Christy Silva started her business because of her great-great-grandparents, who migrated from Italy to north Denver in the late 1800s and established two generational homes with a $1,200 investment.
That, of course, couldn’t happen today, at least not for $1,200. As proof, her great-great-grandparents’ houses have since been sold, scrapped and rebuilt into a single home that sold for $1.2 million in 2023.
Silva is the founder and co-owner of Little Home Builder based in Firestone. Her business specializes in the same idea her great-great-grandparents once homesteaded: She and her crew design and build accessory dwelling units (ADUs), which are self-contained living spaces on the same property as a traditional residential home.
She focuses her ethos on young people and their struggle to plant meaningful roots in Colorado because of the high, even unattainable, cost of owning a home.
“We’ve come to the tough conclusion that our own children and other young professionals probably won’t be able to afford to live here unless we start to create additional housing options that are more in line with national averages,” Silva writes on her website.
ADUs are also for older folks. In fact, they are often referred to as mother-in-law suites or granny flats. Silva says about 90 percent of her clients build an ADU as a place for their parents to age in place.
Regardless of who uses them, ADUs surfaced in recent years as a popular option to help ease Colorado’s housing crisis, prompting state lawmakers to pass Colorado House Bill 24-1152 last year. The new law went into effect June 30 and requires Colorado cities and towns—but not entire counties—to allow the construction of ADUs anywhere single residential homes are allowed.
In general, the law makes it more likely that a resident of a single-family home is not restricted from building an ADU due to local zoning codes, planning officials say. As Colorado cities and towns shore up their codes to ensure they align with the new law, here’s what Northern Colorado residents need to know if they hope to take advantage.
Accessory dwelling unit designed and built by Little Home Builder.
What are the rules?
Most of the changes coming through the new law are an effort to keep cities and towns from putting too many requirements on new ADUs, according to an overview posted by the Colorado Department of Local Affairs.
For example, Fort Collins used to only allow ADUs in Old Town and a few newer neighborhoods, says Clay Frickey, planning manager for the City of Fort Collins. Now the city’s land use code allows for ADUs in other places, such as more traditional neighborhoods that were originally zoned for low-density housing, he says.
The new state law requires localities to accept ADU sizes that are between 500 and 750 square feet, and they must allow ADUs as attached, detached or internal structures, according to the Colorado Department of Local Affairs. They are not allowed to require an additional parking space to be constructed for the ADU (with a couple of exceptions) or to have more restrictive standards for the architectural style, building material and landscaping than the single-family home on the same lot.
Similarly, no homeowners association can outright ban ADUs, though they can require the same standards and conditions that they mandate for other buildings in their communities, according to the state. However, cities and towns can prevent residents from using their ADUs as short-term rentals, such as renting them on Airbnb, if they choose.
Residents who are interested in building an ADU should reach out to their local planning department to learn about requirements specific to their city or town, including the kinds of permits they will need and the costs, says Kerri Burchett, principal planner for the City of Loveland. For example, ADU sizes in Loveland are capped at 900 square feet rather than the state standard of 750 square feet, Burchett says. If the lot size exceeds 10,000 square feet, Loveland will allow an ADU that is up to 50 percent of the size of the main house, she says.
“While I think we’re all starting out with this base from the house bill, everybody’s rules are a little bit different, and everyone’s fees are a little bit different,” Burchett says.
In Fort Collins, those looking to build an ADU inside their existing home will want to educate themselves on the city’s building code, Frickey says. For two separate units in one building, the city requires the use of fire-resistant materials and other barriers, which can sometimes complicate that kind of project or drive up the cost, he says.
The state law applies only to Colorado municipalities, meaning that residents in unincorporated parts of Larimer and Weld counties shouldn’t count on the same kinds of guarantees. Both counties allow for ADUs, but their permitting and restrictions may still differ from the state law.
Why should you build an ADU?
More older residents are going the ADU route instead of moving into a condo or another housing option due to the sheer cost of housing and high interest rates, Silva says.
“I think people in Colorado are finding it’s tough to downsize here right now,” she says.
ADUs also offer the opportunity to make downsized housing more accessible for things like a wheelchair or a walker, she says.
Others seek out an ADU because their kids are unable to find housing as young adults, Silva says. Her clients have created a number of arrangements to make that work, such as the parents downsizing into an ADU and renting the larger home to their kids.
Silva says homeowners don’t need to restrict the use of an ADU to multigenerational living. Some clients are finding success in renting their units in the short or long term if their locality allows it. Others build the extra space for their hobbies or as a separate office, she says. One of her clients is in the process of building a golf simulator and a gym.
“They just want that extra building where they can go work out or play, have recreation time or host a party,” Silva says.
Accessory dwelling unit designed and built by Little Home Builder. Photo by Boxwood Photos.
What should you consider before building an ADU?
Inquiries about building an ADU have become the number-one phone call Frickey gets from residents. But so far, he says that hasn’t translated to more ADUs built in the city.
“They go and start to get quotes for building an ADU, and it’s really, really expensive,” he says.
He has heard Realtors quote the cost of an ADU as high as $500 per square foot, which would bring construction costs alone for an 800-square-foot ADU to $400,000. That doesn’t include review and capital expansion fees that must be paid to the city. In Fort Collins, Frickey says that cost is usually somewhere around $30,000.
However, Silva says her business can build an ADU at a lower price point. Her team has built detached ADUs for as little as $180,000 and hasn’t exceeded $320,000. Residents who use existing space, such as remodeling a garage, can do it for even less, she says.
Silva says her smallest, most efficient prototype is the most popular. It fits an open living room, kitchen space, bedroom and bathroom into about 475 square feet at a price point of around $200,000.
In addition to figuring out how to finance an ADU project, Silva says residents should consider the size of their lot, which can restrict ADUs larger than 750 square feet in some jurisdictions. They also need to consider how construction crews will access the yard. Sometimes that means moving the structure closer or farther away from the main house than residents originally planned, she says.
Other than that, Silva reminds clients that they are playing the long game. Maybe the unit will be used for a family member in the short term, but they should add the amenities that will be needed if that person moves out and the ADU transitions into a rental, for example.
“There are so many flexible ways to take advantage of it,” Silva says of the ADU. “Use it throughout the course of different stages of life.”
