Accessory dwelling units, or ADUs, may have gotten easier to build and own in west Denver.
City Council approved the final reading Monday night of an ordinance that would extend and increase a subsidy loan for someone willing to build an ADU through the West Denver Single Family Plus pilot program.
An ADU is a small backyard home that goes by plenty of names — mother-in-law suite, casita, carriage house.
Renee Martinez-Stone, director of the West Denver Renaissance Collaborative which runs the program, said they assist homeowners with developing, designing, financing and constructing detached ADUs, which are built by Habitat for Humanity.
Before Monday, homeowners who made 80 percent of the area median income could be approved for a $25,000 forgivable loan from the city through West Denver Single Family Plus. Homeowners also qualified for the loan if they rented out their ADU to a tenant who also made less than 80 percent of the area median income.
The city funding was set to expire in January 2021. Martinez-Stone said the pandemic threw a wrench in the program’s plans, so the city was asked to extend the funding. And they did. The funding is set to expire December 2022, and the loan was increased to $30,000.
City Council also took away the area median income requirement for the loan. Now, if a person makes 81 percent of the median income or more, they must rent to someone in the 80 percent or less range to qualify. If the homeowner makes 80 percent and under, the tenant isn’t required to have a specific income.
The West Denver Single Family Plus pilot program is aimed toward moderate- and low-income homeowners in nine west Denver neighborhoods, including Athmar Park, Barnum/Barnum West, La Alma/Lincoln Park, Sun Valley, Valverde, Villa Park, West Colfax and Westwood.
Martinez-Stone said the pilot focuses on west Denver because the area has “experienced significant displacement from rising housing costs.”
“Wages are not keeping pace with these rising costs, so a lot of homeowners are not stable,” Martinez-Stone said. “They don’t see themselves being able to hold on to their home… This is a way to help them invest in their property.”
She adds that ADUs promote intergenerational wealth for minority communities and low-income families.
West Denver Single Family Plus offers five types of ADUs: studio, one bedroom, small two-bedroom, large two-bedroom and a three-bedroom. Those units range in cost from $120,000 to $200,000.
Martinez-Stone said she hopes ADUs can become more available and accessible throughout Denver. Besides affording an ADU, homeowners also have to be in a properly zoned area. She said she’s received calls from other districts looking into rezoning areas for ADUs.
“There’s so much promise in creating awareness of ADUs for a lot of homeowners who are in neighborhoods that are vulnerable to gentrification,” Martinez-Stone said. “I think they’re an asset anywhere in the city because they create new housing and that’s what the city needs.”
Correction: A previous version of this story misstated the area’s new median income threshold to receive city funding.