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May 22, 2019 News » Cover Story

Debate rages over easing restrictions on granny flats and cottages 

Welcome to the future of housing

click to enlarge Detached cottages are currently allowed in two-family and multi-family zone districts. The ordinance would permit them in single-family zones. - COURTESY CITY OF COLORADO SPRINGS
  • Courtesy City of Colorado Springs
  • Detached cottages are currently allowed in two-family and multi-family zone districts. The ordinance would permit them in single-family zones.

Westside residents Kathy and Tom Zehringer finished constructing an 800-square-foot detached cottage in their backyard last September.

Since then, the little house has been host to visitors from around the country. The couple rents the space on Airbnb, but to them, it’s more than just a short-term rental.

“Ultimately,” Kathy Zehringer tells the Indy, “our vision is that we could age into [the cottage].

“He says in five years,” she adds. “I don’t know if I’m ready to live that close to him in five years, but maybe in 20...”

“I may be out there in five years, she may be in the big house,” Tom jokes.

When the couple, nearing retirement age, feels ready to move into the smaller house, they hope to rent out their main property to a young family with whom they might share “resources and gardening and child care.” Such an arrangement would allow the couple “to age in our home and our neighborhood that we love so much,” Kathy explains.

click to enlarge Kathy and Tom Zehringer hope to move into their backyard cottage someday, and rent their main property to a young family. - FAITH MILLER
  • Faith Miller
  • Kathy and Tom Zehringer hope to move into their backyard cottage someday, and rent their main property to a young family.

The Zehringers believe the freedom to build additional structures on a residential lot helps foster a greater sense of intergenerational community, leads to a more walkable and bikeable city, and allows people like them to “age in place.”

But expanding the ranks of such in-law suites, granny flats and cottages in Colorado Springs draws varied responses from residents. A second, subordinate residence on a single lot — whether an efficiency above the garage or a full-scale house in the backyard — is known as an accessory dwelling unit, or ADU. Colorado Springs City Council will soon consider an ordinance that would loosen restrictions on building ADUs. 

For some, that represents an exciting option for addressing the city’s growth and adding attainable housing.

For others, many of whom live in historic districts and single-family neighborhoods, it encroaches on quality of life and threatens to usher in a tsunami of short-term rentals — which, by the way, were the centerpiece of the city’s previous big battle over housing, just last year.

City planners spent two years developing a plan to loosen restrictions around ADUs in response to a shortage of affordable housing and officials’ desire to increase infill development instead of continuing to expand the city outward. They’d originally intended for City Council to vote on the ordinance in early April, in time for residents who wanted to take advantage of looser restrictions to begin building by summer.

But the timeline was delayed, and delayed again, as residents and City Councilors expressed concerns — mainly over allowing the units in single-family neighborhoods, the biggest change the ordinance would make to city code,  essentially eliminating single-family- zoned districts.

City Council already reviewed the ordinance at a March work session, but will discuss it again at another, yet-to-be-scheduled work session before a first formal vote. Per the Planning Commission, which approved the ordinance in March, city planners must present Council with options for adding new language that requires ADUs to be architecturally compatible with the neighborhoods they’re built in, and determine whether stricter restrictions on short-term rentals should also be added.

The city is planning to schedule another public meeting on the ordinance before Council votes.

click to enlarge Attached units would be permitted in single-family zones under the ordinance, but would need an interior connection to the main home. - COURTESY CITY OF COLORADO SPRINGS
  • Courtesy City of Colorado Springs
  • Attached units would be permitted in single-family zones under the ordinance, but would need an interior connection to the main home.

The 13-page draft ordinance presented to the Planning Commission is a lot to digest, but principally, it amends city code to allow both detached ADUs (like cottages) and “integral” (attached) ADUs (like granny flats) in all residential zones. Currently, code allows ADUs only in two-family, multi-family and “special use” zone districts. Another controversial aspect: Individual homeowners associations in single-family neighborhoods could choose to prohibit ADUs altogether. (The city also allowed homeowners associations to ban short-term rentals in its 2018 ordinance.)

Also important to note:

• Attached units would require an interior connection in single-family zones, in order to avoid a condominium-type look.

• The ordinance would keep the current parking requirement (one off-street space per ADU) the same across all zone districts. Principal Planner Mike Schultz says houses in single-family neighborhoods with two-car garages would technically meet that requirement.

click to enlarge adu.jpg

• Depending on the zone district, roof pitch and whether the property is adjacent to an alley, the ordinance would change the maximum height of an ADU built atop a house or garage to 20, 25 or 28 feet. The current maximum height for such a unit is 25 feet across the board.

• The ordinance would also increase the maximum ADU size from 750 square feet to 1,250 square feet, or up to 50 percent of the main home’s finished floor area, whichever is smaller, and eliminate the requirement for 20 feet of separation between the ADU and the primary home. Instead, setbacks would depend on Regional Building Department requirements, but Schultz says most would require about 10 feet of separation.

• In single-family zone districts, the minimum lot size required to build an ADU would be either 6,000 or 9,000 square feet. The current minimum lot size to build an ADU is 7,000 square feet. (Staff may present different lot size requirements to Council.)

• In single-family zones, the property owner would be required to occupy either the principal home or the ADU as their primary residence for at least six months out of the year. This provision is meant to limit short-term rentals with absentee owners.

That last point is a key part of why some people are up in arms about the proposed changes. Remember the short-term rental ordinance? When Council voted in October to regulate Airbnbs, VRBOs and the like, an overflow crowd testified passionately that the rules went too far, or didn’t go far enough (“The Airbnb next door,” Sept. 19).

A recent guest column in the Gazette — titled “Proposed law will permit chain hotel units in backyard” — seizes on that particularly palpable fear associated with short-term rentals. If the ordinance passes, argue Colorado College political scientists Tom Cronin and Bob Loevy, “Mom, Dad and the kids will wake up to find a mini-Marriott, mini-Hilton or mini-Hyatt hotel under construction in their next-door neighbor’s backyard.”

While hotel chains may indeed be looking for neighborhood properties, they probably wouldn’t be able to own an ADU in a resident’s backyard: The ordinance specifically restricts property owners who build accessory dwelling units from selling them separately from the principal unit, unless their lot is big enough to subdivide (at least 12,000 square feet in a single-family zone). The ordinance’s owner-occupancy requirement would also seem to prevent such a situation from occurring. But the fear of short-term rentals driving up housing costs and overtaking neighborhoods exists all the same.

In the Old North End, where Loevy lives, the neighborhood board of directors has voted to oppose the ADU ordinance — though the board doesn’t have the power to stop people from building the units should the ordinance pass.

Loevy’s objections, and those of his neighbors, don’t stop at short-term rentals. In fact, Loevy created a detailed position paper that lays out several additional arguments: that the ordinance would cause population density leading to urban blight, increase family flight from downtown and the surrounding neighborhoods, and unfairly favor neighborhoods with homeowners associations.

But a central issue for the Old North End’s historic preservation committee is that ADUs would take away from the community’s unique character.

“One of the assets of the neighborhood is the large lot space,” Loevy explains. Many houses in the Old North End, developed at the turn of the 20th century, sit on large lots because city founder General William Jackson Palmer’s city planner wanted to provide distance between the wealthy residents’ principal homes and the separate “carriage houses” for the horses, Loevy says. 

“Breaking up these large beautiful lots, and putting what are essentially apartment houses on them, is going to destroy the historic character of the neighborhood,” Loevy explains.

City spokesperson Kim Melchor notes that part of the Old North End neighborhood, but not all, is in a historic overlay zone. In that area, exterior alterations must be approved by the historic preservation board.

City planners are proposing to add new language to the ordinance that would require people who build ADUs to make them compatible with the architecture of the main home and surrounding neighborhood. They’ll present it for City Council to consider.

click to enlarge Building the 800-square-foot accessory dwelling unit involved installing sewer and water lines and applying for variances. - FAITH MILLER
  • Faith Miller
  • Building the 800-square-foot accessory dwelling unit involved installing sewer and water lines and applying for variances.
Kathy and Tom Zehringer pride themselves on being responsible Airbnb hosts, giving guests a warm welcome while remaining mindful of neighbors’ concerns.

“Our biggest thing is to respect our neighbors and respect their parking and to respect our neighborhood,” Kathy says. She adds that the couple planned an open house for neighbors to have pizza and tour the rental, “because most of the neighbors, they loved what we were doing.”

Kathy points out the process of building an accessory dwelling unit is difficult and costly enough that the units may not pop up all over the city at the rates some people fear. Construction involves installing and paying for sewer and water lines, and those “tap fees” can amount to tens of thousands of dollars. There can also be unforeseen costs in other aspects of the process.

For example, the couple estimates that variances they had to apply for before building their cottage (including one to waive the requirement of 20 feet of separation from the main home) cost around $2,000. That involved sending postcards to neighbors as part of the application process and allowing time for public comment.

The ordinance cuts down on some of those costs for property builders by loosening setback requirements. But it’s pricier to build an ADU than you might think.

Zehringer declined to provide a total construction cost estimate of her cottage (“It was expensive. Let’s just say that”), but Kol Peterson, the Portland author of a guide to building ADUs, estimates on his website that the starting cost to build an 800-square-foot detached cottage is about $180,000.

“For probably a lot of people that get that far down the line to build an ADU — because it’s not very affordable to build right now — there’s a deep level of commitment, usually, to what they’re doing,” Zehringer says.

PlanCOS, which lays out a vision for the city’s development over the next 20 years, includes the ambitious target of 3,800 new ADUs by 2040. It mentions the units as one important strategy for adding “attainable housing,” defined as “decent, attractive, safe, and sanitary accommodation that is affordable for the full spectrum of the City’s residents.”

Principal Planner Mike Schultz, in his presentation on the proposed ordinance to the Planning Commission, called PlanCOS’ projection of 190 new ADUs a year “probably pretty aggressive.”

A more reasonable goal is 50 to 75 new units a year, Schultz said. “But I could be wrong. We could see a huge influx, you know, maybe in a few years if there’s quite the demand.”

Lakewood, a Denver suburb about one-third the size of Colorado Springs that moved in 2015 to allow ADUs in most residential zone districts, has reviewed less than 30 building applications since then, says planner Brea Pafford. (See Sidebar, p. 17.)

“It’s definitely not turned into kind of the fear that a lot of people [had when the ordinance was passed] that, ‘Oh, there goes our single-family neighborhoods. Everything is going to be two-dwelling units now,’” Pafford says. But notably, Lakewood doesn’t allow any short-term rentals, which are generally far more profitable than standard rentals.

Colorado Springs has a long history with accessory dwelling units. The city’s first zoning code, adopted in 1926, allowed for “bungalow courts” and “guest houses,” but by 1980, new suburban-type standards banned such detached units in favor of duplexes.

In 2003, an amendment to city code allowed property owners to build detached ADUs in certain zone districts, primarily multi-family. Amendments in 2012 loosened setback and height requirements.

City planners argue that ADUs are needed to add housing options while maintaining “manageable neighborhood density”; to help people age in place, providing more housing opportunities for families with dependent and disabled adult children or elderly parents; and to “provide homeowners with a wealth building opportunity” — i.e., by renting their property.

With the upcoming vote on the ordinance, Colorado Springs is headed for a reckoning — one that may or may not shape the city’s outward appearance, but certainly defines the community’s goals going forward.

The decision is ultimately City Council’s. It’s not yet clear how a majority of councilors will vote. But it’s worth noting that the Short Term Rental ordinance, which didn’t include common limits — like a restriction on non-owner-occupied, whole-house rentals in single-family neighborhoods — was approved unanimously by Council.

“I think that we’re doing something fundamental on a policy issue here, which is essentially doing away with single-family residential housing,” Councilor Don Knight said at the March 11 work session when the ordinance was first formally discussed.

For Council President Richard Skorman, expanding ADUs isn’t just an important option, but needed to address the affordable housing shortage, which a 2014 projection pegged at almost 14,000 units for households making less than 80 percent of area median income — now calculated at about $65,000 for a family of four — by 2019. Skorman unsuccessfully argued in March against delaying a vote on the ordinance.

“The purpose of this — it’s for people that are seniors... It’s for maybe students who have huge loans, but it’s maybe for people who are working in the community as nurse’s aids or as dental assistants who can’t find a place that they can afford to live,” Skorman said. “We’re going through a crisis right now. It’s not something that we can just sort of say, ‘Let’s take our time.’”


***

The HOA exception

The city’s current proposed ordinance for cottages, granny flats and other accessory dwelling units (ADUs) would allow homeowners associations (HOAs) to ban the units.

That part of the proposal has led to some acrimony, since it would give some neighborhoods a way to ban ADUs while forbidding others from doing so. So why are neighborhoods under HOAs getting a special pass? It’s helpful to understand what HOAs are and how they work.

What’s an HOA? It’s actually just a layman’s term for a “common interest community,” defined in state statute as “real estate described in a declaration with respect to which a person, by virtue of such person’s ownership of a unit, is obligated to pay for real estate taxes, insurance premiums, maintenance, or improvement of other real estate described in a declaration.”

Common interest communities can go by other names, too, such as neighborhood associations or property owners associations.

Because the legal process for setting up such a community is complex, they’re normally registered with the state by developers after they build a new subdivision. Though it’s possible for neighborhoods to form their own HOAs, it can be difficult, says Gary Kujawski, the education, communication and policy manager for the state Division of Real Estate.

HOAs can also be dissolved, but a certain proportion of the neighbors must be on board.

What’s a covenant? The draft ADU ordinance states that its provisions “do not supersede private covenants regarding accessory dwelling units.”

Covenants, also called declarations, are a set of rules and regulations that include an HOA’s bylaws (how meetings are run, how the board is elected, etc.) as well what residents can and can’t do. Some neighborhoods have stricter covenants than others. They can be amended with the approval of a majority of property owners.

So what do HOAs think of ADUs? Greg Biscone, board president for the Cedar Heights Community Association, said his HOA would determine an official position on the issue of ADUs — and whether to amend its covenants to prohibit them — should the ordinance pass. 

However, he personally believes increasing density by allowing ADUs in Cedar Heights, a hillside, wildland-urban interface community above Garden of the Gods Park, is “probably not wise.”

“Should the change occur, we would need to conduct a thoughtful discussion of both the general pros and cons of densification and the specific impacts borne by our members, the city, our first-responders, and our wild places, given our location,” Biscone wrote in an email.

How do HOAs enforce covenants? Say your neighbor is parking her big rig on the street, but the covenants don’t allow that.

“It’s up to someone to complain,” Kujawski says, “and then it’s up to the board to act on behalf of the association to do something about that.”

HOA boards usually have a way to assess and order fines, Kujawski says. Depending on how much enforcement power they have (and the dues they collect), they sometimes hire attorneys and management companies. But state and local governments don’t help HOAs enforce covenants.

What’s the sticking point? The Old North End Neighborhood, which has a neighborhood association but no HOA, finds it unfair that its volunteer association doesn’t have the authority to keep out ADUs.

“Our complaint is that this creates two classes of neighborhoods in Colorado Springs,” says resident Bob Loevy. 

Robert Dudik, who lives in a non-HOA neighborhood northwest of Constitution Avenue and Academy Boulevard, agrees: “It’s the inequity of having two separate situations. It should be across the board: All for one and one for all.” 

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