Hey House Hackers! Denver&#x27;s Changing its Occupancy Limits

James De Stefano

Real Estate Agent · Houston, TX · Member since 2017 · 290 posts · 233 votes

6y

Reason number 45,250 that I need to move to Denver at some point in my life

Tyler Howell

Property Manager · Denver, CO · Member since 2016 · 107 posts · 43 votes

6y

@James Carlson A Home Occupation Permit application with the city of Denver will automatically grant you a 3rd unrelated resident, but still not enough. Duplex's or MFH properties can have 4 unrelated per unit by default. Makes sense right - a small MFH can have 4 per unit but a SFR can have 2 or 3. *eyeroll*

James CarlsonPro Member

OP

Real Estate Agent · Colorado | stan.store/JamesCarlson · Member since 2014 · 2k+ posts · 2k+ votes

6y

@James De Stefano

Yes, add that to proximity to the mountains, 300 days off sun, great beer, restaurants, bars, arts, parks ... I could go on about why you'd want to live in Denver.

Jeff WhiteBusiness Member

Realtor · Denver, CO · Member since 2016 · 278 posts · 371 votes

6y

@James Carlson That would be sweet if it passes. Thanks for posting!!!

Joe SplitrockPro Member

Moderator

Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes

6y

@James Carlson I doubt most people are following those occupancy limits and they are probably only enforced when people are causing trouble.

The reason for occupancy limits is because cities were developed to support a certain amount of traffic, parking and road wear. When you have 8 adults, you have 8 cars and that is 4X as much as you have with two adults. Sewer and water systems are not designed for 8 adults taking showers and excreting waste. On the flip side, mass transit can help with the car issue and water/sewer upgrades can help with the utility usage.

As far as single family versus multifamily, usually multifamily is taxed higher. So when you put more people in a property with lower taxes, your tax revenue per resident decreases. That means more people creating more wear and less money for maintenance, upgrades and city services.

The other purpose of these laws is to protect single family neighborhoods to be family friendly (meaning people with children). Young people may see no issue with packing 8 adults into a property, but families with children don't want that traffic in their neighborhood. As people get older, priorities will change. Maybe the reality is that Denver will push families out to other communities or maybe it already happened.

I am not arguing against the change in occupancy limit, but rather trying to point out the reason these rules exist. As you push to change the laws, look at all sides, rather than just the profit perspective. It is ultimately your community, so you shape your own future. I don't live there so I have no pony in this race.

5 Reply

Tyler Howell

Property Manager · Denver, CO · Member since 2016 · 107 posts · 43 votes

6y

@Joe Splitrock Great summary and perspective.

James CarlsonPro Member

OP

Real Estate Agent · Colorado | stan.store/JamesCarlson · Member since 2014 · 2k+ posts · 2k+ votes

6y

@Joe Splitrock

I agree with you and do kind of wonder why the wild shift for Denver. The parking is the biggest issue in my book, and when I'm looking at possible house hacking homes with clients, I give a lot of value to at least three off-street parking spots. It's good for the neighborhood and good for you (avoids the headache of neighbor complaints.)

I could see something like allowing as many adults as there are bedrooms plus 1 or 2. (So a 4br home would be allowed to have six people, something like that.)

Joe SplitrockPro Member

Moderator

Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes

6y

Originally posted by @James Carlson:

@Joe Splitrock

I agree with you and do kind of wonder why the wild shift for Denver. The parking is the biggest issue in my book, and when I'm looking at possible house hacking homes with clients, I give a lot of value to at least three off-street parking spots. It's good for the neighborhood and good for you (avoids the headache of neighbor complaints.)

I could see something like allowing as many adults as there are bedrooms plus 1 or 2. (So a 4br home would be allowed to have six people, something like that.)

I agree shifting from 2 to 8 seems strange. Following the 2 per bedroom plus one rule of thumb, theoretically a 4 bedroom house could have 9 people. But from a practical standpoint, even 8 adults would exceed fridge capacity, create bathroom bottlenecks, parking problems and put extra wear on the property. My guess is they figured nobody can complain 8 is not enough. Honestly why even have a limit if you are going to allow 8. Unless someone is starting a cult, you probably won't even have 8 adults in a SFH anyways.

Kelly Sennholz

Denver, CO · Member since 2012 · 268 posts · 164 votes

6y

I think a logical number is 4. 8 is too many.

Holly D. Metzger

Investor · Denver, CO · Member since 2017 · 19 posts · 13 votes

6y

I think increasing the occupancy of residential rentals right now is nothing but asking for trouble. If you have a 4 bedroom, 2 bath SFR, and suddenly you can rent to 8 people, not only are you asking for 8 cars around 1 property, but you'll have 4 people using 1 bathroom, you'll have 8 people sharing 1 kitchen, 8 people sharing 1 laundry room, 8 people sharing 1 or two living rooms. Does anybody really want to talk about the potential of spreading disease under a Boarding House situation? Since "Retirement Communities" are really nothing but Boarding Houses for the elderly, and we can see what Covid 19 is doing in the Retirement Communities, do we really need to learn this lesson all over again? Are we really THAT stupid???

Nelson Henry

New to Real Estate · Denver, CO · Member since 2018 · 1 post · 3 votes

6y

Note that in their latest meeting minutes, they are talking limiting to 5 unrelated people, and explicitly looking to eliminate for profit rent-by-room with exception being if the owner lives on premise. So if you house hack you could rent by room while living there, but if you move or want to house hack a second home, you no longer would be able to legally rent by room.

Search youtube for the DenverCPD - Group Living Advisory Committee Meeting - May 27, 2020 for the latest meeting recording.

James CarlsonPro Member

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Real Estate Agent · Colorado | stan.store/JamesCarlson · Member since 2014 · 2k+ posts · 2k+ votes

6y

@Nelson Henry

Been meaning to update this. You're correct. Under the new proposal, house hacking in Denver in a place you don't live -- or more to the point, renting by the room if you don't live there -- will be prohibited. Yikes!!

If you want details, read through pages 15-22 on this document. Here are the details:

If the owner lives there, it allow up to 5 unrelated people to live together.
If the owner does not live there, it aAllow up to 5 unrelated people to live together only if they are a "non-profit housekeeping unit." (see pg. 18)
A "non-profit housekeeping unit" is defined as a group that shares chores and maintenance. (Okay, that's alright.) But here's where it changes: The definition specifies that "The choice of specific adults comprising the single non-profit housekeeping unit is determined by the members of such housekeeping unit rather than by a landlord, property manager, or other third party."

So essentially, you can't move out and then rent a house by the room. I'm awaiting clarification on how many unrelated adults can live together if they're not this so-called "non-profit housekeeping unit."

Steve K.

Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes

6y

Thanks for following and reporting on this @James Carlson. Boulder is considering going the other direction and doubling the current limit of non-related tenants from 4 to 8 for some properties. It was going to be on the ballot in November, until Covid. Now the housing advocacy group "Bedrooms Are For People" is suing the city to get the initiative back on the ballot. Political maneuvering/postering aside, I think city council is ultimately in favor of any affordable housing/homelessness solutions, so despite this initiative not making it on the ballot for this November, it's probably only a matter of time before Boulder raises the limit.

For what it's worth, I've never heard of the current ordinance being enforced (and I can confirm firsthand that there are many properties with occupant numbers which exceed the limit in Boulder).

With housing demand being so high in this area, and homelessness/affordability of housing being such a big hot-button issue, you'd think cities would do everything they could to provide more affordable housing. Relaxing occupancy limits seems like low hanging fruit in that effort.

Kelly Sennholz

Denver, CO · Member since 2012 · 268 posts · 164 votes

6y

Why is Denver fighting the rent-by-room thing? Seems like a great way to provide affordable housing?

@Steve K. @Kelly Sennholz

James CarlsonPro Member

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Real Estate Agent · Colorado | stan.store/JamesCarlson · Member since 2014 · 2k+ posts · 2k+ votes

6y

Yeah, it seems like Denver's intent at the outset was to address affordable housing. (The initial draft expanded the number of allowable unrelated residents in the same house from 2 to 8. Now the draft allows for 5 unrelated adults.) But this sudden turn not allowing it unless it's some sort of group co-living space counteracts that intent. I think I need to hear more about the law before and the law as it would go into effect and make sure I'm not misreading something.

And to Steve's point, these rules were rarely if ever enforced before, so I'm not sure this will change anything anyway.

Kelly Sennholz

Denver, CO · Member since 2012 · 268 posts · 164 votes

6y

Thanks.

James Fullen

Nashville, TN · Member since 2017 · 4 posts · 2 votes

5y

Thanks for the comprehensive list of suburbs and towns with different unrelated resident laws. That’s extremely helpful.

I am planning on moving to the area. Is there a specific town or suburb that would attract medical professional and/or professional tenants more than others?

James CarlsonPro Member

OP

Real Estate Agent · Colorado | stan.store/JamesCarlson · Member since 2014 · 2k+ posts · 2k+ votes

5y

@James Fullen

Of course being near hospitals in Denver or the surrounding 'burbs is a good place to be for attracting medical professionals, but I don't think it's a requisite. And I'd also say that medical professionals are just one slice of the pie when it comes to medium-term furnished rental tenants. We have two such rentals in condos in the Capitol Hill neighborhood in Denver and another in Colorado Springs. None of them are currently occupied by nurses or doctors. We've got a group of students in one, a young couple who just moved to the area and doesn't want to buy yet in another, and a professional in the third who's opening up a new branch of his company here.

I think proximity to the cool stuff of a city is almost more important than trying to tailor your location to a specific group. People staying for just a few months want to experience what that city has to offer. In Denver, that's any of the numerous areas that has bars and restaurants and shops nearby. Being near light rail is good or any of the parks. In Colorado Springs, near downtown is good but also near the west side where there's great hiking.