Can I build an ADU on my Property?

Photo Credit to Colorado Department of Local Affairs, Division of Local Government

The Colorado Legislature passed House Bill 24-1152 in 2024, requiring certain municipalities within the State of Colorado to allow one Accessory Dwelling Unit (ADU) on all properties where single-unit detached dwellings are allowed. These municipalities must be compliant with this Bill by June 30, 2025. This Bill has created a great opportunity for property owners to be able to build ADUs on their property.

So what qualifies as an ADU? The Bill outlines that an ADU can be detached, attached, attached above the garage, in the basement, a conversion of a garage to an ADU, or even an upper floor ADU. The photo above reflects the various styles of ADUs permitted under House Bill 24-1152.  

The municipalities which the Bill requires to permit ADUs are called “Subject Jurisdictions”. Subject Jurisdiction include:

• Colorado Home Rule or statutory cities and towns, Territorial Charter cities and towns, and consolidated cities and counties, that are within a Metropolitan Planning Organization and have a population of 1,000 or more as reported by the State Demography Office; and

• Those portions of Colorado counties, including Home Rule counties, that are within a Metropolitan Planning Organization and within a Census Designated Place with a population of 40,000 or more as reported in the most recent federal decennial Census.

Any municipality that is not a Subjection Jurisdiction may voluntarily comply with the Bill and in doing so, also become eligible for the ADU Fee Reduction and Encouragement grant program.

Importantly, subject jurisdictions and municipalities that have voluntarily complied with the Bill must create an Administrative Approval Process for ADUs that does not include a public hearing.

What Western Slope communities are subject to the terms of this Bill? As of right now, only the City of Grand Junction, the City of Palisade and the City of Fruita are subject to this Bill.

So what if my neighborhood is controlled by an HOA? It is very important to note that, in jurisdictions where the Bill is in effect, no restrictive declarations, bylaws, or rules of an HOA can prevent ADUs. However, HOAs are still allowed to apply “Reasonable Restrictions” on ADUs. CCIOA was also updated, via SB24-174, to reflect HOA’s inability to adopt new regulations that prohibit or restrict the construction of ADUs if the zoning laws of the local jurisdiction would otherwise allow ADUs.

So why would I want to build an ADU on my property?

·         Significantly increase your property value.

·         Boosts homeowner income and financial stability by generating rental income.

·         Supports multi-generational living by housing adult children or aging parents nearby.

Cities also benefit by encouraging ADUs:

·         Expands affordable housing supply by providing lower-cost rental options for students, seniors, and low-income residents

·         Increases housing diversity and density without changing neighborhood character

·         Stimulates local economy by creating construction and remodeling jobs

·         Increases property values and thereby, property taxes

Written by Associate Attorney Rachel Awalt