With new law about to hit home, accessory dwelling units gaining popularity

With a new law that will make it easier for most Colorado residents to build accessory dwelling units (ADUs) set to take effect June 30, StudioHOME is launching a new ADU model.

The 528-square-foot StudioHOME Carriage House, built over a one-car garage, includes one bedroom, one bath and a kitchen.

“It’s almost like a small home,” said Jeremy Nova, co-founder and creative director of StudioHome, which recently rebranded from Studio Shed. “It grew out of customer demand.”

Nova said customer inquiries regarding ADUs are up between 30% and 50% since the beginning of this year, and many are early in the order process but waiting until June when HB-1152 law takes effect so the permitting process will be easier.

“All of the legislative changes that are codified but not live are helping drive that,” Nova said.

StudioSHED’s Carriage Houses sell for $200,000 without installation services or $300,000 with installations. The company offers other ADU models that sell for between $100,000 and $150,000, depending on options and site work.

Many Denver and Boulder neighborhoods with homes that have backyards backing up to an alley are ideal for ADUs, Nova said.

“The ADU legislation fits with a lot of neighborhoods,” Nova said. “Old historical neighborhoods have the perfect configuration. The building has a small footprint so you can put it into a very tight space.”

The goal of the new law is to increase the supply of affordable housing by making it easier and cheaper to build ADUs. It also will give homeowners an opportunity to bring in rental income and boost their property’s value by as much as 35%.

One of the biggest challenges for homeowners who want to build an ADU is the construction cost, so the state allocated $8 million in funding for low- and middle-income residents to help.

The state also launched an Innovative Housing Incentive program, which has $40 million available to address Colorado’s housing shortage by supporting the development and expansion of housing manufacturing businesses.

StudioHOME received a $240,000 rebate through the program that it passes on to its ADU customers, Nova said.

The new law aims to streamline ADU development by overriding restrictive local ordinances. It prohibits blanket ADU bans, relaxes parking requirements, eliminates mandatory owner-occupancy (with exceptions for initial construction and short-term rentals), standardizes setback rules and prevents overly restrictive architectural or size limitations.

Historic districts maintain design review control and municipalities can regulate ADU size, prohibit certain types of ADUs (like motor homes) and require water and wastewater service approvals.