Colorado awards first round of grants to help cities build ADUs

Sara Wilson

(Colorado Newsline) Colorado awarded nearly $1 million across seven cities to spur construction of accessory dwelling units, the state Department of Local Affairs announced Wednesday.

The grants are meant to reduce barriers in ADU construction, which the state has heavily promoted as a method to increase affordable housing units across the state. An ADU is a secondary and usually smaller residential space that shares a lot with a primary home. A 2024 law that went into effect this summer requires many municipalities in the state to allow ADU construction wherever zoning already allows for single-family homes.

“Colorado is leading the way on the freedom to build an accessory dwelling unit on your own property, and these grants will cut through red tape to help more Coloradans build and access these opportunities,” Gov. Jared Polis, a Democrat, said in a statement.

The grants include from $325,000 for Grand Junction’s ADU production program, $105,000 for a fee waiver program in Larimer County and $37,500 in Longmont for an ADU pre-approved plan update.

“Colorado families and communities are desperate for solutions to help address the housing crisis and build more homes for working Coloradans,” Sen. Kyle Mullica, a Thornton Democrat who sponsored the 2024 law, said in a statement. “These grants will help homeowners build an ADU on their property, making life more affordable and allowing more Coloradans to age in place.”

A little over 80% of the municipalities subject to the 2024 law are compliant, according to the governor’s office. Twelve are not compliant, which affects their consideration for various state grants from DOLA, the Office of Economic Development and International Trade, the Colorado Energy Office, and the Colorado Department of Transportation.

A handful of cities — Arvada, Aurora, Glendale, Lafayette, Greenwood Village and Westminster — sued the Polis administration in May over his threat to withhold funding if they do not adhere to other recently-passed housing laws related to parking minimums and denser development near transit. They argue that their status as home-rule cities gives them a level of autonomy over land use codes. That lawsuit is still pending.

The second round of ADU grant applications will open in February.