Washington HB 1337 and Your Pierce County Property
HB 1337 significantly expands what you can do with a residential lot in Tacoma and Pierce County in 2026 by generally allowing up to two accessory dwelling units (ADUs), easing owner-occupancy and parking rules, and opening new rental and equity-building opportunities. The actual potential on your lot still depends on zoning, setbacks, utilities, septic capacity, and site-specific constraints.
What Does HB 1337 Really Mean for Your Lot in 2026?
HB 1337 is about fitting more housing on existing residential land while respecting local zoning and physical limits. An accessory dwelling unit, or ADU, is a smaller secondary home on the same lot as a primary house. A detached accessory dwelling unit, or DADU, is a separate small home in the backyard or side yard.
For owners in Tacoma, University Place, Lakewood, and the rest of Pierce County, that distinction matters. A DADU gives you a fully independent small house with its own entrance, privacy, and rental potential. HB 1337 turns that from a maybe into a realistic option on many more properties, especially where you can now consider up to two units instead of just one.
The three biggest opportunities are:
More units per lot, up to two ADUs in many zones
The ability in some cases to condo and sell a DADU separately
Stronger rental cash flow and flexibility for families and investors
From a financial standpoint, even one well-designed DADU in Tacoma can generate meaningful income. For example, the U.S. Census Bureau’s American Community Survey reported a median gross rent of about $1,500 per month in Tacoma in recent years, and small, new units often track near or above that depending on neighborhood and finish level. Turning a single-family lot into a small two- or three-unit property can materially change your long-term return on the land.
What Does Washington State HB 1337 Newly Allow?
HB 1337 requires many Washington cities and counties to allow at least two ADUs on most residential lots that already have a single-family home. Those can be:
One attached ADU and one DADU
Two attached ADUs in some configurations
In some cases, two DADUs if local code allows
The law also:
Greatly limits owner-occupancy requirements, so rental properties can often add ADUs
Reduces or eliminates off-street parking mandates near transit or in certain zones
Restricts cities from using minimum lot size rules to effectively block ADUs
Before HB 1337, many Pierce County jurisdictions capped lots at one ADU and required the owner to live on site. Now, in many cases:
One ADU changed to up to two
Owner-occupancy requirements are relaxed or removed
Parking standards are more flexible
Separate utility hookup fees and requirements are easier to manage
This is responding to a real housing shortage. The Washington State Department of Commerce estimated in 2023 that Washington will need about 1 million additional homes by 2044 to meet demand, including roughly 91,000 units in Pierce County over 20 years (Washington Dept. of Commerce, "Housing Needs Report"). The City of Tacoma has reported rental vacancy rates hovering around 3, 4%, well below the 5% level often considered a balanced market (City of Tacoma, Planning & Development Services). HB 1337 is one way the state is trying to close that gap by making ADUs and DADUs easier to build.
How Did ADU Rules Work Before HB 1337 in Pierce County?
Before HB 1337, most Pierce County homeowners faced tighter rules. Common limits included:
Only one ADU per lot
Strict owner-occupancy, either in the main house or the ADU
One or more off-street parking spaces required for the ADU
Restrictions on ADUs on small lots or on properties already used as rentals
In Tacoma, Lakewood, and University Place, these rules often shut the door on backyard DADUs for:
Smaller city lots without room for extra parking
Rental properties where the owner did not live on site
Sloped or irregular parcels that already pushed setback limits
The Washington State Department of Commerce and Pierce County Assessor data show rental vacancy rates in the 3, 5% range in many submarkets in the early 2020s, which puts pressure on rents and makes it harder for local workers to find housing that fits their income (Pierce County Assessor-Treasurer, market snapshots). Tight ADU rules contributed to that by limiting one of the most flexible housing types available.
How HB 1337 Applies to Tacoma, University Place, and Lakewood?
HB 1337 sets a statewide floor, not a complete rulebook. Tacoma, University Place, Lakewood, and Pierce County still write and adopt their own ADU ordinances, as long as those ordinances meet or exceed what state law requires.
That means:
State law says two ADUs must be allowed in many residential zones
Each city decides how that looks in different zoning districts
Local codes still control height limits, setbacks, lot coverage, and design standards
Typical single-family zones in these cities will often allow:
A main house plus one DADU
Or a main house plus an attached and a detached ADU, if the site can support it
Every lot is different. Real constraints include:
Setbacks and lot coverage
Easements and critical areas
Slopes and retaining walls
Existing utilities and, outside city sewer areas, septic capacity
Septic and lot complexity are especially important outside central Tacoma. In parts of unincorporated Pierce County, adding even one DADU may require septic system upgrades or may not be feasible if the system is already near capacity. This is why a professional lot assessment is always step one for any DADU in Pierce County. Before talking about floor plans or finishes, you need to answer, “What does your specific parcel actually allow, and will the numbers pencil out for your goals?”
Can You Build Two DADUs on One Pierce County Lot Under HB 1337?
“Two ADUs per lot” does not mean every lot can automatically host two large backyard houses. Instead, HB 1337 creates a menu of possible combinations that still must fit inside local Pierce County zoning and physical site limits.
Common real-world outcomes include:
Many standard Tacoma lots: main house plus one DADU, because of lot coverage or access
Larger or corner lots: main house plus two ADUs, often one attached and one detached
Alley-access properties: more flexibility on driveways and entries, but still subject to fire access and utility constraints
Physical and practical constraints you must factor in:
Building footprint and height limits
Required open space and tree protection rules
Driveway width and emergency vehicle access
Septic capacity for homes outside city sewer systems
A typical Tacoma lot might comfortably fit a single DADU behind the house, giving you one new rental unit. On a larger corner or alley lot, there may be a path to two ADUs, but only after careful site planning and coordination with city or county reviewers. It is also important to review any Pierce County zoning updates adopted in response to HB 1337, as some zones and overlays will have more flexibility than others.
What HB 1337’s Condo Provision Means: Can You Sell a DADU Separately?
One of the most powerful features of HB 1337 is the condo provision. It allows some ADUs and DADUs to be legally classified as separate condominium units from the primary house, so they can potentially be sold on their own.
In practical terms, this can involve:
Designing the site with future condo boundaries in mind
Getting a survey that maps the condo units and common areas
Preparing and recording a condominium declaration and plat
Providing separate utilities and access that lenders and title companies will accept
Why this matters for wealth building:
You may have the option to sell the DADU later to unlock equity
You can potentially refinance based on a higher combined property value
Families can structure long-term ownership for multiple generations
The Harvard Joint Center for Housing Studies has documented that homeowners generally build roughly 40 times more wealth than renters over time, largely through home equity growth (Harvard JCHS, "The State of the Nation’s Housing"). For a Pierce County homeowner, a DADU that can eventually be condoed and sold can become a major part of that long-term equity strategy, especially as Tacoma’s median single-family home price has hovered in the high $400,000s in recent years (Northwest Multiple Listing Service data).
How HB 1337 Affects the Case for a DADU in Pierce County
With up to two ADUs allowed in many situations, the math changes. Instead of a single new rental, you may be able to create a small three-unit property on a lot that started as a single-family home.
Possible strategies for Tacoma, University Place, and Lakewood include:
Two long-term rentals for stable monthly income
A mix of family housing and one income-producing DADU
Furnished housing for traveling professionals or students, where allowed by local rules
To think about ROI conceptually:
Start with realistic rent ranges for small units in your neighborhood
Compare expected gross rent to your estimated all-in DADU budget
Look at payback period and cash-on-cash returns after expenses and reserves
For example, if a 1-bedroom DADU in Tacoma can rent for $1,500, $1,800 per month depending on neighborhood, finishing quality, and parking, that is $18,000, $21,600 in gross annual income. If two modest DADUs together generate $3,000, $3,400 per month, they can materially offset a primary mortgage or support a long-term hold strategy. The National Association of Realtors has found that homes with additional finished, rentable space often sell at a premium compared to similar properties without that space (NAR, remodeling impact reports), although actual results vary by neighborhood, project quality, and market conditions.
Because site work, utility extensions, and septic or sewer upgrades can drive a significant portion of the budget, any financial model should treat construction costs as estimates only. A flat Tacoma city lot with existing sewer will usually be less complex than a steep, septic-served parcel in unincorporated Pierce County. Responsible planners will never guarantee a specific cost; instead, they will dial in an estimate once the lot assessment and preliminary design are complete.
What Steps Should a Tacoma Homeowner Take Right Now to Use HB 1337?
If you own property in Tacoma or Pierce County and want to use HB 1337, you do not start with a sketch on a napkin. You start with your land and your objectives.
A practical sequence looks like this:
Clarify your goals: family housing, rental income, resale, or future condo potential
Get a professional lot assessment to review zoning, setbacks, utilities, septic, and access
Evaluate sewer versus septic, and any likely utility upgrades
Develop a preliminary design that fits your site and budget
Move into detailed plans, permits, and construction only after the feasibility is clear
Sloped sites, alley lots, and septic properties in greater Pierce County are especially sensitive to early due diligence. Small changes in access, utilities, or grading can shift your estimates and your eventual ROI. With HB 1337 and Pierce County’s zoning updates in place, pairing careful feasibility work with a team experienced in Tacoma DADU projects gives you the best chance of turning your land into long-term housing and financial flexibility.
Conclusion: Putting HB 1337 to Work on Pierce County Property
HB 1337 and related Pierce County zoning updates make 2026 an unusually strong moment to evaluate what is possible on your lot. Whether you are in North Tacoma, South Tacoma, University Place, Lakewood, or unincorporated Pierce County, the combination of up to two ADUs, relaxed owner-occupancy rules, and potential condo pathways creates options that simply did not exist a few years ago.
At the same time, not every property will support two units, and some will struggle to support even one. Septic limitations, steep slopes, critical areas, and narrow access all shape what is realistic and what your return on investment might look like. Honest feasibility work that includes rental income projections, resale value scenarios, and maintenance reserves is essential before you commit to construction.
If you are considering a Tacoma DADU, working with local experts who live and build in Pierce County can save significant time and rework. Professionals like Matt Rody and teams focused on Tacoma DADU projects understand how HB 1337, local zoning codes, and lender expectations interact on real parcels, not just in theory. To explore how these new ADU rights could apply to your specific property and goals, contact them today for a site-specific assessment and a grounded conversation about costs, income potential, and long-term value.
Frequently Asked Questions About HB 1337 and DADUs in Pierce County
What Is Washington State HB 1337?
HB 1337 is a Washington State law that expands accessory dwelling unit rights on residential lots. It generally allows up to two ADUs in many zones, limits owner-occupancy and parking requirements, and aims to increase housing supply across cities like Tacoma and counties like Pierce. It is a key legal foundation for building DADUs in Pierce County.
When Did HB 1337 Take Effect?
HB 1337 took effect in mid-2025 at the state level. Cities and counties, including Tacoma and Pierce County, then updated their local development codes to comply with the new requirements. By now, most local ordinances reflecting HB 1337 are in place, although details continue to evolve.
How Many ADUs Can I Build on My Tacoma Property Under HB 1337?
In many residential zones, state law allows up to two ADUs on a lot with a primary home. However, the actual number, size, and configuration depend on your specific zoning, lot coverage, setbacks, septic or sewer situation, and other Tacoma code requirements. A parcel-level review is necessary before assuming two ADUs are possible.
Does HB 1337 Apply to Rental Properties in Pierce County?
Yes, one of the major shifts in HB 1337 is that non-owner-occupied homes can often add ADUs, which opens the door for investors. That said, every project must still meet all Pierce County or city permitting, life-safety, and utility standards. The law expands eligibility but does not remove the need for full code compliance.
Can I Sell My ADU Separately Under HB 1337?
HB 1337 allows ADUs and DADUs in some situations to be set up as separate condominium units. To sell a DADU on its own, you need a formal condo process that includes surveying, legal documents, and recorded plats that meet state and local requirements. Good site planning up front, including utility and access separation, makes that path much smoother.
Does HB 1337 Override Tacoma’s Local Zoning Rules?
HB 1337 sets minimum rights and prevents some older, more restrictive rules from blocking ADUs entirely. It does not erase Tacoma’s or Pierce County’s authority to regulate height, setbacks, design, impact fees, and permitting steps. Both state law and local zoning must be satisfied for a DADU project to move forward.
Do I Still Need Permits to Build a DADU Under HB 1337?
Yes. You still need all required building, land use, and utility permits from your city or from Pierce County. HB 1337 changes what must be allowed, but it does not make ADUs a no-permit, by-right construction activity. Working with a design-build team that handles permitting can reduce risk and delays.
How Does HB 1337 Affect Property Values in Pierce County?
Adding one or two ADUs can increase the usable living space and the income potential of a property. Research from organizations like the National Association of Realtors and the Harvard Joint Center for Housing Studies shows that additional finished, rentable space can support higher valuations over time. Actual results vary by neighborhood, project quality, and market conditions.
Is Every Lot in Tacoma Eligible to Build Two ADUs Under HB 1337?
No. Some lots are limited by zoning overlays, critical areas, slopes, easements, or septic capacity. HB 1337 opens the door, but it does not guarantee that every property can host two ADUs. Responsible builders will not promise two units without a careful site review.
How Do I Find Out If My Lot Qualifies Under HB 1337 in Tacoma?
The most reliable way is a professional lot assessment that looks at zoning, setbacks, utilities, access, septic or sewer, and physical conditions. For Tacoma, University Place, Lakewood, or greater Pierce County, starting with that assessment gives you a clear picture of what HB 1337 really allows on your land and how a DADU project might align with your financial and family goals.
Unlock More Space With a Custom Backyard Home
If you are ready to explore what a thoughtfully designed accessory dwelling unit can do for your property, we are here to guide you every step of the way. At Tacoma DADU, we help homeowners plan, permit, and build a DADU in Pierce County that fits their goals, budget, and lot. Reach out to our team so we can discuss your ideas, review your property, and outline clear next steps for your project.
