Building an ADU in Denver: A Homeowner Guide

An accessory dwelling unit (ADU) is a second, smaller home on the same lot as a house: a backyard cottage, an apartment over a detached garage, or a separate unit inside the house. For years, most of Denver couldn't build them. That changed in late 2024.

What changed in Denver

Denver's Citywide ADUs text amendment took effect December 16, 2024. According to the city, it allows ADUs on 70% of Denver's land, compared to 36% before the measure passed. Before, many neighborhoods needed a rezoning to build one. Now, in most residential areas, the question is whether your specific project meets the zoning standards.

The measure also implements Colorado House Bill 24-1152, passed in 2024. The city summarizes that law as requiring Denver and other jurisdictions to allow ADUs in all residential districts, overriding homeowner association rules that prevent them, and requiring updates to Denver's owner-occupancy requirement in single-unit districts.

Under the old rule, if the owner didn't live on the property, the ADU couldn't be used. The city says the update still allows the ADU to be used even if the owner later moves off the property. Read the current zoning text or ask zoning staff about your situation.

What ADUs cost

HomeGuide's ADU guide (dated November 2023, so treat these as low for 2026) gives national ranges:

Detached and above-garage units cost the most because they need their own foundation, structure, utilities and, often, a new garage. Basement units cost the least because the structure already exists, but they still need egress, ceiling height, fire separation and often a separate entrance.

Four ADU types that work in Denver

Detached backyard ADU. Works on lots with alley access, common in older neighborhoods like Park Hill. It needs utility connections run across the yard.

Garage ADU. A new two-story garage with a unit above, or a conversion of an existing garage. Building over an existing garage rarely works because old garage foundations usually can't carry a second story.

Basement ADU. A unit within the basement, with its own entrance. See our basement finishing guide for egress, radon and moisture.

Attached ADU. An addition or a converted part of the house with its own entrance. Compare this with a regular addition or pop-top.

Questions to answer before you hire a designer

1. What does your zone district allow? Check ADU size, height, setbacks and placement standards for your lot.
2. Is your property a landmark or in a historic district? If so, design review applies.
3. Where do utilities come from? Water, sewer, electric and gas service may need upgrades or new taps. Ask about fees early, because they can be significant.
4. How will it be accessed? Alley, side yard or through the house?
5. How will you use it? Family, guests, office or long-term rental. Short-term rental rules are separate; check the city's licensing requirements.
6. What's your budget per finished square foot? Compare against a pop-top or addition.

Permits

An ADU is new construction (or a change of use), so it needs zoning review and building permits, plus separate electrical, plumbing and mechanical permits. Denver's homeowner permit rules say a homeowner cannot obtain a permit for work in accessory dwelling units, so plan on hiring a licensed general contractor who pulls the permits. Most people building an ADU also hire a design team to prepare drawings for zoning and building review.

HOAs

If your HOA bans ADUs, the city's summary of HB24-1152 says the state law overrides HOA rules that prevent them. HOAs may still have design rules. Ask your HOA, and get legal advice if they refuse.