ADU Rules In Denver: What Homeowners Should Know

Thinking about building a backyard cottage, finishing a basement, or converting a garage in Denver? You’re not alone. ADUs can add flexibility for family, rental income, or future resale value, but the rules feel complex when you first start. In this guide, you’ll learn what counts as an ADU, how to check if your lot qualifies, the permit process, costs, timelines, and the common pitfalls to avoid. Let’s dive in.

What an ADU is in Denver

An accessory dwelling unit is a second, smaller home on the same lot as a primary single‑family house. You might create it by finishing an interior space, building over a garage, or constructing a small detached home in the backyard. The key is that it remains an accessory use to the main house, not a separate parcel.

Common ADU types you might consider:

• Interior or attached ADU, such as a basement apartment or an above‑garage suite.
• Detached ADU, often called a backyard cottage.
• Garage conversion or new unit over a garage.

Each type has different zoning, setback, height, and utility implications, so start with feasibility before you design.

Can you build an ADU on your lot?

Start with zoning verification

Zoning determines if ADUs are allowed, allowed with conditions, or not allowed. Your first step is to confirm your parcel’s zoning and standards with Denver’s Community Planning and Development staff. Ask about ADU permissibility, maximum size, height, setbacks, and parking for your specific zone. Written verification helps you avoid surprises during plan review.

Watch historic district rules

If your property sits in a designated historic or landmark district, expect additional design review. Materials, rooflines, massing, and placement often face stricter standards. Plan extra time for approvals and be ready to adjust the design so it fits the district’s guidelines.

HOA and deed restrictions

City rules are not the only rules. Many HOAs and private covenants restrict or prohibit ADUs. Review your CC&Rs carefully and, if needed, consult the HOA or an attorney before you invest in plans. Getting written approval early can save you costly redesigns.

Key rules to confirm before you design

Size, height, setbacks, and coverage

Local code sets maximum floor area, height limits for detached units, and required setbacks from property lines. Some standards scale with lot size or the size of your primary home. Confirm these numbers for your parcel so your architect can design within the buildable envelope.

Parking requirements

Some zones require an off‑street parking space for an ADU, and others waive it in certain areas or for smaller units. Ask the city about current parking requirements for your zone and whether proximity to transit changes the requirement.

Owner occupancy and rental type

Owner‑occupancy rules vary by city and sometimes by zone. Confirm whether you must live on site to maintain an ADU and whether long‑term rentals are treated differently from short‑term rentals. If you plan any short‑term use, understand that separate licensing and rules apply.

Utilities and meters

Utility questions can make or break budget. Ask about water and sewer tap fees, capacity upgrades, and whether a separate electric or gas meter is required for a detached unit. These costs can be significant, so get early guidance from local utilities and the city.

Building code and safety

Even a simple conversion must meet habitability standards. Expect requirements for egress windows, ceiling heights, insulation, fire separation, and proper HVAC, plumbing, and electrical. A qualified architect or contractor can design to code and help you pass inspections the first time.

Permits and timeline in Denver

Step‑by‑step overview

1. Zoning verification and a pre‑application conversation with the city to confirm what is allowed.
2. Conceptual design and a site plan that maps setbacks, height, and utilities.
3. Historic or landmark review if the property is in a designated district.
4. Building permit application with architectural, structural, plumbing, mechanical, and electrical plans.
5. Plan review by the building department and any related agencies.
6. Permit issuance once corrections are resolved.
7. Construction with inspections at key milestones.
8. Final inspection and certificate of occupancy, if required.

If your design does not meet a standard, you may need a variance or special exception. Changes to driveways or curb cuts can trigger right‑of‑way permits, so flag those early.

How long it takes

Timelines vary with scope and review volume. Conceptual zoning checks can take days to weeks. Preparing full plan sets typically takes 2 to 8 or more weeks. Plan review and permits often take 4 to 12 or more weeks. Interior conversions can build out in a few weeks to a few months, while a new detached ADU commonly takes several months. Historic review and variances add time.

Budgeting and financing

Typical cost categories

Plan for both hard and soft costs:

• Design and engineering fees.
• Permits, plan review, and possible utility or tap fees.
• Construction: foundation, framing, roofing, insulation, HVAC, plumbing, electrical, and finishes.
• Site work: grading, drainage, access, and landscaping.
• Historic‑compliant materials if applicable.
• Contingency, often 10 to 20 percent or more.

Ballpark ranges

Costs vary by scope and Denver labor and materials. As a rough national context, interior conversions can range from tens of thousands into the low six figures. Detached new ADUs more often land in the mid five‑figures to the low six‑figures, and can exceed that with larger footprints or higher finishes. Treat these as starting points and get local contractor bids for accuracy.

How to pay for it

Homeowners commonly use cash, a home equity loan or HELOC, a cash‑out refinance, or a construction loan. Some lenders offer home improvement products that fit smaller conversions. If you plan to offer below‑market rents or meet specific criteria, watch for local or state incentives that may support ADUs.

Taxes, rentals, and insurance

Adding livable square footage usually increases assessed value and property taxes. The Denver Assessor will reassess after improvements, so contact the office to understand timing and impact. A tax advisor can help you plan for deductions and depreciation if you rent the unit.

If you plan to rent long‑term, study local rents and vacancy trends for your neighborhood and unit size. If you are considering short‑term rentals, you must follow Denver’s short‑term rental rules and licensing through the city’s Excise and Licenses department. Always verify current requirements before listing.

Notify your insurance carrier before construction and when you complete the ADU. You may need a landlord policy or additional liability coverage, especially if renting the unit.

Common pitfalls and how to avoid them

• Skipping zoning verification and design within your parcel’s standards.
• Overlooking HOA or deed restrictions that prohibit ADUs.
• Underestimating utility costs for water, sewer, or electrical upgrades.
• Forgetting historic review, which can change materials and timelines.
• Misunderstanding parking or short‑term rental rules.
• Omitting a contingency, then running out of budget mid‑project.

The fix: confirm zoning in writing, loop in the city and utilities early, work with an architect who knows Denver codes, and keep a realistic budget cushion.

Your step‑by‑step checklist

1. Pull your zoning and parcel info, and check for any historic or landmark designation.
2. Request zoning verification or a pre‑application meeting with the city.
3. Review your HOA CC&Rs and mortgage restrictions.
4. Hire an architect or designer for a feasibility study and schematic site plan.
5. Call Denver Water and your electric and gas providers about taps, capacity, and potential fees.
6. Confirm parking requirements and whether any short‑term rental plans would need licensing.
7. Prepare and submit permit plans for building, plumbing, mechanical, and electrical.
8. Line up financing and update your homeowners insurance plan.
9. Hire licensed contractors and pass inspections during construction.
10. Close out with final inspection, certificate of occupancy if required, and any rental registrations.

Building an ADU in Denver can be a smart move for flexibility and long‑term value when you follow the right steps. If you want help choosing the right property for an ADU, estimating resale impact, or weighing rental scenarios, reach out. You will get practical guidance from search to closing and beyond with Sarah Sells Denver.

FAQs

Are ADUs allowed on my Denver property?

• It depends on your parcel’s zoning and whether you are in a historic district. Start with a zoning verification through the city to confirm permissibility and any conditions.

How big can a Denver ADU be?

• Maximum floor area and height are set by local code, and standards vary by zone. Ask the city for the exact size and height limits that apply to your lot.

Do I need off‑street parking for an ADU in Denver?

• Parking requirements vary by zone and sometimes by location. Some areas require a space and others grant waivers. Confirm the current rule for your parcel before you design.

Can I use a Denver ADU for short‑term rentals?

• Short‑term rentals are regulated separately. You typically need to follow city licensing rules and meet safety standards. Verify current requirements with the city before listing.

Will a Denver ADU increase my property taxes?

• Likely yes. Adding livable square footage generally increases assessed value. Contact the Denver Assessor’s office for guidance on timing and impact.

How long does permitting for a Denver ADU take?

• Expect weeks to months. Plan preparation can take 2 to 8 or more weeks, and plan review commonly takes 4 to 12 or more weeks, depending on scope and reviews.

Do I need a separate utility meter for a Denver ADU?

• Metering rules vary by utility and ADU type. Ask the city and utility providers about tap fees, capacity, and whether separate meters are required for your project.