Accessory Dwelling Units are being piloted, providing additional housing for those in need.

For many decades, west Denver neighborhoods were the place where working-class families could achieve the American dream of homeownership. Those who endured the foreclosure crisis of 2009 were rewarded with rising home values because of Denver’s steady population growth and decline in the supply of housing. What seemed like a positive, post-recession rebound became change that rapidly left many of the area’s moderate and low-income residents behind and continues to threaten neighborhood stability. 

Property taxes have tripled since 2009, rent has quadrupled and real estate transactions have led to 13,000 families  with children leaving west Denver. The percentage of renters who can buy a home in west Denver has dropped significantly to only 13%. 

Changes in housing values, property taxes and the impacts of COVID-19 have created a range of community responses both immediate and long term. Residents are taking in families and neighbors who can no longer afford high rents. One-in-two households in west Denver are doubled up, meaning that as many as 10,000 families have an additional adult or family living in their home. 

The need for additional affordable housing is elevating “housing” as a top issue for residents who are focusing on equity and quality of life in current neighborhood plans. Opportunity has changed, but increasingly families are working to minimize involuntary displacement and saying “yes” to a historic tool that has promise for west Denver. Accessory Dwelling Units (ADUs) have emerged as a popular grassroots housing tool because they are locally controlled, provide flexibility and benefit both homeowners and renters. 

ADUs, sometimes known as granny flats, casitas or mother-in-law suites, are paired with a single-family home. In Denver, ADUs are a separate residential unit that is allowed within a house in a basement or attic (attached ADU) or located separately on the back third of a single-family residential lot (detached ADU). Historically, ADUs were integrated into many neighborhoods of Denver and grandfathered as an allowed use until it was made possible for new ADUs to be built during a zoning code rewrite in 2010. Unfortunately, between 2010 and 2018, the broad lack of awareness, complex ADU standards and limited polit-ical will to incentivize and support ADUs means very few new ADU units have been built throughout Denver, despite the lack of new housing.

Benefits of the local ADU program

Following years of intense housing pressures and displacement in the area, the West Denver Renaissance Collaborative  (WDRC) in 2019 launched the Single-Family Plus (WDSF+) Accessory Dwelling Unit Pilot Program as a community-responsive solution to encourage qualified low- and moderate-income homeowners to build detached ADUs in nine west Denver neighborhoods. The ADU pilot program was designed and funded with four goals: To stabilize homeowners and minimize displacement; provide wealth-building opportunity; create new long-term affordable units; and promote equitable access to ADU zoning and development by offering support and incentives that simplify design, financing and construction of ADUs in exchange for long-term affordability.

WDRC’s work began with an educational and awareness campaign that included an ADU Handbook on the benefits and requirements of developing an ADU. The pilot program provides technical assistance with design, permitting and construction services that make ADU development possible for busy homeowners. The partnership and package of services set a modest range of requirements for 25 years that either the homeowner or the ADU resident have an initial income at or below 80% of the area median income (AMI), that annual rent not exceed 80% of the maximum rent and that the unit be utilized for residential use and not short-term rentals. 

The pilot program is available to homeowners of any income who are currently zoned for ADUs in west Denver. Their residential lot must meet Denver zoning requirements, including minimum lot size, and an ADU cannot exceed the maximum building coverage for that zone. 

The pilot program provides the following services with several critical partners:

• Site predevelopment and bridge funding for initial site costs 
• Certified housing counseling to evaluate financing and feasibility
• Access to financing with local ADU-focused lenders
• Cost estimating
• Architecture services and pre-designed ADU models (seven models with varying sizes from studio to three bedrooms) 
• Site planning, final design submittal preparation and permitting
• ADU construction with Habitat for Humanity
• Property management training 

Launched in 2019, the ADU pilot program was on track to begin construction in 2020 until the pandemic halted progress and created uncertainty for many of the first participants. Instead, 2020 became a year of pivots and strategic program refinements. Development picked back up in 2021 and, to date, five ADUs are complete, five are in construction, seven are in final design and permitting, and three to five are in housing counseling to evaluate if they can move into construction. Most participant homeowners (83%) in the pilot program in 2021 identify as households of color, 25% are female heads of household and 100% are building their ADU to house family. 

Rising construction costs, supply chain disruptions, increasing cost of living and rising interest rates are slowing construction and reducing the number of ready and qualified homeowners. Projected units in development for 2022 are down, but the number of homeowners seeking housing solutions and readying themselves for ADU construction is steady. WDRC, DHA and partners are working on getting the word out to eligible homeowners and on financing solutions that leverage federal, state and local funds.

Residents in west Denver have said “yes” to ADUs, and in May 2022, the Council District office was successful in legislatively rezoning 3,200 properties across three neighborhoods to expand ADU zoning. Extensive outreach led by the district office to residents, neighborhood associations and local organizations resulted in 83% of survey respondents supporting the rezoning. Many letters and emails identified barriers to ADUs and highlighted the benefits, including the family flexibility of ADUs, opportunity to build on their property, potential stabilizing impact on the homeowner and neighborhood benefit of additional units on existing lots while utilizing existing infrastructure. Residents, elected officials and the partners of the ADU Pilot Program continue work to remove barriers to building ADUs and to expand access to ADU development to help residents stay in place. 

 

Renee Martinez-Stone is the Director of the Planning & Data department at the Denver Housing Authority.