Colorado landlords have more options for ADU development than they did just a few years ago, thanks to a 2024 state law that guarantees the right to build on most residential lots. An accessory dwelling unit (ADU) is a secondary housing unit on the same lot as a primary residence, known by many names: granny flat, in-law suite, backyard cottage, or carriage house. Landlords build them to add rental income, house family members, or increase property value. But knowing you can build is only the first step. The real numbers — size limits, setbacks, permit fees, and timelines — vary significantly by city and are worth understanding before you hire a designer.
What HB 24-1152 changed, and what it didn't
Before June 2024, only about 15% of Denver's residential land was open to ADU development, and many smaller municipalities banned them entirely. HB 24-1152 ended that: every municipality in Colorado must now allow at least one ADU on any single-family or duplex-zoned lot. No opt-outs, no grandfather clauses for existing bans.
What the law didn't do is standardize anything beyond that baseline. Cities kept full authority over design standards, maximum square footage, setbacks, permit fees, and inspection requirements. Owner-occupancy rules may still apply in some jurisdictions. The law also doesn't override HOA covenants, so if your property sits in a homeowners association, review those CC&Rs separately. The practical effect: you have a right to build, but you still have to build it their way. The full text of HB 24-1152 is available through the Colorado General Assembly.
Types of ADUs allowed in Colorado
Colorado property owners have three main paths:
- Attached ADUs: A new addition connected to the main home, such as a ground-floor suite or a converted garage with the interior door sealed off.
- Internal ADUs: Basement conversions, attic buildouts, or repurposed floor space within the existing structure. Some municipalities, including Golden, allow whole-floor internal conversions without a hard square footage cap.
- Detached ADUs: Freestanding structures in the backyard or on unused portions of the lot. These carry the strictest rules around setbacks, parking, and utility connections.
Detached units often trigger additional requirements: a separate address, dedicated parking, and sometimes a new driveway or dedicated utility meter. Build those costs into your budget from the start.
Size limits, setbacks, and permit costs by city
Denver allows detached ADUs up to 1,000 sq ft in most residential zones. Alley carriage houses are capped at 500 sq ft. Rear and side setbacks run typically 5 feet from the property line, though your specific zone district may call for something different. Denver's permit fee schedule uses fixed tiers based on ADU size rather than a sliding scale tied to construction cost, which means building to the largest size within your tier usually makes the best financial sense. Current fees are published on Denver's Community Planning and Development site.
Golden caps ADU size at either 10% of lot area or 700 sq ft, whichever is smaller. Colorado Springs maintains its own size and occupancy requirements, which differ again. The gap between municipalities is wide enough to change your entire project scope, so check with your local planning department before drawing up plans.
Approval timelines
ADU permit timelines in Colorado vary by jurisdiction and project complexity. Denver's online permitting system can return over-the-counter approvals for simpler projects within a few business days, while larger or more complex detached ADUs may require a full plan review taking four to eight weeks. Historic district properties add another layer, since they typically require Landmark review before building permits are issued. Municipalities that are still updating their local ordinances to comply with HB 24-1152 may have longer processing times as staff work through the rule changes. Get a pre-application meeting on the calendar early; most Colorado planning departments offer them and they can cut weeks off your timeline.
Architectural and design standards
Most Colorado municipalities require ADUs to match or complement the primary residence in materials, roof pitch, and exterior finish. This isn't just aesthetic preference; it's typically codified in local design standards. Ignoring it can stall your permit or require expensive revisions after the fact. Some cities also restrict ADU height to prevent blocking neighbors' light or views, particularly in dense urban zones.
The permitting process step by step
ADU permits follow roughly the same path as a new home build. You'll typically need a building permit, plus separate mechanical, electrical, and plumbing permits. Inspections happen at foundation, framing, rough-in, and final stages. Most ADU projects in Colorado are exempt from Transportation, Parkways, and Landmark reviews, but properties in historic districts are a common exception. Confirm with your local planning office before assuming the exemption applies to your lot.
Denver's zoning and permit information is at denvergov.org. Golden's ADU program details are at cityofgolden.net. Colorado Springs publishes its ADU guidelines at coloradosprings.gov/adu.
Owner-occupancy and rental rules
Owner-occupancy requirements vary by municipality. Some cities require the homeowner to occupy either the main house or the ADU; others have dropped that requirement entirely. Where owner-occupancy rules exist, renting both units simultaneously is not allowed, which directly affects your income strategy. Check your local ordinance directly before assuming either arrangement is permitted. Short-term rental rules (Airbnb-style) add another layer: Denver, for example, requires a short-term rental license and limits STR activity in ways that may affect ADU use.
HOA considerations
HB 24-1152 governs municipal zoning, but HOA covenants are private contracts. Some HOAs retain the ability to restrict ADU construction depending on when the CC&Rs were written and how they're structured under Colorado law. Before committing to a project, review your HOA documents carefully. If the covenants are ambiguous, consult a Colorado real estate attorney before spending money on design or permits.
Common mistakes to avoid
- Assuming statewide uniformity.HB 24-1152 guarantees the right to build, not a uniform process. Denver's rules differ from Boulder's, which differ from Golden's.
- Skipping early zoning consultation. Setback requirements alone can eliminate certain placement options before a designer ever touches your lot.
- Underestimating infrastructure costs. Detached ADUs may require new utility connections, a separate water meter, or driveway modifications — none of which appear in the basic permit fee.
- Building without permits. Unpermitted ADUs can be flagged during a property sale, trigger fines, or require demolition at the owner's expense. Colorado municipalities have taken unpermitted ADUs more seriously since activity increased after 2024.
Insurance for ADU landlords
Once your ADU is rented, a standard homeowner's policy likely won't cover the rental activity adequately. A separate landlord policy protects the structure, covers liability if a tenant is injured, and may include loss of rental income coverage. Review your coverage before the first tenant moves in. Landlord insurance in Colorado can be structured to cover the primary home and ADU together or as separate policies, depending on your ownership setup.
Frequently asked questions
Does HB 24-1152 apply to every city in Colorado?
Yes. The law took effect in June 2024 and requires all municipalities to allow at least one ADU on any single-family or duplex-zoned lot. Local governments can still set design, size, and permitting rules, but they can't prohibit ADUs outright on qualifying lots.
What is the maximum ADU size in Denver?
Detached ADUs in Denver are capped at 1,000 sq ft. Alley carriage houses have a 500 sq ft limit. Attached or internal ADUs may follow different calculations based on the primary structure's size and the specific zone district.
Does Colorado require owner-occupancy for ADUs?
It depends on the municipality. Some cities require the homeowner to occupy either the main house or the ADU; others have dropped that requirement. Check your local ordinance directly, since this varies and affects how you can rent the unit.
How much does an ADU permit cost in Denver?
Denver uses a tiered fee schedule based on ADU size categories rather than exact construction cost. Because fees are fixed within each tier, building to the largest allowable size within a tier typically makes the most financial sense. Current fees are listed on Denver's Community Planning and Development site.
Can an HOA block an ADU if state law allows it?
Possibly. HB 24-1152 governs municipal zoning, but HOA covenants are private contracts. Some HOAs retain the ability to restrict ADU construction depending on when the CC&Rs were written and how they're structured under Colorado law. Review your HOA documents before committing to a project.
What happens if I build an ADU without permits in Colorado?
Unpermitted construction can result in fines, required retrofits to meet code, difficulty selling the property, and in some cases a demolition order at the owner's expense. Colorado municipalities have taken unpermitted ADUs more seriously since activity increased after the 2024 law change.
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