Two state laws — HB 1110 and HB 1337 — have done something the Eastside market hasn't seen in decades: legalized more homes on land that used to allow only one.
What the laws actually do
HB 1110, the middle-housing law, requires many Washington cities to allow duplexes, triplexes, and in some cases up to four to six units on lots that were previously single-family — with more units permitted near frequent transit or when affordable units are included. HB 1337 separately expanded the right to build accessory dwelling units (ADUs) and detached ADUs (DADUs) on residential lots.
Why investors should care
Together, these reforms create value-add strategies that didn't exist before. A single-family lot might now support an income-generating ADU, or a teardown-and-rebuild as a small multiplex. Properties that never penciled as rentals can suddenly cash flow when a second or third unit is on the table.
The house-hack on-ramp
For first-time investors, house-hacking is the most accessible play: buy a duplex (or a single-family with an ADU), live in one unit, and rent the others. Because you're owner-occupying, you can often use lower-down-payment, better-rate financing while tenants help cover the mortgage. It's how a lot of Eastside portfolios begin.
- Check each city's specific implementation — adoption and unit limits vary by jurisdiction and tier.
- Model the deal with realistic vacancy, management, and maintenance assumptions, not best-case rent.
- Factor construction and permitting timelines and costs, which remain elevated.
- Plan your exit and tax strategy early — a 1031 exchange can defer gains when you scale up.
If you're weighing a lot for its middle-housing potential, we'll underwrite it both ways — as-is and with added units — so you can see the real upside before you offer.
Have questions about this for your own situation? Let's talk it through.
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