Seattle's Backyard Cottages Program was highlighted in a recent USA Today article.
"The point is not just to allow the cottages, but to encourage them. 'I want to preserve rural areas around Seattle, and I don't want the suburbs continuing to march on without any limits. One way to do that is to add more density to these inner-city neighborhoods,' says Stoeck, 47, an architect."
Here's a little video about BYCs:
Accessory Dwelling Units (ADUs) are an affordable type of infill housing. They are small, include a bedroom, kitchen and bathroom, and can be either attached or detached from the main house on the property.