Denver unrelated persons regulation and potential changes ?

Question

Hi there -

Looking into Denver, the unrelated persons regulation for a single family home is extremely tight - two unrelated peoples.

I’ve heard rumors this could be getting updated but I can’t find any information of that online.

Does anyone know if that is true ? Or for the time being is two unrelated persons for SFR the current status with no near term change ?

Thanks!

Joe Kaliher · Answer

@James Carlson had a great post on this that you should check out.

https://www.biggerpockets.com/forums/628/topics/807344-hey-house-hackers-denvers-changing-its-occupancy-limits?page=1#p4756798

Copied from his post:

Timeline?Short answer: Possibly June of this year for full passage.

Long answer: The proposal is going to face some open house/public comment sessions. (Check this link, halfway down for a list of the sessions where you can make your voice heard.)

It then has to go to the planning board and then the city council

More info please?You can find more info the group studying the issue here. (Check out the "'Questions on Household Definition" about a quarter of the way down.) Or read the presentation here.

Lia Martinez · Answer

The new group housing laws in Denver are in these prices if community review at the moment and should be signed into law in June: https://www.denvergov.org/cont...

I am a coliving investor as well, if you are interested in comparing notes.

Lia Martinez · Answer

What do you want to know about ADU's. My general take is that they are too expensive to build for the return on investment.  And they are only permitted in certain neighborhoods.

Lia Martinez · Answer

@Dakota Mivshek That's great to hear you are in Orange County.  Will you be attending the Coliving conference in Santa Monica in April: https://www.colivinghub.co/conference?

I am hoping the group housing rules do increase to 8 people per first 1600 sq ft with one person additional for each extra 200 sq ft (as is currently proposed). Many of my coliving homes already have 8 or more people in downtown and there is a real need for this kind of affordable housing.   Is Bungalow an operator or is it an owner/operator?

Dakota Mivshek · Answer

@Lia Martinez, @James Carlson, @Joe Kaliher thanks for jumping in on this post and for providing all this great information. Looking forward to connecting further in the future.

I actually work for the fastest growing "co-living" company in the US, Bungalow, and I help lead our launch markets. We were between Denver, Austin, and Orange County - and I find myself in Orange County today for the the next few months.

Denver is prime for our model, but we were hesitant to go in there before the regs were in our favor. It will be interesting to see how this plays out. Moving from 2 --> 5 would be reasonable.

James Carlson · Answer

@Dakota Mivshek

As @Joe Kaliher said above (thanks for linking to my post), Denver's unrelated persons restriction is proposed to go from 2-8. I suspect that will see some pushback as it makes its way through public hearings, the planning board and finally city council. (I can see a very similar argument from the opponents as you saw over the Airbnb/short-term rental fight ... it will change the character of a neighborhood ... it'll be nothing but parties ... transients!!!

I think the change is a bit drastic -- they're going from the strictest city in the state to the most generous -- but I think the direction of change is good. It's especially true if you're looking to do a rent-by-the-room model or are house-hacking yourself. (I just had clients close on a 6-bedroom house nearish downtown Denver. They're going to kill it as house hackers, but technically, they will be in violation of the law until it changes.)

That last point is important to make. According to those that do co-living houses where lots of people live, the city doesn't want to penalize people for this. So long as you're being a good neighbor, it isn't likely to come to the city's attention.

James Carlson · Answer

@Dakota Mivshek

I hear the same thing as @Lia Martinez about Accessory Dwelling Units (ADUs) in Denver ... that they're not a wise investment. I'm always skeptical of established thought by groups, so I'm interested if anyone can lay this out for me.

I know that some of the higher end builders like L&D Construction and Bello Homes do them for high $100s at the low end and quickly get into mid-to-high $200s. To my thinking, if you're in the right neighborhood and can Airbnb or short-term rent that unit for 2x normal rent, that could make sense. If you can't finance the build, that makes more sense as then you'd be parking a significant chunk of change somewhere, but otherwise, what am I missing?

And like Lia said, be sure to check zoning. Only certain areas of Denver allow for ADUs. (Though the city's Blueprint 2040 plan indicates going forward that density -- and therefore more ADUs -- are a priority for the city.) But for right now, it's basically Platt Park, Sunnyside, Berkeley, Cole, Barnum, Westwood areas.

Dakota Mivshek · Answer

@Lia Martinez, @James Carlson, @Joe Kaliher are you all versed in high level overview of regulations in Denver surrounding ADUs? I've had great success with ADU's in Portland, OR.

Dakota Mivshek · Answer

Potentially (to be honest that wasn't on my radar - so thank you!!!)

Yeah, Bungalow is an operator. We take advantage of existing inventory in the market.

Frank Chin · Answer

Don't know about Denver, but in areas around NYC where I am, renting to 3 or more unrelated people requires approval of the property as a rooming house. A co-worker whose dad rent to college students had his houses approved as such. So it's not at all usual.

I had a 3BR SFR, with a 4th extra room and had rented to 3 single people in the past. Unless you run into disputes with a neighbor, you'll fly under the radar. My renter, who rented my place as a family was apparently familiar with rooming house laws was unhappy when roomers across the street parked on the street in front of my rental and told them to park elsewhere. They replied it's a public street. So he told them their in violation of rooming house regulation, and he'll report them. From then, they didn't park there anymore.

Here's a discussion from an old thread a while back: Denver rentals to unrelated persons

Denver unrelated persons regulation and potential changes ?

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