By Tony Smith, SJJ Law
Accessory Dwelling Units (ADUs), affectionately known as granny flats, in-law suites, or backyard cottages, are the talk of Colorado – because, really, who wouldn't want their backyard to double as a thriving metropolis?
As the state wrestles with an affordable housing crisis, ADUs are strutting onto the scene like knights in shining (albeit slightly cramped) armor, promising to expand housing options. However, recent legislative changes aimed at making ADUs more common are causing quite a stir, especially among homeowners associations (HOAs), which generally prefer to keep their neighborhoods as uniform as a closet full of freshly pressed khakis.
What Are ADUs, and Why Are They Important?
ADUs are secondary housing units that cozy up to the original home. They come in various forms, from detached structures to surprisingly stylish converted garages or basement apartments. ADUs serve up a smorgasbord of benefits – they allow homeowners to earn rental income and keep family members close (regardless of whether you may want them there).
Recognizing these perks, Colorado passed new laws to make ADU construction easier. These laws sweep aside certain local zoning restrictions that previously treated ADUs like second class citizens, thereby signaling the state's commitment to tackling housing shortages, one backyard at a time.
Key Provisions of the New ADU Laws
Thanks to the new laws, which go into effect June 30, 2025, municipalities and counties must now roll out the welcome mat for ADUs in most residential zones. While local governments can still insist on aesthetic niceties and parking requirements, outright bans are as outdated as disco. Moreover, the legislation turns the permit approval process from a nail-biting saga into a more reasonable one-act play and chops excessive fees, which were previously about as welcome as a surprise tax audit.
How Do These Changes Affect HOAs?
The new law applies to HOA communities consisting of “Single-Unit Detached Dwellings,” which is defined as “a detached building with a single dwelling on a single lot.” So, it does not apply to condominium buildings or townhome communities with party walls.
Traditionally, many HOAs in Colorado have taken a hard stance against ADUs, citing potential risks like heightened traffic, parking Armageddon, and the terrifying threat of fluctuating property values. Yet now, the new laws render ineffectual provisions in the HOA governing documents and rules that looks ADUs in the eye and say "not in my backyard!" These changes, however, are not universal throughout Colorado and instead apply only in “subject jurisdictions” as defined in HB24-1152.
Most notably, these laws yank some of the power from HOAs to veto ADUs. This change has raised eyebrows and voices among HOA communities, as it could potentially disrupt the uniformity these associations aim to preserve.
For HOAs subject to the new ADU law, this means breaking out their governing documents (perhaps dusting off some cobwebs) and making sure they align with state law. While HOAs can still insist on rules that are reasonable, like ensuring new structures don't resemble UFO landing pads, they can no longer simply deny requests to build ADUs.
Challenges and Opportunities for HOAs
The legislative shake-up brings both headaches and hallelujahs for HOAs. On one hand, balancing homeowners' desires for ADUs with neighborhood harmony might feel like juggling flaming torches while riding a unicycle. On the other, seeing ADUs as partners in solving the housing crisis could polish a community's image.
To ride this wave, HOAs subject to the law should consider drafting policies that are the Goldilocks of guidelines – neither too strict nor too lenient, but just right. This entails setting parameters for ADU placements, insisting that they resemble the existing homes, and managing the nitty-gritty of shared utilities. Open communication with homeowners about these rules is crucial—after all, no one likes feeling like they're playing a game where someone changed the rules and didn't tell them.
HOAs would be wise to consult legal counsel to retouch their documents to avoid potential clashes with newly minted state laws. Boards should be ready for an avalanche of inquiries regarding homeowners' newfound ADU rights and be poised with answers that don’t start with "um."
Conclusion
Colorado’s new ADU laws are shaking up housing policy like a snow globe, promoting flexibility and inclusivity in zoning that scoffs at boundaries. For HOAs subject to the new laws, these shifts serve up a cocktail of challenges with a side of opportunities, both of which must be gulped down to adapt and evolve. Proactively tackling the law's implications enables HOAs to maintain community standards while jumping on the state’s bandwagon toward alleviating housing woes.
As these regulations set root, ongoing tête-à-tête among HOAs, homeowners, and local authorities will be crucial for a smooth transition, like a well-oiled machine or a perfectly executed dance routine. With careful planning and a sprinkle of cooperation, HOAs can effectively integrate ADUs into their communities while keeping their respective essences (whatever those might be) that make them desirable places to live.
Tony Smith is one of the founding partners of SJJ Law and the chair of its Community Association practice group. Tony and SJJ Law are proud to provide a wide range of legal services to HOA clients throughout Colorado.
