For years, one of the biggest barriers to ADU investment was the owner-occupancy requirement — the rule that required the property owner to live on-site, either in the main house or the ADU. HB 1337 changed that.
What Changed
Before HB 1337
- Owner must live in either the primary home or the ADU
- Annual affidavit required to prove residency
- Investors couldn't build ADUs and rent both units
- Complicated exceptions for illness, death, or unforeseeable events
After HB 1337 (Effective July 1, 2025)
- No owner-occupancy requirement — owner does not need to live on-site
- No more annual affidavits
- Owner can rent both the main home and the ADU(s) independently
- Opens ADU investment to non-resident property owners
Source: RCW 36.70A.681(1)(b)
Current Status in Whatcom County
Bellingham
Bellingham's BMC 20.10.036(B)(4)(b) still technically lists an owner-occupancy requirement for residential single zones. However, this is expected to be fully eliminated as the city completes its HB 1337 compliance.
Practical reality: With the state preemption in effect as of July 2025, this local requirement is effectively unenforceable.
Whatcom County
The county has been updating its comprehensive plan to align with HB 1337. Owner-occupancy requirements are being removed as part of the 2025 UGA amendments.
State backup: If the county didn't update its code, the state standards (RCW 36.70A.535) automatically apply, which don't include owner-occupancy requirements.
What This Means For You
Homeowners Living On-Site
Nothing changes for you — you can still build an ADU and live in your main home (or the ADU). The difference is you're no longer required to. If you ever move, you can rent both units without any legal complications.
Real Estate Investors
This is a game-changer. You can now purchase a property, build one or two ADUs, and rent all units — without ever living on-site. This significantly improves the investment math for rental properties in Bellingham and Whatcom County.
Homeowners Planning to Move
You can build an ADU now, enjoy the rental income while you live there, and continue renting both units if you decide to move. No need to sell or deconstruct the ADU.
Ready to run the numbers? See our ADU cost breakdown for Whatcom County or pricing page to understand the full investment. Then get a free feasibility study to confirm what's possible on your property.
Important Caveats
HOA CC&Rs may still require owner occupancy in some communities — covenant review is recommended.
Short-term rental restrictions are separate from owner-occupancy rules. Cities can still regulate Airbnb/VRBO.
Mortgage requirements may have their own occupancy stipulations independent of local law.
Insurance coverage may differ for non-owner-occupied rental properties.
Last updated: March 2026. Not legal advice. Verify current regulations with your local planning department.
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