ADUs: Are they right for you?

Over the last several years, homeowners have increasingly modified single-family homes to include accessory dwelling units (ADUs).

What is an ADU?

An ADU is a self-contained living space either within an existing single-family home or on the same property (detached accessory dwelling unit – DADU).

An ADU/DADU is smaller in size than the primary residence and must have its own entrance, a full kitchen and bath, and living and sleeping space.

In 2023, Washington State passed HB 1337, which requires cities such as Mercer Island to do the following:

Allow two ADUs per residential lot, including attached, detached or a combination of both, or conversion of existing structures
Allow an ADU of at least 1,000 square feet
Collect no more than 50 percent of the impact fees charged for the principal unit
Not require owner occupancy for rentals, unless the ADU property is a short-term rental
Allow the sale of the ADU as an independent unit
Relax parking requirements in some areas

In May of 2025, Mercer Island City Council adopted interim guidelines for ADUs. The city intends to hear public input about the new guidelines and adopt final regulations by 2026.

Is an ADU right for you?

Benefits:

Allows for multi-generational living arrangements
Rental income potential
Potential increase in property value
Homeownership potential for those otherwise priced out of the housing market

Things to consider:

Cost to add an ADU
Building codes and zoning requirements still apply
Private property CC&R’s may preclude ADU construction in some neighborhoods.
Getting a permit is an imperative!

To offset costs, remember:

▪ Homeowners may benefit from the three-year property tax exemption – Property owners may apply for a three-year property tax exemption for the value of the new construction through the King County Assessor Office.

▪ Homeowners may choose to sell an ADU independently of a principal unit – State law allows property owners to condominiumize their ADUs and sell them to another owner.

▪ Senior citizens may benefit from property tax exemptions for their homes and an ADU – Senior citizens can receive a property tax exemption not only for their homes, but also for an ADU added to their property.

To learn more about ADUs on Mercer Island, check out the city website at www.letstalk.mercergov.org/middle-housing-adus or contact the Conway Florence team at timc@johnlscott.com or www.conwayflorence.com/contact.

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