Part 2: Why Aren’t More Accessory Dwelling Units (ADUs) Being Built?
This is the second installment of my monthly series about one of the hottest topics in real estate: Accessory Dwelling Units. ADUs have gotten a lot of attention recently as a housing option. My thanks to John Phillips of Verdant Living for helping on the research for it.
ADUs – accessory or additional dwelling units, also called granny flats — are a wonderful idea. They use an existing piece of residential real estate and create a separate living space. They are often used for intergenerational housing (aging parents, adult children just starting out, etc.) and have long-term value as rental property and add to the value of your real estate. But very few have been built in Colorado. The experience in the City of Denver is instructive. I have been told that since June 2015 the city has issued 528 ADU permits, of which 418 have received Certificates of Occupancy. There are thousands of possible sites. There are no easily attainable totals for areas outside Denver, but there are a few ADUs scattered around the suburbs, and there must be tens of thousands of possible sites.
the preferred option. But times have changed.
quickly baffles the typical homeowner.
Now, land in urban areas is scarce (thus more expensive), homes are more expensive to build and aren’t as available, and smaller living spaces in closer proximity to others is more acceptable, often preferred. Zoning was a big hurdle. In Denver, applications for variance were rarely denied, but the variance process could take months and was expensive.
However, that is not the problem it once was. Laws have been passed that override local zoning regulations; Colorado did that last year, and that law takes effect this July.
That has opened the door, but there is a long way to go. Most homeowners have never even heard of ADUs, much less thought of how building an ADU might address their needs. This series is a small attempt to address that education gap.
Other impediments:
Other local regulations and rules
Cost. The amount of money needed, even for the least expensive ADUs, is not trivial for most homeowners. It exceeds the purchase of a car or the cost of a tiny home, and many don’t understand why.
Finance. Beyond the raw cost, financing an ADU can be a challenge. Most lenders (but not our Wendy Renee, below) are not yet comfortable with the dynamics, and there are few lenders actively doing it. Call Wendy!
Time. The time between signing a contract to build an ADU and receiving a certificate of occupancy could be a year (and often longer). Before you get to the contract phase, investigation of options and selecting a vendor takes even more time. Sometimes a homeowner who wants an ADU has an immediate need, and the timelines may not match.
Alert! Kol Peterson, a recognized authority on ADUs, is holding an ADU Academy in Denver on June 13 Visit https://www.aduspecialist.org/ aduacademy for more information.
works against widespread adoption. They are “gentle density,” one here, one there. They are rarely installed at multiple residences close to each other. The impact, such as traffic, on a particular neighborhood is minimal. They don’t change the character of the neighborhood, but individual homeowners must have the need and desire.
Most have little experience with a construction project, understand how to research the options, are willing to turn their backyard into a construction site, and, especially for homeowners of moderate means, able to take on the risk and responsibility of a second mortgage (or make the necessary decisions). The whole thing is not part of their perspective.
So, one might ask, why aren’t more ADUs being built?
For many years, they were discouraged by the restrictive zoning regulations of local governments. That made a lot of sense when land was relatively inexpensive, housing was generally affordable, and single-family residences were
Some of these are hangovers from the anti-ADU sentiment, but many are necessary to ensure the quality and safety of the dwelling as well as it being an acceptable addition to the community. These range from soil testing, setbacks, size limitations, parking, utility fees, construction inspections, and more. These sorts of things are dealt with as a matter of course by builders of multi-family buildings and main residences, but the complexity
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Market awareness. As mentioned above, most potential purchasers of ADUs are unaware of the opportunity. That education is happening, slowly.
Vendors. In Colorado the cottage industry of ADU vendors and other service providers is only now developing. It exists but is small, hard to find (and vet), and doesn’t have a broad community presence.
All these factors are self reinforcing and limit the development of ADUs. And there is another factor at work. The very nature of ADUs which makes them such a terrific addition to the housing stock,
To help with these issues Verdant Living has published a buyer’s guide, BuyersGuideColoradoADUs.com. A good place to begin is the Verdant Living website, VerdantLiving.us, or just contact John Phillips at 303-717-1962
I want to thank John and the following people for their input: Gary Fleisher, Modular Home Source; Kol Peterson, Accessory Dwelling Strategies, Renee Martinez-Stone, Denver Housing Authority and West Denver Renaissance Collaborative, and Eric Scott, TinyMod. Next month: Financing an ADU
View All our Active & Pending Listings on a Single Website
Instead of having a different website for each listing, we now link them to a single site, www. GRElistings.com. The QR code at right will open that site up on your smartphone.
We pride ourselves on the thoroughness of our listings. We complete all the data fields in the MLS, not just the mandatory ones, so you’ll find measurements and descriptions for each room, as well as narrated video tours which simulate an actual showing.
Room dimensions and descriptions are not required, and you’d be amazed how few
agents bother to enter that information on their MLS listings. Of course, narrated video tours are not required either, and most “video tours” you see on other brokerages’ listings are really just slide shows with a music track. We have sold many of our own listings, including one that closes next week, to buyers who haven’t seen the home in person until they fly in for the inspection. The video tour gives them enough of a sense of what the listing is like to ask me or their agent write up an offer and go under contract for it.
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Planned Pethood International (PPI) joined forces with IMHS in 2023. PPI has plans to build a new modern, pet friendly facility at their location at Conifer Crossing to replace the former shelter at the Old Log Building in Pine Junction. We are excited to continue helping homeless pets in the community. While the proceeds from the future sale will help, we are looking for donations to get the ball rolling sooner. Please donate at: https://gofund.me/7e349bfb
1. ANIMAL KINGDOM: What are male bees called?
2. TELEVISION: Which TV streaming network plans to host a new series based on the “Harry Potter” books?
3. GENERAL KNOWLEDGE: How many months have 31 days?
4. U.S. PRESIDENTS: Who was the rst president to appear on television?
5. MATH: What is the Roman numeral MMXXV in Arabic numbers?
6. MOVIES: What is the name of the spaceship in the movie “Alien”?
7. LITERATURE: “Nicholas Nickleby” is a novel written by which author?
8. AD SLOGANS: Which airline uses the slogan “Fly the Friendly Skies”?
9. ACRONYMS: What phrase does the real estate acronym DTI stand for?
10. FOOD & DRINK: What are the seeds of a pomegranate called?
TrIVIa
Answers
1. Drones.
2. HBO Max.
3. Seven: January, March, May, July, August, October and December.
4. Franklin D. Roosevelt.
5. 2025.
6. Nostromo.
7. Charles Dickens.
8. United Airlines.
9. Debt-to-income ratio.
10. Arils.
(c) 2025 King Features Synd., Inc.
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