Opinion: If Colorado ties the knot with ADU zoning, the real work lies ahead

The one-bedroom above garage unit is 24' by 24'.A plan for a one-bedroom unit above a two-car garage includes exterior stairs and is 576 square feet. Like the small two-bedroom unit, the one-bedroom plan is 576 square feet but provides more living room/kitchen space.

Because any good union should be evaluated on how many Coloradans struggling with housing affordability are helped. As a fellow for The Bell Policy Center, I recently completed a first-ever analysis of ADUs. I found that in 32 of the largest Colorado cities covered by pending legislation, 19 are already allowing ADUs, but most at rates below peers who’ve reformed zoning. Many others have no ADU zoning or the zoning rules are so restrictive they are almost unusable.

New Hampshire passed less stringent ADU zoning legislation but has had unexpectedly strong outcomes from a sample of cities with permit data. Their success has been attributed to larger homes, higher median income, and a higher rate of older homeowners, some of whom move into an ADU they financed to be near grandkids in the main house. These indicators point to market ADUs as an important choice for a modest percentage of Colorado seniors with adequate means.

Based on rents in other states with ADU reforms and Boulder, the “inherent” affordability of ADUs is likely for those earning around 80% of Area Median Income . That’s two people earning around $62,000 in Colorado Springs, $72,000 in Fort Collins, or around $76,000 in metro Denver/Boulder. Affordable rents for those incomes would range from $1,300 in Mesa County to just below $1,800 in metro Denver for one bedroom.

As a former city council member, I’m sympathetic to the concerns of local government officials about the state’s sweeping approach. For example, they worry ADUs will just be rented short-term in our tourism-dominant state. Many Denver homeowners have relied on short-term rentals to pay back exorbitant ADU construction costs in the absence of more affordable financing. However statewide policy brings leverage to create better financing pathways that city-by-city approaches don’t.

And no one relationship can fulfill all needs. Colorado needs many other housing strategies to address affordability. A multi-family building of fifty, a hundred or more apartments or condos can be built in about the same time it takes to build two ADUs.

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