Correction: Despite what the graph above says, Carbondale is now at 25% for inclusionary zoning.
This week, Basalt Town Council held a public work session to discuss the possible creation of an accessory dwelling unit (ADU) incentive program in order to address affordable housing scarcity.
Last year, the Town of Basalt contracted Economic Planning Systems (EPS) to complete the 2024 Basalt Housing Needs Assessment which, among many strategies, recommended the development of an ADU incentive program. In order to develop this program, the Town subsequently contracted EPS a second time along with Design Workshop, an architecture studio.
ADUs have already been recognized by the state government as a flexible, quick strategy to mitigate growing housing concerns. Colorado House Bill 24-1152, intended to make ADU construction easier and cheaper for homeowners, went into effect in June of this year.
While the bill standardizes ADU guidelines and allocates $5 million in grant funding and $8 million in loan support for homeowners and local governments, it only applies to jurisdictions with metropolitan planning organizations. In other words, only front range communities and the Grand Junction area are affected by the bill.
However, EPS states in its report that the Town of Basalt can use this state bill as its framework for implementing its own ADU regulations.
Presently, Basalt’s code does not permit ADUs as a by-right in any zoning district. Instead they are permitted only by special review in three zoning districts, which comprise only 7.1% of Basalt’s total area, limiting opportunities for ADU development among otherwise suitable neighborhoods.
According to current Basalt rules, if ADUs are not explicitly allowed in a planned unit development (PUD) an amendment is required to permit them. The PUD amendment process is lengthy, requiring application submission, review by the Planning and Zoning Commission and Town Council approval after a public hearing.
During a period of public outreach, Design Workshop met with representatives from four different homeowners’ associations in Basalt to gather concerns and perspectives regarding ADU development in their communities. Design Workshop found that support was conditional. While there is general interest in ADUs, especially as a means to generate income, stakeholders were concerned about how ADUs might be employed and their impact.
Concerns included that the ADUs might be converted into short-term rentals and/or increase residential density, resulting in additional traffic, reduced parking and changing the feel of the neighborhood. Additionally, some found the PUD amendment process for ADUs to be too burdensome and emphasized the importance of reducing political and financial barriers to construction.
EPS’ report suggests possible regulations to ADUs in order to address affordability and usage concerns, including an administrative review process as an alternative to amending PUDs and implementing grant programs. It suggests that tenants of grant-funded ADUs would have to either be employed within a three-mile radius of Basalt, be retired or disabled with prior local employment or telecommute full time while living within the three-mile radius. Additionally, a tenant would have to sign a lease for a minimum of one year.
The draft conditions are intended to ensure that ADUs serve their intended purpose, which is to support Basalt’s workforce. Homeowners who do not pursue grant funding from the Town would not be subject to the same restrictions.
EPS also recommended that Basalt eliminate its exemptions for its inclusionary housing ordinance (IHO). An IHO requires a certain amount of housing in any development to be set aside as affordable. Among six mountain communities EPS researched, Basalt has the highest set-aside rate at 25%. But Basalt carries exemptions for developments below a certain size.
Mayor David Knight questioned whether funds were available to establish an ADU grant program, especially considering the Town is already planning on implementing a deed buydown program to reduce the cost of purchasing homes.
Town Planner Michelle Thibeault suggested that before the Town considers allocating grant funding the first step should be simplifying the ADU approval process to begin with, such that homeowners who already have the capital can construct an ADU independently.
While no action was required during this presentation and councilors questioned the specific implementation of the grant program, the council agreed that reducing barriers to ADU construction would be the first step towards bringing these alternative housing options into Basalt.