Comments on the “Accessory Dwelling Unit” Bill Draft, 1-10-2024.

Comments on the “Accessory Dwelling Unit” bill draft, dated 1-10-2024.

By Steve Pomerance, former Boulder city council member; drafted on 1-15-24 and edited on 1-18-2024, after listening to the Zoom session that Judy Amabile, the bill’s sponsor, held the afternoon of 1-17-2024

Very Brief Summary of the draft “Accessory Dwelling Unit” Bill:

The bill requires a subject jurisdiction to allow, as a use by right, one accessory dwelling unit as an accessory use to a single-unit detached dwelling in any part of the subject jurisdiction where the jurisdiction allows single-unit detached dwellings as a use by right. The bill also prohibits subject jurisdictions from enacting or enforcing certain local laws that would restrict the construction or conversion of an accessory dwelling unit.

Subject jurisdictions are those in metropolitan planning organizations (the northern Front Range, Boulder/Denver area, Colorado Springs area, Pueblo area, and Grand Junction area.)

My Background:

I have designed and built houses, written energy-related state legislation, and been heavily involved in most of Boulder’s efforts to provide more affordable and energy efficient housing, both while I was on the city council and before and after, including:

·         solar access ordinance (protecting buildings south aspects from being shaded by new construction),

·         inclusionary zoning (requiring a percentage of new housing projects to be permanently affordable),

·         jobs-housing linkage fees (requiring jobs development to pay for affordable housing for workers that otherwise could not afford to live here), and

·         buy-down program (providing financial help in purchasing a residence in exchange for future price controls.)

·         flood control efforts, including Boulder’s first set of improvements.

Some context for the Bill:

According to a Denver Post story this week, the Denver market alone has 120,000 multi-units in the planning stages, with almost 30,000 of those already under construction. “Only three other markets in the nation - Dallas, Phoenix, and Austin – have more units expected to complete in 2024.” And Zillow is predicting that Denver metro home values will drop 1.3% this year. All this is without doing anything on the state level to address the “housing crisis.” So, do we really need to disrupt single family neighborhoods by filling them up with ADU?

Per a recent Colorado Sun article, in the last 14 years, Colorado has approved $1.45 billion in job-creation tax credits, which add to housing demand. Do we really want to keep subsidizing job growth if we already have a “housing crisis”?

Finally, of the over 121 million square feet of office space in the Denver Metro area, over 23% is vacant, per CBRE Research. That’s around 28 million square feet, which should be considered for conversion to residential, potentially housing 130-150,000 new residents if full conversion were possible. Why is that not on the housing agenda?

Here is a list of flaws that I see in this ADU bill, and some comments on the current approach of “build, build, build” with little regard to affordability, impacts, etc.:

NO ASSESSMENT OF TOTAL DEMAND: The state has not done any real work on assessing the total demand for housing in Colorado. As a result, no one really knows whether the supposed “housing crisis” is something that the addition of a few hundred thousand new units will “solve”. In other words, no one has good analyses on whether this bill (and the others) would make a real dent in demand or make a significant reduction in prices, which presumably what the “housing crisis” is all about.

As appears likely from the studies I have read, the demand is so huge (like 5-6 million people at a minimum) that to actually “solve” the problem would require at least doubling Colorado’s population, or perhaps much more.

So, the first step should be to scope the problem and get some sense of what “solving” it might look like.

I doubt if the legislators would support “solutions” of the magnitude that is almost certain to be needed if a mostly market approach is taken. And I’m pretty certain that Colorado citizens wouldn’t. The only polling I have found (Rasmussen, 2022) shows very clearly – most Coloradoans don’t want a lot more growth, and many don’t want any more.

NO EVALUATION OF PRICE ELASTICITY: The state has not done any real work on the price elasticity of demand for housing here in Colorado. In other words, given the massive demand that I referenced above, we have no clue how much adding more market rate ADUs and other housing will help with prices and affordability here in Colorado, and specifically in the metro areas affected by this Bill. This should be done before jumping to supposed “solutions”.

The studies cited in the Bill are all general and basically directional, and do not focus on the specifics here in Colorado. And there is no quantitative evaluation of the comparative effects of jurisdictions trying to “solve” demand by allowing more ADUs (or, in general, more market rate housing) versus those that have not gone out of their way to allow more. Just asserting that supply is marginally increased is not an answer to these sorts of questions. We need real quantitative data and proper sensitivity analysis.

NO COST/BENEFIT ANALYSIS: Adding another separate unit on an existing developed lot is expensive on a per square foot basis because the interior will require a separate kitchen, and for detached ADUs is quite expensive, because sewer and water hookups must be added, and access to do the construction is generally limited because of the building already in place, etc.

As a result, it is difficult to make these units really affordable, and imposing affordability requirements makes it even less attractive to builders. The problem is that, as I pointed out above, without such requirements, they do little to nothing to addressing the underlying issue of housing being overly expensive.

NO AFFORDABILITY REQUIREMENTS: The Bill fundamentally fails to ensure that ADUs that are built under its provisions are in fact affordable to people of moderate means. It has no focus on implementing price or rent controls, for example.

Worse, it seems to say that cities that do require ADUs to be affordable are limiting the number of ADUs, and so may be subject to legal action. This is totally backwards and counter-productive. Effectively, the bill promotes windfalls for landlords while not providing real price or rent protection for prospective owners or renters, and so will not accomplish anything significant of social value, unless you think that “more is better” no matter what.

NO PRESERVATION OF COLORADO’S ATTRACTIVENESS: The Bill, as well as most other proposed approaches to the supposed “housing crisis” fail completely to recognize what makes Colorado so attractive, in particular, its open spaces and natural areas and general lack of over-crowding.

There is no recognition that adding so many people may destroy what we all love about living here.

NO POLLING REQUIRED ON WHAT COLORADOANS WANT, AND POLLING THAT EXISTS IS IGNORED: This Bill, as with the rest of Polis’s “housing crisis” legislation, ignores the need to ask Colorado residents what they want, and presumes that just because the Governor declares a “housing crisis” that we need to jump on promoting unlimited growth. But recent polling results say that this is NOT what most Coloradoans want. In fact, Coloradoans think that our continued growth has made Colorado worse!

In June, 2022, Rasmussen Reports did a poll of 1,024 Colorado voters regarding their attitudes toward growth and development. Per their summary, 61% of voters say Colorado has developed too much, and only 8% say too little.

“The U.S. Department of Agriculture calculates that Colorado, over the last four decades, has turned more than 1,250 square miles of Open Space, natural habitat, and agricultural land into housing, shopping malls, streets and other urban development.” 62% of voters say that, on balance, this has made Colorado a worse place to live, with only 14% saying it is better.

“If recent trends continue, Colorado demographers project that the state's human population of 5.8 million will grow by another 1.8 million by 2050, joining Colorado Springs, Denver and Fort Collins together into a single "mega-city."  76% see this as negative, and only 13% as positive.

“Colorado cities compete for scarce water with the agricultural industry, which relies on irrigation for most of its cropland. Should water used to cultivate crops be diverted to support additional human population growth?” 71% say water should not be diverted from agriculture to support more residents, and only 15% say water should be diverted from agriculture to support more residents.

“Colorado's population has approximately doubled since 1980. Would you prefer that Colorado’s population continue to rapidly grow, that it grow more slowly, that it stay about the same size, or that it become smaller?” 32% say become smaller, 27% say stay about the same size, 31% say grow more slowly, and only 7% say continue to grow rapidly.

NO PROVISIONS FOR MAINTAINING LEVELS OF SERVICES: The Bill does not address the impacts of ADUs on the city or county’s ability to provide or maintain levels of services, nor does it provide a mechanism for ensuring compensation for existing residents for paying for the costs of mitigation of impacts on both services and infrastructure. These include:

·        FLOODING UNADDRESSED: Local flooding will be worse due to increases in impervious land area. These lots do not necessarily have to be in a floodway or floodplain to have a negative impact, because the issue is the runoff, which will end up in the flood prone areas. This can lead to enormous costs of building flood control systems in areas that currently don’t need them; land that currently can absorb water is lost to development.

·        TRANSPORTATION NOT DEALT WITH: The Bill will lead to increased loads on transportation systems, both roads and transit, due to more people needing to travel; this can get very expensive to mitigate, once the capacity of existing streets is used up. Note that the Bill does not limit ADUs to areas close to transit.

·        SCHOOL, PARKS, LIBRARIES, ETC. IGNORED: More ADUs means greater need for more schools, parks, rec centers, libraries, etc., due to increased population. Again, the Bill doesn’t formally recognize that these specific costs will exist, much less provide an equitable way to pay for them.

·       The Bill should have a requirement that impact fees be imposed to cover these costs, not simply allow local jurisdictions to impose fees or ignore them. Otherwise, the Bill may end up with having existing residents pay for the facilities needed because of these additional new residents.

NO RECOGNITION OF LIMITED WATER SUPPLIES: The Bill does not recognize that many areas have limited water supplies, and that the Bill’s requirement to allow ADUs on every single-family lot may deprive existing residents of adequate water. This is especially true in almost all of the metropolitan areas along the Front Range (northern Front Range, Boulder, Denver, Colorado Springs, Pueblo, etc.), which are served by Colorado River water, and which may lose much or all of their water from transmountain diversions, because all these supplies water rights are post the 1922 Colorado River Compact, and so are junior to the rights of the Lower Basin states, and those of Mexico, the Native American tribes, and pre-Compact right holders.

NO EVALUATION OF IMPACTS ON SETBACKS: The Bill does not address what will happen when a lot does not have sufficient undeveloped area to accommodate the minimum ADU size without impinging on the legally required setbacks. From the current language, it apparently requires that the governing body allow the ADU be built into the setbacks (with a 5’ minimum setback in side or rear yards.) The Bill presumes that what’s OK for an accessory structure like a 2 car garage (which are allowed in some but not all subdivisions within the setbacks) is OK for a large separate ADU. Is the intent to force the community and the neighbors to accept the impact of building in the setbacks that they counted on, and may be important for e.g. access in case of a fire?

NO REQUIREMENT FOR PROXIMITY TO TRANSIT: The Bill does not limit its scope to areas that have transit in close proximity. Just because the new ADU is proposed in a Metro area doesn’t mean it’s anywhere near transit. So, it will encourage more car use, increasing traffic and air pollution and CO2 emissions. This is contrary to other of the priorities that are currently being bandied about, like the notion of “transit-friendly” development, etc.

NO ACKNOWLEDGEMENT OF LIMITS ON PARKING AVAILABILITY: The Bill does not recognize that street parking is limited in most neighborhoods, simply by the limited amount of street frontage per lot. So, adding all these additional people (from both the ADU bill and the anti-occupancy limit bill, and worse when combined) without requiring off-street parking to be provided will cause massive parking problems. This shows up in the proposed 29-35-103(2). Exactly where does the Legislature expect these people to park? And what about the impact on where this spillover of cars, since they will park somewhere else, like in someone else’s neighborhood or in commercial lots?

NO REASONABLE SIZE LIMITATIONS: In 29-35-103(3), this Bill apparently allows ADUs of size equal to the principal dwelling unit, and the rest of the Bill appears to deny the ability to, for example, limit the size to, for example, a half or a third of that of the principal unit. The result is that ADUs could effectively become duplexes or 2 full size units on one lot. Allowing that is not just allowing ADU’s, that is changing to multi-unit zoning, plain and simple. Combine that with the restriction on limitations on setbacks and you have almost wall to wall building. This whole issue needs some serious rethinking.

NO RECOGNITION THAT CURRENT CASE LAW AND LEGAL ANALYSES SUPPORTS MANY PRIVATE AGREEMENTS AND COVENANTS: The Bill does not recognize that some existing case law supports private agreements’ ability to limit development under certain circumstances. As a result, the provisions in Sec. 3 and 4 that prohibit limitations on the development of ADUs will likely fail in court. The Bill seems to ignore the ability of private parties to make certain agreements that the state or local governments cannot ignore or override.

NO RECOGNITION OF THE DUAL IMPACTS OF MORE ADU’S PLUS NO OCCUPANCY LIMITS: The Bill, when combined with the proposed prohibition on occupancy limits, will lead to massive density in currently single-family neighborhoods. This will destroy the real value of them as being livable, lower density areas, and push people out, forcing development onto currently open land or pushing people who actually care about Colorado to leave the state, as happened in California. Eventually these neighborhoods will fill with massive rooming houses.

NO EVALUATION ON IMPACTS TO SOLAR ACCESS: The Bill will force development into the areas of lots that currently protect people’s solar access on the south sides of their houses. This destroys a valuable renewable energy asset that will become more and more important.

NO AFFORDABILITY REQUIREMENTS: The Bill contains no affordability requirements, and so will be a financial windfall to landlords, who will simply add bedrooms and charge the same rent per bedroom, massively increasing their profits. This is already happening in Boulder, where landlords added renters without reducing the rent per person.

NO ACKNOWLEDGEMENT OF REDUCTION OF SETBACKS AND THEIR IMPACTS: The setback rules in “Definitions” (14)(c) for “restrictive design or dimension standards” are unclear where the current legal setbacks for dwelling units may be bigger than 5 feet. But if I read it correctly, the Bill apparently will allow ADUs that effectively impinge on neighbors. Also, the language in this paragraph is almost incomprehensible. Trying to insert legal standards into the Definitions is a good way to make the whole issue almost opaque. There should be a section of the actual law that addresses this setback issue that is clear and comprehensive.

NO RECOGNITION OF OTHER MORE VALUABLE EFFORTS TO PROVIDE AFFORDABLE HOUSING: The Bill’s section on the “benefit” for “ADU supportive jurisdictions” does not recognize any other efforts the relevant community may have made toward increasing housing supply and/or making housing more affordable to people with lower incomes. Thus, it is prejudiced in one direction (promoting ADUs) while being blind, deaf, and dumb to the many other directions, which almost certainly will have much, much greater housing benefits, such as rent control, down payment assistance, etc.

NO ACKNOWLEDGEMENT THAT OTHER AFFORDABLE HOUSING APPROACHES WORK BETTER WITH LESS IMPACTS: The Bill fails to recognize that other approaches do a far better job in making housing more affordable, which presumably is the real goal, and with less impacts on existing residents’ reasonable expectations. Boulder is a perfect example of a city that has made a serious effort at this. In addition to massive development of more apartments, Boulder’s efforts include:

·         inclusionary zoning requirements, where a percentage of new housing is required to be price or rent-controlled;

·         jobs-housing linkage fees, that require new business development to pay for housing for workers that otherwise could not afford to live here;

·         rent controls on (some) ADUs, so that they are not just landlord’s moneymakers;

·         buy-downs of future price increases for owner-occupied housing in exchange for down payment assistance.

NO ATTENTION TO DE FACTO ZONING CHANGES: The notion in 29-35-104 of “ENABLING A PATHWAY FOR THE SEPARATE SALE OF AN ACCESSORY DWELLING UNIT” does not fit at all with the concept of an ADU. It’s just a backdoor way of changing the zoning, without recognizing all the inherent complications, like land borders, common spaces, etc. It makes no sense.

NO ACKNOWLEDGEMENT THAT THE GRANT PROGRAM TAXES ONE GROUP TO PAY ANOTHER: The grant program is ill-conceived. Basically, it requires all citizens of Colorado to pay to subsidize ADU’s in certain areas, with no acknowledgement that this makes the citizens’ lives who are paying for the grants less affordable.

Worse, there is no effort whatsoever in the Bill to require developers, who will be making all the money on these developments, to pay for the costs they are imposing on the other residents of their jurisdictions, further increasing the financial hit.

And, again, there are no price or rent controls.

NO AWARENESS THAT SETBACKS IN PUD’S ARE INHERENT IN THE CONCEPT: In 24-67-105, there is no recognition that in a PUD, generally, the entire allowed buildable area is almost always where the approved buildings already is; there isn’t extra land that the homeowner can develop. This is part of PUD’s popularity; the location of buildings, common spaces, parking, etc., are pre-defined by the PUD map.

The Bill is not clear as to whether the PUD’s land use map may be violated or not to allow a separate or adjoining ADU. This whole issue needs some better clarity of both thinking and writing.