Aug 6, 2021 - Real Estate

How ADUs could help chip away at Denver's affordable housing crisis

Data: Denver's Community Planning and Development Department; Chart: Alayna Alvarez/Axios

Denver City Council member Amanda Sandoval is blazing a new path in the name of affordable housing.

Driving the news: This upcoming Monday, the City Council is expected to approve Sandoval's ordinance to rezone all of Sloan's Lake, along with six properties in West Colfax, to allow accessory dwelling units (also known as granny flats, carriage houses, in-law suites and casitas).

Why it matters: Affordable housing is hard to come by in Denver, a city that ranks among the top fastest-gentrifying metros in the country and whose median single-family home sale price was $600,000 in July.

  • But Sandoval and other proponents, including the city's development department, tell Axios ADUs act as a wealth-building tool for low- and moderate-income homeowners and a way to add housing options to neighborhoods without significantly changing existing character.
  • Plus: By rezoning neighborhoods in blanket fashion, homeowners are able to forgo the roughly $1,000 cost that comes with a request for rezoning their individual property.

How it works: ADUs are small housing structures that share a lot with a traditional, single-family home.

  • They can be constructed as a stand-alone structure in a homeowner's backyard, an attachment on top of a two-car garage or as part of a basement.
  • While the extra space can be used to put up guests and relatives, the potential to bring in short-term and long-term paying tenants can boost homeowners' bottom line.

State of play: Although city data shows demand for ADU permits have increased over the last decade, high construction costs of more than $200,000 — coupled with the stress of navigating the city's permitting process — are likely deterring more applicants, city officials tell Axios.

  • What's more, many homeowners seeking ADU rezonings have been met with opposition from neighbors.
  • Those against ADUs primarily fear large-scale development, scarce parking due to more people or an unrecognizable neighborhood, Sandoval's land planner Naomi Grunditz tells Axios.

What to watch: More council members — including Jamie Torres, Amanda Sawyer and Chris Herndon — have expressed interest in following Sandoval's lead to implement neighborhood-wide rezonings in their own districts.

  • Torres, who represents West Denver, is currently exploring rezoning plans for at least three neighborhoods within District 3, including Villa Park, Barnum and Barnum West, she tells Axios.

The big picture: Although Sandoval says she's been asked by council members to pursue a citywide rezoning to allow ADUs, the task remains too burdensome to carry alone.

  • But she's open to taking on the project if another member, particularly an at-large representative, teams up with her, she told Axios.

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