Duplex, townhome activity could rise amid infill push in Spokane
Condos could see boost following 10-year droughtJune 6th, 2019
Spokane County is experiencing a slight increase in construction of duplexes and townhouses, a trend that some local experts say is likely to continue as the city of Spokane looks to boost infill development and smaller investors seek to develop alternatives to conventional single-family homes and multifamily apartment complexes.
Chris Bornhoft, real estate agent with Windermere Commercial, says infill development naturally lends itself to small residential projects like townhouses and duplexes. He claims there are two major reasons why infill development could be increasing.
“One of them is that the city and the county have done a terrible job of keeping up with the demand for multifamily, so they haven’t zoned enough land for multifamily,” Bornhoft says. “The second part is that you have big developers like Wolff and these other companies that will build 200 or 300 units at a time. That’s really hard to compete with. Lack of available land and competition means people are going to get more creative.”
In 2018, 59 townhouses worth a total of $9.6 million and 29 duplexes worth a total of $11.4 million were issued building permits by the city of Spokane.
According to City of Spokane Valley economic development specialist Lesli Brassfield, 76 duplexes received building permits last year.
Earlier this year, a Spokane Valley resident filed a proposal to change part of the city code to reduce the number of duplexes per acre allowed by the city. The proposal was voted down by the Spokane Valley City Council on May 28.
Joel White, executive officer of the Spokane Home Builders Association, says Spokane County saw duplex construction hit a peak in 2015, when 254 duplex units were built. That number dipped in 2016 and 2017, but it remains fairly high, he says — a total of 244 duplex units were constructed in Spokane County in 2018.
The county issued permits for 11 duplexes, seven triplexes, and two fourplexes in 2018.
“You’re seeing more private investors going in to build duplexes now. They’re seeing that as a revenue source,” White says.
Duplexes can be constructed much faster than other types of residential developments — and for less money, White contends.
Townhouses, on the other hand, fall into a different zoning category as well as a different financing category, Bornhoft says.
“Those are financed differently, zoned differently, constructed differently, and you take ownership of them differently than you would something like a condo,” Bornhoft says.
According to the Spokane Municipal Code, townhouses can only be constructed in medium-density residential zones.
Elliott Whipple, an engineer-in-training with Spokane Valley-based Whipple Consulting Engineers, is involved in construction of a seven-unit townhouse project at the southeast corner of Francis Avenue and Astor Street, a few blocks east of Division Street. He says the area is zoned for projects such as townhouses.
“It’s on the outer fringe of that Division and Francis development area,” Whipple says. “It’s a good transition.”
Both Bornhoft and White predict Spokane County will soon experience an increase in townhouse construction.
Bornhoft says he’s currently considering pursuing townhouse projects.
“I’ve got two projects in mind right now that are going to be townhouse-style that are in the works,” Bornhoft says.
White says townhouses are more likely to be built in more affluent parts of Spokane, such as Kendall Yards and parts of the South Hill.
“There are hot little segments of the market,” White says. “There are some areas where you can build townhouses successfully and others probably are not right for that type of housing yet.”
Townhouses could be an increasingly popular option for renters who can’t afford to buy a home but don’t want to live in an apartment complex, he says.
“People like the scale of townhouses because they feel more like homes,” Bornhoft says. “They’re a nice in-between.”
Lower-density residential neighborhoods are also less likely to react strongly to a townhouse development than an apartment complex, Bornhoft claims.
“You put in a big, sprawling apartment complex that’s three stories tall that’s right next to a neighborhood and people instantly hate it,” he says. “There’s usually no love for a big apartment complex.”
White says that condominiums may soon become another popular alternative to single-family and multifamily residential developments.
A decade ago, the Washington Condominium Act made suing condominium developers easier for condo owner associations. The idea was to protect consumers, but White says the law made condo development so risky that developers simply stopped constructing condos.
“Developers had to start building in reserves if they were building a condo, because they were going to get sued,” White claims. “It wasn’t if, it was when you got sued. That is what caused the entire condo market to just come to a grinding halt.”
In late March, Gov. Jay Inslee signed into law a bill that is intended to address the issue.
“I think there’s a 90-day lead time on that, so I would say in roughly 60 more days, that new condo legislation will go into effect,” White says. “What that’s going to do is allow people to start building more condos, because there’s not going to be a provision in the condo law that allows you as a developer to get sued. Now what you’re going to see is people are going to either start doing large-scale condo projects, or they might do multi-unit condo projects.”