Many homes in Seattle have an ADU (Accessory Dwelling Unit), often referred to as a mother-in-law apartment, in the basement. The ADUs in older homes are often illegal because they are not remodeled to current building code, or they have not received a proper ADU building permit, or both. The City of Seattle has largely turned a blind eye to this because they just don't have the man-power to enforce it, and the reality is that cheap urban housing is scarce and desperately needed.
But the building codes are there for a reason, and many of them are safety related. Windows and window well requirements are a good example. The city has some very specific size requirement for these to help provide adequate egress in case of fire. Almost all of the older homes in Seattle with basements were built with small inaccessible windows at the top of the foundation areas above ground. These were really designed more for ventilation and light, since the basements were unfinished and not meant for living spaces.