As Washington state continues to grapple with a severe housing shortage, Gov. Bob Ferguson this week signed into law a bill aimed at expanding the use of Accessory Dwelling Units (ADUs) — a housing solution seen as both flexible and efficient for adding affordable living space.

ADUs, often called granny flats, in-law suites, or backyard cottages, are smaller, self-contained housing units located on the same lot as an existing residence. They’ve gained traction across the country as cities and states search for creative ways to address housing affordability and limited inventory — and Washington is no exception.

Earlier this week in Seattle, Ferguson signed Engrossed Senate Bill 5529, which expands a property tax exemption program for ADUs that are rented to low-income tenants.

“Senate Bill 5529 expands tax exemptions to support affordable housing in Washington state,” Ferguson said Wednesday during a signing ceremony for a package of housing-related legislation.

The bill modifies existing law by broadening eligibility for the property tax exemption. Previously, only counties with populations above 1.5 million — essentially King County — could offer the tax break. Under the new legislation, counties with populations between 900,000 and 1.5 million, such as Pierce and Snohomish, will also be able to participate. The exemption applies to detached ADUs and may come with administrative fees.

“The exemption is intended to encourage homeowners to rent accessory dwelling units to low-income renters to increase the availability of low-income housing,” Ferguson explained.

The new law is designed to provide financial incentives for property owners to contribute to the state’s stock of affordable housing — a critical need as projections indicate Washington must add more than 1 million housing units by 2044 to meet population growth.

Ferguson also took a moment to acknowledge the personal loss suffered by the bill’s prime sponsor, Sen. Chris Gildon, R-Puyallup, who was absent due to a family tragedy.

“We appreciate everybody who made this legislation possible, particularly the prime sponsor, and that is state Sen. Chris Gildon. I will just take a moment … it’s been a tough legislative session in many ways on the personal side,” Ferguson said. “His wife, Autumn, passed away very unexpectedly on the last weekend of session. So, Sen. Gildon, we’re thinking about you and praying for you and your family during this really challenging time, to put it very mildly. I’m signing this bill in appreciation for his service, and I’m thinking about him … it’s my honor to sign this.”

The ADU tax exemption bill wasn’t the only measure Ferguson signed this session to encourage ADU development. He also approved Substitute House Bill 1353, sponsored by Rep. Alex Ramel, D-Bellingham. That law establishes a voluntary self-certification program for architects to streamline the permitting process for detached ADUs.

According to a statement from House Democrats, the legislation:

“Creates a voluntary self-certification program that allows registered architects to certify that detached ADU plans comply with building codes in cities governed by the Growth Management Act (GMA). The goal is to reduce permitting delays, cut costs, and ease the burden on local planning departments.”

Housing experts have long argued that ADUs play a vital role in meeting housing needs, especially in dense urban areas where space is limited but demand remains high. These recent legislative moves show that state officials are taking the issue seriously — not just by removing barriers to construction, but also by aligning policy with the financial and logistical realities faced by homeowners and developers alike.

As Washington's population continues to grow and housing prices remain out of reach for many families, state lawmakers are expected to propose additional reforms in upcoming sessions to promote ADU construction, simplify zoning, and expand tax benefits tied to affordable housing development.

Originally reported by Carleen Johnson in The Center Square.