hmm … Katy: how they implement it.

Christian: [43:55] Yeah.

Shannon: [43:56] I, I did see there are some things that it said specifically, like, "We are not doing these."

Katy: [44:01] Yes. Yeah. Do you wanna talk about

Shannon: [44:02] those?

Katy: [44:02] So I… A big one of that is we're not saying you can't have a restriction on short-term rentals, and, um, a lot of, you know, my clients don't like to include a restriction on short-term rentals if it's, like, kind of your basic investor property where you're gonna build it and sell it. So what that's saying is if the city wants to include a restriction that says you can't Airbnb this, they can. It doesn't, it doesn't prevent that.

Christian: [44:26] Mm-hmm. Got it.

Shannon: [44:26] Yeah.

Christian: [44:27] That's a big one.

Shannon: [44:27] And then also, like, ECAs, sewer, things like that, which-

Katy: [44:31] Yep … Shannon: I mean, that makes sense why they couldn't- Right, yeah … Shannon: get rid of those requirements … Katy: you have to be connected to you have to be connected-

Shannon: [44:36] Yeah … to sewer. Yeah, kind of important.

Katy: [44:37] Yeah.

Christian: [44:38] Unless you're on septic already, but yeah. Yeah. Which that would be tough to do. Yeah. I mean, that's gonna be a big thing statewide. Septic systems, they take a lot of space. Yes. And that's gonna be interesting to see how that plays into this and- Mm … what density you're even gonna be able to do- Yes when you have that in place. I always like to ask people that talk to and work with tons of different investors- kind of what they see everyone doing before it's actually really become public. Mm-hmm. So what are some of the opportunities that you see people doing that maybe not everyone sees yet or knows about yet?

Katy: [45:14] Um, I think we've talked about them a lot. I think people are very excited about Tacoma.

Christian: [45:18] Yeah.

Katy: [45:19] Like, it's just been an area people have wanted to develop for so long. Yep. Um, same with a lot of cities on the east side. Mm. And it'll be very interesting to see how those neighborhoods react, but- I think they're gonna be pissed Redmond, Woodinville- … Bellevue. That's what I think. So it'll be interesting to see how those play out. I think we touch on it also with the, like, already multifamily housing and turning apartments into condos- Yep … and creating more of that affordable housing, I mean, with existing- Mm … buildings, I think is kind of- Mm-hmm amazing, too. Yep. So I really see that's where we're headed. I feel like the growth we've seen in Seattle just over the past, you know, six years or so, we're going to start to see replicated in other cities as well.

Shannon: [45:57] Absolutely.

Christian: [45:58] Shannon, you have any last-minute questions before we wrap up?

Shannon: [46:02] No, I don't think I have anything else. I think you covered everything. Yeah. And I'm now really excited to go- … Speaker: look for properties Katie, anything that we didn't go over that you would like people to make sure they know?

Katy: [46:11] I think in the very beginning, Shannon asked me about time, how long does a condo take- Mm-hmm … and I don't think we touched on that. I generally tell people two to three months, which is important to keep in mind- Yeah … when you come to me last minute and you want it done in a week.

Christian: [46:25] Yeah.

Katy: [46:25] Not saying I can't do it, but generally the surveyor can't do it. Yeah. And so that, that ends up being the big issue. So- It's

Christian: [46:30] a lot of moving pieces involved with it. It's not just you- Right … there's other people as well that have to get on

Katy: [46:36] board and- Exactly. I keep room in my schedule. If a client calls me and they're like, "I am so sorry," I'm like, "Yeah, I'll get it to you tomorrow." Yeah. Um, you know, uh, I can get it done. I can't speak for surveyors, though. Yep. Mm-hmm. And it's much more involved. You know, they might have to do a site visit, they might have to get the CAD files from the architect, and do all these things. Mm-hmm. So it's just not as simple. So I just, I always say contact me. If you're not sure, it's better sooner than later, because worst-case scenario, I say, "Oh yeah, just call me again in, you know, however many months." Yep. But I think that's a very important consideration.

Christian: [47:05] If people do want to hire you, as they should- … what is the best way that they can get ahold of you?

Katy: [47:12] You can call me, you can email me. Like you said, I'm at Dimension Law Group, so we have- Mm-hmm … a website that has all of our contact info on it. Perfect. And that's the best way. Perfect. I'm pretty responsive to emails.

Christian: [47:21] So Google The Dimension Law Group based out of Tukwila, is that correct? Correct. Yeah. So I've been to the office. I was trying to remember where it was, but yeah, super easy to get to if you actually needed to get there.

Katy: [47:32] Right. Yeah, which- Yeah, I mean, I don't ever go there, but- Yeah I'm sure some people do.

Christian: [47:36] I don't go to our office, either. Well, thank you so much, Katie, for your time today, sharing all of your expertise. I think, and I know, everyone is gonna get a ton out of this. I learned so much. I know that we learned even more than we already do. Mm-hmm. And we have a lot of knowledge about this already, and this is… There's still so much to learn, though, too. Yes. And there's gonna be more, and more, and more as all these cities implement their own rules and regulations. Yeah. So maybe- Maybe we have to

Shannon: [48:04] do a

Christian: [48:04] follow-up. Yeah. I was gonna say. That's what I

Katy: [48:05] was gonna

Christian: [48:05] say. I know.

Katy: [48:05] Once we have answers. In a year, we should, yeah- Yeah touch base again, see how everything's changed.

Christian: [48:09] Yeah. Yeah. It's gonna be so fun to see- Mm … how this all lays, or plays out. And we're all

Shannon: [48:13] gonna study populations now. Yeah.

Christian: [48:15] Yeah. It's

Shannon: [48:15] gonna be, that's the new homework, everyone.

Christian: [48:17] Yeah. Yes, exactly.

Katy: [48:18] Yeah, Makers Architecture.

Christian: [48:20] They- Makers Architecture … have a great chart. Yeah. Google their chart. Yeah. See what the populations are, 'cause it's based off 2020 census-

Katy: [48:25] Yes … Speaker: info. I wonder when that's gonna change again.

Shannon: [48:28] Hmm.

Katy: [48:29] I don't know. That's a good question ' Speaker: Cause I'm sure there's some cities that are right on the edge- Mm-hmm … and that are probably at this point- Well, and the, yes, the chart from Makers has follow-up kind of population information, so you see some of them- Aha have already grown.

Christian: [48:41] Mm. Yeah.

Katy: [48:41] Yeah.

Christian: [48:42] So I could see these, when the rules change again or when the census comes out again, maybe that changes in the future. Yeah.

Katy: [48:48] We'll see.

Christian: [48:49] Interesting. Well- Thank

Katy: [48:50] you, Katie.

Christian: [48:50] Yes, thank you again- Yeah. Thank you for having me … so much for your time. And we'll see you now next time here on the Awesome in Seattle podcast.