Larimer County Receives $105,000 to Reduce Housing Costs Through Accessory Dwelling Unit Fee Waivers
Larimer County will use a $105,000 state grant to waive construction fees for residents building accessory dwelling units, making the county one of seven Colorado jurisdictions awarded funding in the inaugural round of a program aimed at expanding affordable housing options.
The Colorado Department of Local Affairs distributed $889,025 total through the Accessory Dwelling Unit Grant Program, with awards ranging from $37,500 to $325,000. The funding supports local governments that have updated zoning codes to encourage construction of smaller, independent housing units on single-family properties.
Governor Jared Polis announced the awards November 19, emphasizing the state's focus on reducing regulatory barriers to ADU construction. The grant program opened August 1 and closed October 3, with DOLA's Division of Local Government selecting recipients based on their strategies to promote accessory dwelling unit development.
Larimer County's fee waiver program will offset building permit fees, development impact fees and plan review costs that typically add $8,000 to $18,000 to ADU construction projects. The county achieved certification as an ADU Supportive Jurisdiction by summer 2025 after updating its land use code to comply with state requirements.
State Law Mandates ADU Allowances by Mid-2025
House Bill 24-1152, passed in spring 2024, required municipalities with populations exceeding 1,000 within Metropolitan Planning Organizations to allow ADUs by June 30, 2025. The legislation eliminated common local restrictions including owner-occupancy requirements, mandatory additional parking and subjective design approval processes.
As of October 3, 82 percent of local governments subject to the ADU law were either compliant or pursuing compliance, according to DOLA. Five jurisdictions not subject to the law voluntarily pursued compliance to access state funding programs.
"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," Polis said in a statement.
The law prohibits certified jurisdictions from blocking ADUs on eligible lots, requiring owner occupancy except in limited circumstances, or imposing size restrictions below 500 square feet or above 800 square feet. Jurisdictions must use objective rather than subjective approval standards when reviewing ADU applications.
Northern Colorado Communities Adopt Varied Approaches
Fort Collins adopted ADU code changes February 4 that exceeded state minimum requirements, while Windsor approved compliant regulations November 25, 2024. Longmont updated its stock plan specifications with a $37,500 grant award, and Brighton received $38,025 for permitting and education initiatives.
Larimer County's program ranks among the largest awards in Northern Colorado, behind only Superior's $225,000 allocation for fee reductions and technical assistance. Grand Junction received the statewide maximum of $325,000 for construction grants and design competitions.
The county's comprehensive plan specifically identifies ADUs as tools for supporting multigenerational living, enabling aging in place and increasing housing diversity without large-scale redevelopment. County commissioners held multiple public hearings on ADU reform between 2021 and 2024 before adopting updated ordinances.
Before HB24-1152, Larimer County allowed ADUs in certain rural and suburban zones with restrictions including 800-square-foot size caps, owner-occupancy mandates and discretionary review processes requiring public hearings.
Fee Waivers Address Construction Cost Barriers
ADU construction costs typically range from $140,000 to $350,000 depending on whether projects involve garage conversions or new detached structures. Fee waivers covering 5 to 12 percent of total costs can determine whether moderate-income homeowners proceed with construction.
"We know that ADUs provide more housing options for smaller and lower-income households, and older adults who wish to age in place," said Maria De Cambra, DOLA Executive Director. "DOLA is proud to support local governments to diversify their housing stock, as ADUs are a great option to increase housing supply with minimal impacts on existing neighborhoods by using utilities and infrastructure that are already in place."
Certification as an ADU Supportive Jurisdiction also enables Larimer County residents to access funding opportunities sponsored by the Colorado Housing and Finance Authority. Jurisdictions must demonstrate implementation of at least one strategy actively encouraging ADU construction or conversion to maintain certification.
Second Grant Round Opens February 2026
DOLA will open the next round of ADU grant funding February 2, 2026, with applications due February 27. The department recently released an Accessory Dwelling Unit Toolkit serving as a comprehensive resource for local governments updating regulations and homeowner assistance materials.
State Senator Judy Amabile, D-Boulder, who sponsored HB24-1152, said the grants provide tools for creating housing opportunities. "From housing aging relatives to renting out extra space, ADUs offer alternative housing options that help families care for one another, save money, and live near their jobs, schools, and loved ones," Amabile said.
The complete list of grant recipients and additional information about ADU requirements and resources is available at the Department of Local Affairs ADU webpage.