Revolutionizing · Modernizing · Simplifying
Revolutionizing · Modernizing · Simplifying
Look at your backyard right now. That patch of grass Hayley keeps threatening to turn into a raised garden bed. As of December 16, 2024, the city says you can legally put a rental unit back there. Almost anywhere. On almost any single-family lot in Denver.
That is not a small change. That is a rewrite of what a Denver lot is worth.
Here is the thing most people missed while it was happening. The state passed HB24-1152 back in 2024, and it forced every municipality in Colorado to allow at least one accessory dwelling unit (ADU, or what your grandma would call an in-law suite) on any single-family or duplex-zoned lot. Not suggested. Required.
Before that, Denver only opened up about 15% of its residential land to ADUs. The rest was off limits. And plenty of smaller Colorado towns banned them outright. If you owned a place in the wrong zone, you were out of luck.
Then Denver wrote its own local ordinance to match the state law, and it took effect December 16, 2024. That is the date that matters. Here is what it did, all at once:
- ADUs are now allowed in every zone that permits a single-family home. - No minimum lot size. Gone. - No owner-occupancy requirement. You do not have to live on the property to rent out the ADU. - No parking required for the unit itself.
That owner-occupancy piece is the sleeper. Under the old rules in a lot of places, you had to actually live on site to rent out your backyard cottage. Now you can own the property, live in Boulder or Belmar or wherever, and rent both the main house and the ADU. That flips a single-family lot into a two-income property overnight.
I mean, this is the part people do not realize. The state law voided outright HOA bans on ADUs in the jurisdictions it covers, and Denver is one of them. It is codified at CRS 38-33.3-106.5 if you want to wave it at your HOA board meeting.
Now, your HOA can still make you match the aesthetic standards that already apply to your main house. So no wild lime-green cottage if the rest of the neighborhood is beige. But they can't just say no. Not anymore.
And the whole approval process has to be administrative only. No public hearings. That means your neighbor cannot show up to a hearing and torpedo your project because it blocks his afternoon sun. There is no hearing to show up to.
So this is where it gets real. A detached ADU in Denver is typically capped at 864 square feet, and the detached unit has to fit under Denver's roughly 35% lot coverage rule. So the size of your lot still matters for what you can build, even though there is no minimum to qualify.
Cost? Buckle up. Building one in Denver runs roughly
But a detached unit in a desirable neighborhood can pull in about
There is help out there too. The state runs the Colorado ADU Grant Program, ADUG for short, as pass-through funding through the Department of Local Affairs. And Denver has its own West Denver Single Family + ADU Pilot, which offers pre-approved plans and financing help through a Denver Housing Authority and Habitat for Humanity of Metro Denver partnership. The catch on that one is you commit to long-term affordable rent. Fair trade for a lot of folks.
Here is the honest part. Getting a permit takes time. Realistically 4 to 7 months from application to issuance. Denver Community Planning and Development is targeting a 180-day max for residential permits in 2026, but backlogs push that out. So do not plan your rental income around next month. Plan around next year.
Most people are still thinking about their house as one thing. One structure, one use, one value. What is actually happening right now is that Denver quietly turned nearly every single-family lot into a lot that can carry a second dwelling. That changes the math on what your backyard is worth and what a buyer will pay for it.
And this is not just a Denver story. About 67 jurisdictions across Colorado are 'subject jurisdictions' under this law, tied to the state's five metropolitan planning organizations, including the Denver Regional Council of Governments. So if you are out in the metro somewhere, odds are decent your town is in the same boat.
If you own a single-family lot in the city, this is worth your attention. Not because you have to build anything. But because the option itself now sits on your property, and options have value whether you use them or not.
So go look at that backyard again. It is not just grass anymore.