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Durango seeks to grow workforce housing with rebate for accessory dwelling units

City also adopts less restrictive regulations
Michael Zarlingo planned to rent out an accessory dwelling unit he built in north Durango in 2019. Zarlingo said he and his wife also planned to move into the ADU and rent out the main house on their property after their children went to college. (Jerry McBride/Durango Herald file)

To expand the availability of workforce housing, the city of Durango launched a rebate program Friday to incentivize homeowners to build accessory dwelling units in or attached to their homes.

The rebate program launched along with new, relaxed ADU restrictions, meant to make the process easier on homeowners. ADUs have been legal in Durango since 2014, but just 44 new units have been created since their legalization, according to city staff reports.

Dan Armentano, city planner, told City Council in July that of the approximately 9,100 residential units in Durango, just 143, or 1½% of all residential units, are classified as ADUs. The total includes units registered with the city when ADUs were legalized and the 44 units created since 2014.

The city hopes relaxed restrictions and the rebate program will attract more interest from homeowners in developing ADUs. The units offer benefits to homeowners and occupants alike, Armentano said.

In surveys directed at ADU owners, more than half of respondents who rented accessory dwelling units to tenants said they charged rental fees less than $1,000 per month. Most respondents also indicated their ADUs are currently occupied or rented by family members. Respondents also said they liked using ADUs because the units helped them afford their homes’ mortgages, Armentano said.

“A lot of folks that responded said they specifically purchased the properties because they had an ADU and that would help offset their mortgage costs,” he said. “Certainly some benefits there in terms of allowing for homeownership opportunities here in the city.”

Jessi Scavo stands next to her accessory dwelling unit in 2013. The city has launched a rebate program for homeowners to build ADUs to increase workforce housing availability in Durango. (Durango Herald file)

Eva Henson, housing innovation manager for the city, said the incentive program is another way to provide workforce housing to people who work in Durango.

“The program will incentivize homeowners to build accessory units on their properties as part of the ongoing effort to create more housing opportunities,” she said.

The rebate program, which is in its pilot phase, aims for the creation of at least 10 new ADUs within city limits. The program offers $8,000 to eligible homeowners who apply to construct or register existing ADUs with the city. The $80,000 for rebates comes from a broader housing incentives funding pool of $500,000.

Henson said the rebates will be offered on a first-come, first-served basis.

Typical ADU developments fees are between $7,000 and $11,000, she said.

To be eligible for the program, a homeowner must agree to rent the ADU to a local worker who works at least 32 hours a week for a business or organization within La Plata County. The ADU must be the worker’s primary residence and the lease term must be at least six months. The homeowner is also required to “attest and sign a notarized affidavit agreeing to the program terms for a minimum of two years,” Henson said.

“There will be program monitoring on an annual basis so that we can continue to ensure compliance with the program,” she said.

City Council also adopted several amendments to the land-use development code to better accommodate ADUs at the Aug. 16 council meeting.

Among substantial changes, ADUs were legalized in all residential zones, except in the cases of planned developments. Parking space requirements were also reduced by one parking space in most places with on-street parking. Proposed and existing ADUs are eligible under the amended land-use code for variances to design requirements, such as setbacks and building coverage, according to city documents about the changes.

And, minimum lot sizes for properties with integrated ADUs, or units attached to primary structures on properties, were eliminated. Armentano said in July removing minimum lot size requirements would make about 400 lots eligible for integrated ADUs.

Integrated and detached ADUs are still required to have a maximum floor area of 550 square feet.


Editor’s note: A previous version of this story incorrectly said accessory dwelling units are required to have a minimum floor area of 550 square feet. ADUs within Durango city limits can have a floor area no larger than 550 square feet.

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