On paper, Kirkland's new affordable housing fee looks modest. It is $15 per square foot, and it only applies to the area above 2,000 square feet. In practice, that cutoff sits well below the size of the houses being built. The City's own permit data shows that the typical new single-family home without an ADU in a low-density zone is 4,320 square feet. At that size, the fee comes to $34,800 per house, and it starts January 1, 2027.
That number matters to buyers who are pricing a home still under construction, and to owners holding a buildable lot. The open question for the coming year is whether the cost shows up in a buyer's price, in a builder's margin, or in a lower price for the land underneath.
What the Code Actually Says
The rule comes from Ordinance O-4905, which the City Council adopted on June 17, 2025, as part of its state-mandated middle housing update. The amended Kirkland Zoning Code 112.15 reads: "Beginning on January 1, 2027, for all new dwelling units more than 2,000 square feet in low-density residential zones, 10 percent of the unit(s) will be affordable housing units."
No builder will deliver a tenth of a house, so the fee in lieu does the work. Section 112.30 sets the payment at $15.00 per square foot, "applied to each square foot above 2,000 square feet." The code allows a fee in lieu for any fractional requirement below 0.66 of a unit. A single new house works out to 0.1 of a unit, so the fee applies.
Three details matter for anyone with a contract in hand:
- Timing: The amount owed is set before any building permit is issued, and it must be paid before the certificate of occupancy.
- Exemptions: A replacement home of 2,000 square feet or less is exempt. So is a remodel, rehabilitation, conversion or alteration that adds no more than 100 percent of the home's existing square footage.
- Future changes: Starting in 2028, the Council may adjust the rate to reflect market conditions. In January 2028, the Planning and Building Director must report on whether the program has affected housing development.
The City's Middle Housing Code Amendments page still lists the January 1, 2027 start date.
The 2,000-Square-Foot Line Sits Below Almost Every New House
The City sets the threshold to spare cottages and ADUs, and it does. The houses on either side of a cottage project are another matter. In an August 18, 2026 staff memorandum, City planners reviewed 185 permits for 209 units completed in low-density zones between May 2024 and November 2025. Of the 104 single-family homes in that group, only 2 fell between 2,000 and 2,500 square feet and 5 fell between 2,500 and 3,000. The other 97 were larger than 3,000 square feet.
The memo explains the reason: in these zones, allowed floor area on a typical lot equals 50 percent of the lot area. Builders tend to use that allowance, so the fee follows the house sizes the zoning already produces.
Applying the adopted formula to the City's own averages:
| New home in a Kirkland low-density zone, May 2024 to Nov 2025 | Average size | Fee at $15 above 2,000 sq ft |
|---|---|---|
| Single-family home, no ADU | 4,320 sq ft | $34,800 |
| Single-family home with one ADU | 3,482 sq ft | $22,230 |
| Single-family home with two ADUs | 2,981 sq ft | $14,715 |
| The ADUs themselves | Under threshold | $0 |
The table shows a size gradient. A main house built alongside ADUs has tended to be smaller, so it owes less, and the ADUs owe nothing. A builder deciding between one large house and a house plus two ADUs on the same lot now faces roughly a $20,000 difference in fees, before any other cost.
The memo also explains how the rate was set. Staff calculated the $15 figure to raise about 10 percent of the cost of building an affordable unit for every average-sized house. That calculation assumed the fee applied to every square foot. The rate was not adjusted when the Council added the 2,000-square-foot exemption. Across the 110 units in the study period that would have been subject to the fee, staff estimated total collections of $3,355,815.
Why the Rule Is Still $15, After a Summer of Debate
The Council came close to changing the rule. In May 2026, it asked staff to draft Ordinance O-4937, which would have raised the exemption from 2,000 to 2,500 square feet. After a public hearing on June 16, the vote tied 3 to 3 and the item was tabled. Staff recommended keeping the 2,000-square-foot threshold. Their reasoning was that units between 2,000 and 2,500 square feet are mostly townhomes in medium-density zones, which already have their own fee program, so a higher threshold "mainly benefits single-family homes."
The Urbanist reported that on September 1, 2026, the higher threshold failed by a single vote, 3 to 4. Councilmembers Shilpa Prem, Amy Falcone and John Tymczyszyn voted in the minority. In that coverage, Prem argued that middle housing "is also townhouses and smaller single-family homes," and she cited staff data showing that townhomes in low-density zones average about 2,400 square feet. At the same meeting, an amendment raising the rate to $20 passed 4 to 3. Because the ordinance it amended then failed, the $20 rate never took effect. The adopted 2025 version stands, at $15 per square foot above 2,000 square feet.
Had the higher threshold passed, the average 4,320-square-foot house would have owed $27,300. At $20 per square foot with the higher threshold, it would have owed $36,400. Every version the Council considered left a five-figure charge on a typical new house.
The Same House, Three Cities
Kirkland's fee is the lowest of the three Eastside cities with this kind of charge on new detached homes, and it is the only one that also comes with a 2,000-square-foot exemption. For a buyer comparing new construction across the Eastside, the formulas differ enough to change the math:
| City | Published rate | What gets charged | Fee on a new 4,320 sq ft house on a vacant lot |
|---|---|---|---|
| Kirkland | $15 per sq ft starting January 1, 2027 | Area above 2,000 sq ft | $34,800 |
| Redmond | $30 per sq ft in 2027 | All net-new area, no size exemption | $129,600 |
| Sammamish | $34.45 per sq ft, current rate as of October 2026 | Finished floor area above 1,750 sq ft | $88,536.50 at the current rate |
Redmond's Neighborhood Residential Zone payment-in-lieu schedule phases in a $30 baseline: $7.50 in 2025, $15 in 2026 and the full $30 in 2027. The rate applies only to net-new square footage. A Redmond teardown is charged only on the area added beyond the house it replaces, so the vacant-lot figure above is the high end.
The City of Sammamish's affordable housing regulations page lists a current fee of $34.45 per square foot under Ordinance O2026-597, in effect since August 29, 2026. The page does not publish a separate 2027 rate. It also gives an example of a new 3,000-square-foot home that owes $43,062.50.
In Kirkland, the fee is smaller but nearly universal for new houses. It applies from the first square foot over 2,000, and recent permits show that almost no new detached house comes in under that line.
The Fee Arrives When Buyers Have More Leverage
A builder can add a fee to the asking price only if buyers will pay it, and Kirkland buyers currently have more room to push back. In NWMLS's September 2026 King County breakout, map area 560, which covers Kirkland and Bridle Trails, had 226 active residential listings, up 27 percent from a year earlier. Pending sales fell 24.6 percent to 46, and inventory reached 3.70 months. Closed sales rose to 61 in September 2026 at a $1.9 million median, 17.4 percent below September 2025. With this few sales in a month, a change in the mix of homes sold can move the median a lot, so the listing and pending figures are the more reliable signal.
Region-wide, NWMLS's October 6 market update reported 24,965 active listings in September 2026, up 24.5 percent and the highest inventory since September 2014. Pending sales fell 15.1 percent.
In a tight market, a $34,800 fee would likely be added to the list price. With more listings to choose from, some of it may come out of builder margin, and over time the City's fee may lower what builders are willing to pay for land. For an owner selling a buildable lot, that matters. A builder's offer on a lot after January 1 is likely to account for a fee that did not exist when neighboring lots last sold.
What to Ask About a Home Not Yet Finished
State law sets the timing on which rules apply. Under RCW 19.27.095, a valid and fully complete building permit application is considered under the zoning and building ordinances in effect on the date it is filed. Kirkland's code sets the fee before the permit is issued and collects it before occupancy. Any home under contract that has not yet received a certificate of occupancy therefore raises a few questions:
- When was the building permit application filed, and was it complete on that date?
- Does the builder expect the City to assess the low-density affordable housing fee on this permit?
- If the City assesses the fee, does the contract say whether it is already in the price or added at closing?
- For a lot sale, has the buyer's offer already accounted for the fee on the house they plan to build?
This is general information, not legal, tax or financial advice. Confirm how the rule applies to a specific property with a Washington real estate attorney and the City of Kirkland Planning and Building Department.
FAQ
Does the fee apply to an addition or remodel? Not if the work adds no more than 100 percent of the existing home's square footage. The code exempts those projects, as well as replacement homes of 2,000 square feet or less.
Do ADUs and cottages pay? Units of 2,000 square feet or less are under the threshold. The City's staff memo notes that the threshold exempts all cottages and ADUs.
Could the rate change? The code allows the Council to adjust the rate starting in 2028. The Planning and Building Director's January 2028 report will review how the program has affected building.
If you are pricing a new Kirkland home or a buildable lot before or after January 1, Roy Towse and Team Towse can help you work out how this fee may affect your deal. Book a Call Today.
