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Breakthroughs: Successful Local Strategies for Affordable Housing

January 2008
Volume 7, Issue 1

Cutting Costs with Cottage Housing

Single-family housing development in King County, Washington.
Cottage homes are not a new concept; they have historically served as working-class housing throughout Europe and the U.S., and are now being updated and reintroduced as an affordable alternative for a new generation of American families. Cottage developments are built in clusters designed to trade quantity of space for quality of life, while actively promoting a sense of community. This article describes cottage design features and provides examples of communities that have successfully implemented cottage zoning.

Cottage Design Features

Although cottage development standards vary by location, cottages are generally designed as one- or two-story detached housing units, with second stories usually built into the pitch of the roof. Small cottages can have 450 square feet on the main level and a 100 square foot loft on the second. A larger cottage can have up to 1,000 square feet to accommodate 2 bedrooms and 1.5 baths. Since cottages are meant to be moderately-sized, most cities limit each unit to approximately 800 to 1,000 square feet.

Cottages are often clustered around a common open space, and depending on the lot size, can have anywhere from 4 to 20 units per development. Lot sizes differ by location, but can start at 1,600 square feet per cottage. In comparison, the national median lot size is 15,681 square feet. Small cottages also allow developers to build a number of cottage units on vacant lots within existing single-family neighborhoods. Because the units are smaller, and are targeted to singles, married couples, and empty nesters, parking requirements are also reduced. This often allows parking spaces to be provided in clusters and concealed from street view; an approach that also helps reduce housing costs.

Although new cottage housing developments could be good sources of affordable housing throughout the country, thus far, they have only gained prominence in the Pacific Northwest. The city of Seattle, Washington was one of the first to implement a cottage housing development code in 1995, with other Washington cities soon following suit by adopting cottage development standards of their own.

Cottage Housing Development Codes

Seattle, Washington

The city of Seattle’s Residential Small Lot zone allows cottages up to 975 square feet without special approvals. One cottage unit is permitted per every 1,600 square feet, but the lot size must have a minimum of 6,400 square feet (minimum of 4 units). In addition, 400 square feet of open space is required per unit, 200 of which must be private. The city requires only one parking space per unit and limits the maximum number of cottage units to 12 per development.

Port Townshed, Washington

The Port Townshed Cottage Housing Development Design Standards, adopted in 2004, encourage affordability, innovation, and a variety of housing types in order to meet the needs of a diverse population. Fifty percent of units in cottage housing developments may not exceed a ground floor area of 650 square feet, with the remaining units limited to 800 square feet. The density varies depending on the underlying zone and the size of the lot in which the cottage development will be located. Each development is required to have a minimum of 4 and maximum of 14 units per project, with lot sizes ranging from 2,857 to 5,000 square feet per unit. Design standards also require 400 square feet of common open space per unit and 200 square feet of usable, private open space. The 1.25 parking spaces required per unit are designed to minimize the visibility of off-street parking from the street.

Spokane, Washington

The city of Spokane’s Cottage Housing code is meant to support diverse housing choices within existing neighborhoods. Adopted in 2006, the code allows a minimum of 6 cottages that do not exceed 1,000 square feet on a 21,780 square foot lot. Cottage developments receive a 20 percent density bonus, depending on the minimum lot size of the underlying zone, but cannot exceed 12 cottage units per development. Each cottage also requires 250 square feet of private and common open space.

The Cottage Movement

Based on the success of cottage housing developments in Washington State, a developer in Massachusetts will soon seek approval for cottage housing under the state’s affordable housing law. Known as 40B, the law allows developers to bypass local zoning regulations in communities where less than 10 percent of the housing stock is affordable. The developer hopes to build these affordable homes to serve as an example of the high-quality design that can be achieved with cottage housing, and so that other communities will become more accepting of them in the future. The cottages, which would sell for between $125,000 and $147,000, will be proposed for construction in the West Bridgewater and Easton communities south of Boston. The cities have median home prices of $310,000 and $370,000, respectively, and have yet to meet the state’s affordable housing requirement.


The US has experienced a shift in demographics where the majority of households are now one- or two-person households. This change has prompted some of Washington’s local governments to address the need for smaller housing while making good use of vacant land within existing single-family neighborhoods. As a result, cities are breaking down housing barriers and reducing the costs of new development. The success of cottage housing developments in the Pacific Northwest has already sparked the interest of developers in other regions. With well-designed cottage zoning codes and developments already in place, it’s only a matter of time before other cities follow suit.


California Promotes Affordable Housing

California townhouses.

For the past several years, inflated housing prices have limited the prospects of many middle class American families wishing to purchase a home. In California, the housing market continues to soften, but the state remains a desirable place to live with housing still in high demand. In response, California state officials are seeking ways to increase the affordability of the housing supply. This article discusses three California state laws that assist localities in achieving their fair share of affordable housing, overcoming community resistance to affordable housing development, and providing guidelines to make more land available for residential growth.

California’s Housing Element Law

The Housing Element Law of California was first enacted in 1969 and requires localities within the state to include a housing section as a part of their Comprehensive Plan. The housing element calls on each jurisdiction to take inventory of existing housing units and to establish a projected housing need for the future. To ensure that each city can accommodate a growing population, the law requires that a sufficient amount of land be zoned for residential development and encourages development of a wide-range of housing choices.

To comply with the law, localities must complete a site inventory and analysis (a detailed account of the zoning within their jurisdiction) to ensure that enough land is zoned residentially at densities suitable for meeting their fair share of the housing requirement. Localities must also provide the state with an analysis of their progress and projected goals for their housing supply. One recent amendment, Assembly Bill 2634, was passed in 2006 and requires localities to plan for housing that will be available to extremely low-income households. In addition, the site inventory and analysis must include different household income levels to be taken into account when areas are zoned for residential uses.

California’s Housing Accountability Law

California’s Housing Accountability Law, previously known as the Anti-NIMBY law, was passed in 1991 to support housing development. While the Housing Element Law requires cities to plan for housing, the Housing Accountability Law ensures that communities do not arbitrarily deny approval of affordable housing projects. Localities are also prohibited from enacting regulations that will impede development or result in an unworkable project. The law allows denial of a project if written explanations or documentation of certain findings are presented, such as significant health or safety problems, or a concentration of low-income households.

Amendments to the Housing Accountability Law include Senate Bill 575, passed in 2005, which requires more scrutiny for denying affordable housing projects. For example, affordable housing projects can be denied if they are surrounded by land uses other than residential, such as agricultural or industrial, or if the development will be inconsistent with comprehensive plans that are in compliance with state requirements for housing needs. However, this amendment does not permit an affordable housing project to be denied based solely on the citation of inconsistent zoning. A community may try to claim that a development is inappropriately zoned if the community feels it does not comply with the area’s zoning requirements. However, if a project is proposed in an area that is zoned for residential purposes, the project must be allowed if there is an insufficient amount of land available for affordable housing.

AB 2511 – An Omnibus Land Use and Housing Bill

Assembly Bill 2511 was passed in 2006 and includes a package of amendments that makes improvements to several of California’s land use and housing laws. The bill prohibits localities from enacting any law that is discriminatory, thus broadening the state code regarding discrimination in land use and zoning regulations. The bill also revises the No Net Loss Law, which limits a locality’s ability to reduce densities in multifamily zones or arbitrarily deny housing project approvals. These revisions bring the No Net Loss Law into better conformity with recent housing element changes. Furthermore, AB 2511 revised requirements of the Permit Streamlining Act to allow more flexibility in the number of affordable units a project must have to qualify for streamlined permitting. In addition, changes to local review processes cannot be applied to projects that have already begun the approval process.


California state officials appreciate the need to increase development of affordable housing to better meet the demand for housing in that state. They have enacted innovative legislation that gives localities the tools they need to make more land available for residential construction and to ease affordable housing project approvals. The Housing Element and Housing Accountability Laws are unique in the ways that they accomplish these goals, in that they assist localities in supporting and approving affordable housing construction, even when faced with community opposition.

Supporting Affordable Housing through Trust Funds

Man carrying a window up a ladder.
The first housing trust funds were established in the mid-1970s; today, there are over 500 funds in cities, counties, and states throughout the country. These funds generate more than $1.6 billion per year, and play a critical role in developing and maintaining affordable housing.

How They Work

Housing trust funds (HTFs) are established by elected government entities that have made a commitment to make safe and decent affordable housing a top priority in their jurisdictions. The funds generate public revenue that supports affordable housing programs and maintenance. The revenue that’s generated by HTFs can also be used to construct housing developments that include housing units for lower-income households. The funds are also used for homebuyer assistance and subsidized rental housing.

A city, county, or state government entity adopts a housing trust fund by law or ordinance according to local need, and details the type of housing and revenue the funds are expected to generate. At the state level, housing trust fund legislation can enable local jurisdictions to dedicate public funds to affordable housing, or provide funding to nonprofit and for-profit housing organizations and housing authorities. There are currently 49 state housing trust funds operating in 38 states. The most common source of revenue for state funds is the real estate transfer tax. Allocated funds are administered by a state housing finance agency, an appointed commission, or a state agency.

When comparing the three types of housing trust fund governing agencies, county housing trust funds have the most difficulty in raising sufficient resources to maintain an effective fund. However, having to rely on their creativity, counties focus on regional affordable housing efforts and also encourage the private sector to become involved in housing issues. There are currently 33 housing trust funds operating at the county level, with county recording fees serving as their main source of revenue.

The largest group of housing trust funds operates at the city level. As of this writing, there are a total of 432 city housing trust funds, the majority of which are administered by a local government department. At the city level, there are a wide range of revenue sources, the most common being developer fees. Other sources include:

  • Real estate taxes or fees;
  • Developer fees, including in-lieu fees and impact fees;
  • Property taxes and sales taxes;
  • Development fees, including permit application fees; and
  • Tax increment funds from redevelopment project areas.


The dramatic increase of affordable housing trust funds in recent years proves that it is a sustainable model. In continuing to make measurable contributions in support of affordable housing, trust funds have established themselves as a viable affordable housing solution.

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