Olympia Middle Housing Faces Cost and Infrastructure Hurdles
City planners are drafting code changes to address land costs, financing, and water and sewer rules that slow construction of duplexes and triplexes.
Updated on Nov. 5, 2026 in Utilities
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Olympia Planning Director Nicole Floyd told the Olympia Planning Commission that middle housing development is hindered by land costs, financing, and infrastructure rules. City staff are drafting proposed amendments to the Olympia Municipal Code and engineering standards covering middle housing infrastructure.
Why it matters
The city recorded 341 housing units as of September 2026 against a comprehensive plan target of 14,295 units by 2045, so the gap between current construction and long-range goals is a concern for local residents and builders. Changes to infrastructure rules could affect how many homes can be built on individual lots in Olympia.
Olympia's comprehensive plan requires about 715 housing units per year to reach 14,295 units by 2045, while the city recorded 341 units through September 2026. The city has received only one application for a property with two accessory dwelling units, and it is unclear how many additional applications will follow the proposed code changes.
The players
Nicole Floyd
Olympia's planning director, who presented the middle housing infrastructure policy to the planning commission and oversees city planning efforts.
Olympia Planning Commission
The city body that reviews land use and development policy and will consider the proposed middle housing code amendments.
The details
Floyd said high land costs, limited developable land, and financing challenges continue to hinder middle housing, which includes duplexes, triplexes, and other small-scale multifamily homes. City planners are considering a requirement to separate water and sewer connections for each unit, since retrofitting connections later is cost prohibitive.
Timeline
2018: The city recorded 555 housing units, its strongest year in the data.
Monday, Nov. 2, 2026: Floyd presented middle housing infrastructure policy to the planning commission.
September 2026: The city recorded 341 housing units year to date.
2027: Proposed code amendments could come before the planning commission.
2045: Target year for the comprehensive plan's 14,295 housing units.
Market Landscape
The Washington Legislature has adopted 76 housing-related bills over the past seven years, including a state cap limiting accessory dwelling unit impact fees to 50 percent of the principal unit fee. Olympia's proposed changes follow this statewide push to expand housing types, though local infrastructure requirements remain a separate obstacle.
Homeowners and builders in low-density zones may face new infrastructure requirements, such as separate water and sewer connections for each unit, that affect project costs. Residents considering adding an accessory dwelling unit should note that state law caps related impact fees at 50 percent of the principal unit's fee.
The takeaway
Infrastructure rules and land costs, not zoning alone, now determine how many middle housing units Olympia can realistically add to meet its 2045 target.
What happens next
The proposed amendments to the Olympia Municipal Code and engineering standards could come before the planning commission in 2027.
Further reading
Explore more on Utilities to see how water and sewer infrastructure shapes Olympia's housing development.
Source note: This article includes information reported by - The JOLT News Organization, A 501(c)(3) Nonprofit Organization.
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