Tapped Out

Executive Summary

In this study, we examine whether accessory dwelling units (ADUs) in Washington are being charged with a disproportionate share of water and sewer hook-up fees compared to standard single-family homes (SFH). Using fee schedules from 13 sample municipalities and utility providers across the state, the analysis compares connection charges and system development charges for ADUs and SFHs. The findings show that most jurisdictions do not maintain separate rates for ADUs and instead charge them the same fees as full-sized SFHs, despite ADUs generally being smaller and likely placing less demand on utility systems. Only two jurisdictions in the sample had ADU-specific water rates, and only two had ADU-specific sewer rates. Where separate ADU rates existed, they ranged from roughly 50% to 86% of the SFH charge. The study also found substantial variation in fee levels across jurisdictions, with some utilities charging more than double the sample average for certain ADU connections.

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Overall, we conclude that current fee structures often fail to reflect the proportional impact of ADUs and may create an unnecessary barrier to ADU development. We recommend that jurisdictions treat ADUs equitably by reevaluating their methodologies and establishing utility hook-up fees based on the relative system impact of ADUs rather than defaulting to SFH rates.

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Introduction

As the housing crisis in Washington state continues to ripple through the economy, one positive area of improvement has been the legal expansion of accessory dwelling units (ADUs). In 2019, Seattle removed off-street parking requirements for ADUsⁱ. The market in Seattle responded eagerly. Annual authorized permits for ADUs in Seattle grew 325%, from 281 in 2019 to 914 by 2022ⁱⁱ. The state legislature, inspired by this change, passed HB 1337 in 2023ⁱⁱⁱ. It required cities and counties to allow ADUs within urban growth areas and created consistent standards for ADUs across the state.  

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HB 1337:

• Allows  up to two ADUs per residential lot (they may be attached or detached to the primary unit)

• Prohibits local jurisdictions from requiring that ADUs be less than 1,000 square feet; and  

• Requires local jurisdictions to charge less than 50% of the impact fees charged for the primary residential unit.  

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While permit data is not readily available statewide, the newfound popularity of ADUs in Seattle has remained steady with an average of 913 annual permits authorized between 2023 and 2025. Industry participants have signaled that the development and use of ADUs continue to grow around the state.

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It’s easy to understand the popularity of ADUs now that legal limitations on them have been lifted. They offer current homeowners a chance to repurpose parts of their home or land and make money by renting or selling the ADU. Likewise, ADUs can serve as an attractive option for renters or buyers looking for a smaller home or unit size within typical single-family residential community. However, development of ADUs is not without its challenges.

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One area has accumulated the attention of builders and housing advocates as a pain point for the development of ADUs: water utility hook-up fees.  

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As we flow further into this topic, it can quickly become confusing as water hook-up fees go by many different names and can refer to different types of charges issued by water, sewer and stormwater utilities.  

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The overall term for these fees is connection charges. Within connection charges, there are two types of charges. The first type is paying for the actual physical connection, to connect a new building to the existing water system. The second type is system development charges (SDCs), which are intended for new development to pay for their share of the existing and future system facilities.  

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Stormwater SDCs are calculated based on impervious surface area and sometimes per vehicle trip. Unlike impact fees (for schools, parks, or transportation), connection charges are not required to be less for ADUs than primary single-family residences. Connection charges do not necessarily include the costs associated with physically connecting to utility service, which may include material, equipment, and labor costs.

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On the surface it can seem like hook-up fees are fair and reasonable but looking underneath can reveal a different picture. Sometimes utilities require developers to go beyond connection charges and SDCs.  

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The Urbanist reported on two ADU projects being required by Seattle Public Utilities to pay for upgraded water valves with costs ranging from $100,000 to $800,000.^iv Those kinds of extraordinary examples may not be occurring statewide, but it made us want to dive deeper into hook-up fees for ADUs around the state to see if they are facing disproportionate charges.

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Methodology & Assumptions

To test if ADUs are being charged disproportionately for utility connection charges, we looked at fee schedules for 13 sample municipalities and utilities of various sizes across the state. We then compared the rates they charge ADUs compared to the rates they charge for standard single-family homes (SFH).  

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Every jurisdiction varies on how they define and calculate connection charges. However, jurisdictions typically use an equivalent service unit (ESU) or equivalent residential unit (ERU) to determine the base rate for SFHs. Unless otherwise noted, we assumed a ¾” connection for SFH or ERU. Where jurisdictions did not specifically mention separate rates for ADUs in their fee schedules or municipal codes, we assume they are charging ADUs and SFH the same rates.

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The size of ERUs will vary from city to city, but because ADUs are typically limited to being smaller than the average SFH, they should likewise be smaller than the ERU. The sizing for water connections is determined by the plumbing code, but ADUs should also have lower fixture counts than average SFH.  

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One challenge of this study is that while theoretically there should be differences between connection charges for current service and future system improvements via SDCs, all jurisdictions we looked at charged one seemingly unified fee for water while using different terms to refer to the fee.  

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Four jurisdictions specifically called the fee a SDC so presumably it is only for future expansion, but all other jurisdictions called their fee a connection charge (or some similar term) that could refer to a fee for current service or a SDC or both.  

There was no consistency in the general amount of the fees to distinguish if a jurisdiction was likely using one definition or the other. So, we will assume—unless otherwise noted—that the unified water connection charge could be referring to both a general connection charge and an SDC. The same is true for sewer fees where only one jurisdiction charged two separate fees, the rest all had unified fees.  

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Results

We found that only three out of the 13 sample jurisdictions have a specific rate for ADUs compared to SFH (for both water and sewer charges). Thus, most of the jurisdictions are charging ADUs and SFHs at the same rates. For jurisdictions that have separate rates for ADUs, those rates are between 50-86% of what is charged for SFHs.

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Looking at fees across jurisdictions, we see quite a bit of variance. This could be explained by each utility having a different customer base, system size, and so on. There also can be localized differences in labor and material costs, although these should be minimal since all are within Washington state. However, there seems to be no immediately apparent rhyme or reason for the large variances in connection charges.  

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While this sample size is small and is not comprehensive of all jurisdictions, out of curiosity, we also compared the ADU connection charges individually to the average across all sampled jurisdictions. The average connection charge for ADUs is $5,326.40 for water and $5,847.58 for sewer. Eighteen of the individual charges are either at or below the average rate while nine are above. This shows that out of these sample jurisdictions over half of the fees are in line or below what an ADU may be charged if it were being built and connected in a different jurisdiction. However, there are a few instances where connection charges are more than 50% above average.  

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Conclusion

Based on the sample jurisdictions we looked at, ADUs are generally charged the same utility connection charges as SFH. There are few jurisdictions that have separate rates for ADUs, and those rates are lower than the standard SFH rate. Even if a jurisdiction has relatively low connection charges compared to other jurisdictions, they still are placing a disproportionate impact on ADUs if they charge them the same as SFH. These charges also do not include the actual material, equipment, and labor costs of connecting the ADU to the utility system which utilities may require builders to pay. Similar to the example mentioned in the introduction, some developers are required to pay for upgrading the water main beyond what is necessary to service the new dwelling unit. These results indicate that jurisdictions can make improvements to reduce disproportionate regulatory costs on ADU development.

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Policy Recommendation

Jurisdictions that currently charge ADUs the same rate as SFHs should reevaluate their fee schedules and calculate new rates based on ADUs proportional impact relative to the ERU. At the same time, they can also compare their fee amounts to other utilities in their area or of similar size and service capacity. State law (for municipalities^v and water-sewer districts^vi) already requires that connection charges are only for a property owner’s equitable share of the cost of a utility system. If jurisdictions fail to rectify their disproportionate connection charges than the legislature should create explicit requirements that ADUs shall be charged less than an ERU.  

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The legislature could also update the legal limitations on connection charges for municipalities and water-sewer districts, so they match each other and those placed on impact fees. The funds collected for general facility connection charges and system development charges should be placed in separate interest-bearing accounts. If the funds are not used within 10 years, then they should be refunded with interest. More explicit limitations should be placed on the use of the funds, ensuring local jurisdictions don’t use general facility connection charges to backfill existing deficiencies and system development charges for 100% of future improvements. These changes will still allow jurisdictions to have a revenue stream based on new connections without requiring ADUs to pay more than what they are adding to the system.

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1. ‍¹Trumm,D. (2025, July 1). Seattle eases accessory dwelling restrictions just ahead of state deadline. The Urbanist. https://www.theurbanist.org/seattle-eases-accessory-dwelling-restrictions-state-deadline/^‍
2. ²Cityof Seattle. (n.d.). Accessory dwelling units permitted by year issued[Data set]. ADUniverse / Seattle Open Data. https://aduniverse-seattlecitygis.hub.arcgis.com/pages/data^‍
3. ³WashingtonState Legislature. (2023). HB 1337 – Expanding housing options by easing barriers to the construction and use of accessory dwelling units. https://app.leg.wa.gov/billsummary?BillNumber=1337&Year=2023^‍
4. ⁴Breske,D. (2022, October 25). Does Seattle Public Utilities exact impermissible capital improvement fees? The Urbanist. https://www.theurbanist.org/does-seattle-public-utilities-exact-impermissible-capital-improvement-fees/^‍
5. ⁵WashingtonState Legislature. (n.d.). RCW 35.92.025: Authority to make charges for connecting to water or sewerage system—Interest charges.https://app.leg.wa.gov/rcw/default.aspx?cite=35.92.025^‍
6. ⁶WashingtonState Legislature. (n.d.). RCW 57.08.005: Powers.https://app.leg.wa.gov/RCW/default.aspx?cite=57.08.005‍
7. City of Everett. (n.d.). Utility & system development fees.
   https://www.everettwa.gov/DocumentCenter/View/189/Utility--system-development-fees-PDF‍
8. City of Kent. (n.d.). Kent Municipal Code § 7.02.090.
   https://www.codepublishing.com/WA/Kent/html/Kent07/Kent0702.html#7.02.090‍
9. City of Longview. (n.d.). Master fee schedule.
   https://www.mylongview.com/986/Master-Fee-Schedule‍
10. City of Moses Lake. (2026). 2026 fee schedule.
    https://mrsc.org/getmedia/3b11b615-8838-470f-8825-8dd71a268237/r5feeSchedule.pdf‍
11. City of Spokane. (n.d.). General facilities charges.
    https://my.spokanecity.org/publicworks/general-facilities-charges/‍
12. City of Sultan. (n.d.). Sultan Municipal Code §13.12.080 (water) and § 13.08.030 (sewer).
    https://codepublishing.com/WA/Sultan/‍
13. City of Sultan. (2017). Ordinance No. 1279-17: Water general facility charge.
    https://www.sultanwa.gov/DocumentCenter/View/298/1279-17---Water-General-Facility-Charge-PDF‍
14. City of Sultan. (2020). Ordinance No. 1322-20: Sewer general facility charge.
    https://www.sultanwa.gov/DocumentCenter/View/5052/Ordinance-1322-20-Sewer-GFC‍
15. City of Sumas. (n.d.). Utility hook up fees.
    https://www.cityofsumas.com/wp-content/uploads/2026/01/Hook-Up-Fees-Quick-Reference-v2.pdf‍
16. City of Yelm. (n.d.). Fee Schedule.
    https://www.ci.yelm.wa.us/departments/planning_building/fees.php‍
17. Highline Water District. (n.d.). Connection charges.
    https://www.highlinewater.org/191/Connection-Charges‍
18. King County Water District No. 20. (n.d.). Meter installation fees.
    https://www.kcwd20.com/DocumentCenter/View/129/Meter-Installation-Fees-PDF‍
19. Soos Creek Water and Sewer District. (2026). Resolution No. 3784-C Rev. 01/28/2026: 2026 Schedule of fees and charges.
    https://www.swssd.com/183/Fees-Charges‍
20. Valley View Sewer District. (n.d.). Connecting to sewers.
    https://www.valleyviewsewer.org/connecting-to-sewers/

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