Colorado could spend $18 million — and use a controversial legal power — to get ADUs built

Kevin J. Beaty/Denverite
A prefab ADU and garage installed behind Simple Homes co-founder and COO David Schultz, July 9, 2019.

Dozens of Colorado cities would have to allow the construction of auxiliary dwelling units (ADUs) under a bill proposed by state lawmakers.

ADUs, also known as “granny flats,” are small, freestanding residences built alongside an existing home on a property. They are already allowed in numerous Colorado cities, such as Denver, Golden, and Lakewood.

The new state bill, HB24-1152, would force more cities to follow suit, and it would spend $18 million to support ADU construction.

“People should be able to have an aging parent live with them, or a disabled child, or should be able to monetize some extra space in order to maybe stay in their home,” said Rep. Judy Amabile, a Boulder Democrat who is cosponsoring the measure.

The idea already faces resistance from some municipal leaders, who don’t want the state to override local development rules.

The bill would mandate changes in some — but not all — cities in Colorado. Its requirements would apply only to certain cities that have more than 1,000 residents and fall within a  metropolitan planning organization — which would include dozens of cities along the Front Range as well as around Grand Junction. The mandates also would apply to some census-designated places in those areas.

“We're not going to have arbitrary regulations stop some of those from being built,” said Sen. Kyle Mullica of Adams County, a Democratic sponsor for the measure. The measure is also cosponsored by Democratic Sen. Tony Exum of Colorado Springs and Republican Rep. Ron Weinberg of Loveland.

In the affected areas, the following rules would apply:

  • ADUs would largely be allowed on all the same properties as single-family homes
  • Cities can’t require new parking to be built alongside ADUs
  • Cities must allow ADUs to range from 500 square feet to 800 square feet
  • ADUs would be approved as long as they meet objective standards — with no requirement for review by elected officials and public hearings
  • ADUs could still be subject to rules in local historic districts

Kevin Bommer, executive director of the Colorado Municipal League, said the state should not be forcing new development rules on cities. 

Instead, it should play its “proper role of assisting local governments that wanted to take the significant time and investment to craft locally appropriate ordinances,” Bommer said.

CML is currently in opposition to the measure. The measure is likely to draw opposition from some residents of the affected cities. In Fort Collins, city leaders authorized the construction of ADUs across much of the city — but repealed the measure amid backlash. The prospect of “granny flats” drew familiar concerns about both practical and intangible impacts.

"Many older areas without [homeowners’ associations] are the primary target for ADUs. How will additional units impact already stressed sewer lines, water pressure issues, parking, and traffic congestion?” one commentator wrote to the Coloradoan.

The proposal would also make millions available to help cities and homeowners get ADUs built through two new programs. One program would provide $10 million to help cities accommodate ADUs. Local governments could use that money to offer discounts on fees for ADU projects or to develop pre-approved ADU plans, among other possibilities.

Meanwhile, another $8 million would be spent to provide low-cost loans and down-payment assistance for people who want to build an ADU. That could help ease the steep cost of ADU construction, which can average $300,000. 

Sen. Tony Exum, another Democratic sponsor of the measure, argued that ADUs could be especially helpful for seniors, who could turn the rentals into a new revenue stream

“It helps build a community, and we just need more options,” he said.

It’s unclear just how big of a role ADUs could play in easing the housing shortage. In Denver, fewer than 400 of the units have been permitted and built since 2016, according to BusinessDen — in a city of more than 700,000 people.

A similar measure was proposed last year as part of a sprawling housing proposal, but that measure failed among Democratic discord and objections from local governments.