WDRC’s ADU initiative aims to increase affordable housing options

Program provides support for low- and moderate-income homeowners in West Denver
Photo: Enterprise Community Partners

Is one solution to Colorado’s housing affordability and resident displacement problems right in our own backyards?

That’s what the West Denver Renaissance Collaborative (WDRC) set out to learn in 2017 when discussions started on creating a pilot to test the feasibility of accessory dwelling units (ADUs) — also known as a granny flat, casita or backyard cottage. Beginning work with local organizations, city departments and lenders in 2018, the WDRC-led West Denver Single Family Plus (WDSF+) program positions and leverages ADUs as an affordability option.

Related: How popular are ADUs?

WDSF+ provides design, finance and construction services to low- and moderate-income homeowners in West Denver neighborhoods that shorten the permitting process and cuts tens of thousands in construction costs. While many of the area’s long-time homeowners have paid off their mortgages, some struggle with increased property taxes and other rising costs, and an extra dwelling could help by providing rental income.

WDSF+ offers support for qualifying homeowners who wish to remain with their property and offer an affordable rental to a family member or tenant over a 25-year period. Affordability is maintained through a deed restriction, and annual reporting is required during the loan period.

But COVID-19 brought new challenges for WDSF+. Because of the pandemic, economic conditions have worsened, displacement pressure has increased and homeowners in West Denver continue struggling to afford mortgages and rising property taxes. Responding to this urgent need, a new partnership and option for owners was developed between Elevation Community Land Trust (ECLT) and WDRC to create a timely, efficient and collaborative model. ECLT can ease owner’s cost burden by placing property in the land trust.

Based upon the traditional community land trust model, ECLT will purchase an owner’s property using a fair, appraisal-based market approach so that the homeowner can realize 100% of their equity at the time of transaction. The home is then retained by the owner at a new, affordable price, and the land is leased from ECLT.

Homeowners can then decide how to invest their equity — pay off debt, reduce a new mortgage, invest in an ADU, fund education or retirement. WDRC hopes that this program provides stability and additional options for current West Denver owners — and provides another path to affordable ADU development in West Denver.

Related: Will affordable housing ever come back to Colorado?

“High rates of involuntary displacement mean West Denver residents need options to address rising housing costs and economic uncertainty,” says Renee Martinez-Stone, WDRC director. “WDRC is working with partners who are prioritizing responsive tools and fast-tracking new options.”

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