Lacey planning single ordinance for middle housing, ADUs and unit lot subdivisions 

Three major housing updates are now being woven into a single ordinance by the City of Lacey’s Community and Economic Development Department.

The ordinance would establish new standards for middle housing, accessory dwelling unit (ADU) expansions and unit lot subdivision (ULS) in 2026. 

The ordinance comes as the City of Lacey Planning Commission starts its review of House Bill 1110, House Bill 1337 and ULS provisions that will guide future short plats in the city.

Housing Coordinator Jennifer Adams said the changes affect the same sections of the Lacey Municipal Code and single-family areas. 

She laid out the city’s planned path during the commission’s meeting on Wednesday, Nov. 12, before all three updates move to the Lacey City Council for consideration as a single ordinance. 

Middle housing 

Adams provided a technical review of “middle housing,” which the state defines as buildings that match the scale, form and character of single-family dwellings while containing “two or more attached, stacked, or clustered homes.”  

The housing types identified under HB 1110 include duplexes, triplexes, fourplexes, five-plexes, six-plexes, townhouses, stacked flats, courtyard apartments and cottage housing. 

She said middle housing is not synonymous with affordable housing. 

“Middle housing refers to building type,” said Adams, noting affordability is defined by income thresholds and rent or payment limits, while middle housing refers strictly to building types. 

She mentioned the housing types required under HB 1110 “help fill the gap” between detached homes and large multifamily apartment complexes. 

HB 1110 requires jurisdictions to adopt at least six of the nine state-identified, middle-housing types. Under HB 1110, Lacey must allow middle housing in all zones that allow detached single-family residences.  

Lacey already has provisions for duplexes, triplexes, townhomes and cottage housing, but does not currently specify fourplexes or stacked flats. The city, Adams said, is going to retrofit existing housing sections, so each of the mandated types is classified as “middle housing,” which impacts density allowances and dimensional standards. 

The statute also requires all lots permitting single-family dwellings must allow for two middle housing units. Lots must accommodate three or four units if one of those units is affordable, which is defined as 80% Area Median Income or below. 

Middle housing must use the same dimensional and permitting standards as single-family dwellings in a given zone and must be processed through administrative design review. 

HB 1110 also imposes parking maximums. For lots 6,000 square feet or less, cities may require one off-street parking space per unit. For lots over 6,000 square feet, cities may require two spaces per unit and no more. 

Commissioners examined results of the city’s 2024 community survey on middle housing that collected 361 responses and more than 100 written comments. 

Respondents showed the highest acceptance for fourplexes, townhouses and cottage housing, which the planning commission supported in previous discussions. 

Adams then explained the timeline complication that emerged after the 2025 legislative session. Originally, cities were given six months after their comprehensive plan updates to adopt a middle-housing code. 

Because Lacey’s comprehensive plan update is due at the end of 2025, the city expected a mid-2026 adoption window. However, late-session legislative changes removed the six-month extension, moving the compliance deadline to Dec. 31, 2025. 

Adams said the city would not meet the Dec. 31 deadline. There are no penalties, she said, but the Washington State Department of Commerce's model ordinance will preempt local regulations beginning Jan. 1, 2026. 

The model ordinance continues to apply until Lacey adopts its own middle-housing chapter, which is anticipated by June 30, 2026. 

Accessory dwelling unit  

The commission also reviewed changes to ADU standards under HB 1337. The state requires cities to allow two ADUs per lot where single-family detached homes are allowed. 

ADUs may be attached, detached, or created within an existing structure. The law prohibits minimum lot sizes for ADUs and prohibits owner-occupancy requirements. The commission noted Lacey has never required owner occupancy for ADUs. 

HB 1337 also increases the maximum ADU size to 1,000 square feet from 850 square feet. The statute does not set a maximum ADU size beyond that threshold, and cities may allow larger units, though city staff has not recommended an increase. 

The commission asked whether removing owner occupancy rules could contribute to “squatter issues.” 

Adams said all ADUs require a permit and inspections, and must be legally authorized by the property owner, so the change does not affect trespass enforcement or property control. 

Unit lot subdivision 

The third update involves the introduction of ULS, which Adams said functions differently from a standard subdivision. ULS “creates new lots much like a typical subdivision,” but applies different rules. 

The “parent lot” must meet all zoning dimensional standards, while the individual “child lots” created inside the parent lot are not required to meet those standards. Child lots become a legal lot of record with its own tax parcel identification number. 

The approach can be applied to middle housing, ADUs and other infill development. Adams showed examples, including a single-family home with a triplex behind it, a four-unit townhouse building and a primary home with an ADU.  

Child lots may include shared common areas similar to a condominium development, but unlike a condominium, the lot owners hold title to the land underneath their unit. 

ULS must be added to Lacey’s short plat regulations, which allow a maximum of nine lots and are approved administratively. 

Adams said packaging the three code updates into one ordinance would provide “clarity and consistency” because each one expands housing options on single-family lots and modifies similar dimensional and permitting standards. 

City staff plans to bring the middle housing provision to the commission first, followed by ADUs and the ULS provisions, before forwarding all three to the Lacey City Council as a single ordinance. 

The draft middle housing code is expected early next year, with ADU and ULS updates planned for spring 2026.