Special Opportunity: Incentivizing Climate-Resilient ADUs
ADU Goal Supported: Connecting ADUs to Local Housing Goals
Additional Opportunities
You can submit information about this action as part of your Supportive Jurisdiction Certification Report, utilizing the Other Strategies section of that form. The eligibility of any “Other Strategy” submitted will be determined by the Department as part of its review of your submission. Other Strategies are generally expected to be as impactful and durable as the nine strategies listed in the statute. See the Certification Report form for details on required items for submission.
Overview
This opportunity encourages the development of ADUs promoting climate-resiliency by putting in place policies and/or programs that incentive the construction of ADUs that go above and beyond relevant local rules about topics such as:
- Energy use and production
- Water use
- Fire resistance/protection
- Weather and climate resistance (high heat, high wind, etc.)
By promoting climate-resilient ADUs, an ADU Supportive Jurisdiction can increase its ability to withstand climate-related hazards like heat waves, flooding, and wildfires.
Benefits
- Climate-resilient ADUs are better able to withstand extreme weather events and reduce vulnerability to temperature extremes.
- Solar power and battery storage offer energy security for tenants.
- Policies can align with broader local and state climate action plans, disaster preparedness plans, and climate goals.
- Provides an alternative to completely restricting ADU construction in high-risk areas (ex: Wildland-Urban Interface).
- Assess both local housing needs and climate risk, and set policy goals. Consider fire hazard risk, extreme temperatures, and seismic risk.
- Conduct a review of existing regulations. Comprehensively assess local building codes, zoning laws, housing policies, and safety and fire regulations to identify barriers to the construction or conversion of climate-resilient ADUs.
- Conduct stakeholder engagement. Collaborate with the Wildfire Resiliency Code Board, Colorado Energy Office, climate advocacy groups, disaster preparedness experts, architects specializing in sustainable design, homeowners, and community members to gather insights and identify challenges related to climate-resilient ADU development. This collaborative approach ensures that diverse perspectives inform policy and regulatory adjustments.
- Develop climate-resilient building and design standards or incentives. This may include a menu of options, such as solar panels, battery storage, high-efficiency insulation and air sealing, energy efficient design, fire-resistant materials and design, heat pumps and other electric appliances, low flow fixtures, drought tolerant landscaping, green roofs, and designing for flood resistance. Ensure that any building and design standards are aligned with existing climate resilience regulation.
- Determine financial or other incentives. Consider establishing grant or loan programs to assist homeowners in offsetting the additional costs associated with incorporating climate-resilient features into ADUs. Consider reducing or waiving local government fees for the construction or conversion of climate-resilient ADUs. These incentives can be available to all parts of the jurisdiction or only those with higher climate hazard risk, such as those located in the wildland-urban interface. They may also be tied to affordability, with more incentives available to deed-restricted units.
- Streamline permitting processes for qualifying ADUs. Consider simplifying and expediting the approval process for climate-resilient ADUs by creating clear guidelines and offering technical assistance to applicants. This may involve developing a checklist for climate-resilient design features and providing dedicated support to navigate the permitting system. These streamlining efforts can be integrated into broader efforts to streamline ADU production.
- Consider providing pre-approved ADU plans or incorporating climate-resilient features into existing plans. If your jurisdiction provides pre-approved plans for the construction of ADUs, consider prioritizing one or more designs that qualify as “climate-resilient” and label them as such.
- Pass legislation or local ordinances. Draft and approve an ordinance that codifies ADU rules, climate standards, permitting processes, and incentives.
- Launch marketing efforts for the program and its benefits. Develop educational materials and a public information strategy to clearly communicate the benefits of constructing climate-resilient ADUs, including any available incentives. Utilize existing communication channels (e.g., city newsletters, utility bill inserts, social media), local media, targeted mailings and/or presentations to local organizations. Providing resources, workshops, checklists, and consultations can empower stakeholders to embrace climate resilience in their projects and understand its financial and health benefits.
Homeowners, builders, and even staff may not know about the importance and benefits of climate-resilient ADUs.
- Develop targeted materials that communicate the need for and value of climate-resilient design, including success stories and best practices. Emphasize not just the importance from a climate perspective but also the financial and health benefits to tenants.
- Identify partnerships with local non-profit organizations to amplify marketing efforts amongst the community.
Incorporating climate resilience features can raise construction expenses, potentially deterring homeowners.
- Offer financial incentives, such as grants or fee waivers, to offset additional costs and encourage the inclusion of these features.
- Educate homeowners about other incentives, such as from the state, utilities, and federal tax credits.
Strict climate resilience requirements may make construction more complex, potentially deterring homeowners.
- Offer pre-approved plans that incorporate climate-resilient features tailored to overlay zones to simplify the development process.
- Consider incentivizing climate resilient design rather than setting standards and/or setting standards across all housing types, not just ADUs.
- State of Colorado: The Wildfire Resilient Homes Grant Program, established in 2023, provided homeowners with grants to retrofit their properties, including ADUs, to enhance wildfire resilience.
The Colorado Energy Office offers several energy efficiency and electrification-related grant programs, please visit Funding & Financing for Residents. - Outside Colorado examples: City and County of San Francisco: ADU Program for Multi-unit Buildings sets no limit on the number of ADUs permitted on the lot for projects undergoing Mandatory or Voluntary Seismic upgrades.
- Waiving or Reducing ADU-related fees for Low- and Moderate-Income Households
Waiving or Reducing ADU-Related Fees for All Applicants: See these strategies for details on fee waiver/reduction mechanisms that could also be used as incentives for affordably rented ADUs. - Providing Pre-Approved ADU Plans: Providing a pre-approved design(s) with climate-resiliency features can help you meet multiple goals at once and make it easier for homeowners to take advantage of incentives programs for climate-resilient ADUs.
Wherever you provide information about your pre-approved designs, designate those that provide climate-resilient features and clearly describe any incentives available for homeowners using those designs. - Partnering with Lenders to Provide Loans and Financing Opportunities: Climate-resilient ADUs may face increased upfront costs but reductions in operation/maintenance costs over time. Working with local lenders may provide opportunities to take these short- vs. long-term costs into consideration. The state’s RENU loan program is one option to consider that offers low cost financing for energy efficiency and other home energy upgrades.
- ADU Technical Assistance for Homeowners: Homeowners seeking to develop climate-resilient ADUs may benefit from additional technical assistance to ensure an understanding of climate-resilient building and design standards.
- Encouraging Factory-Built ADUs: Factory-built ADUs may be a good means of achieving a variety of climate-resiliency standards, including renewable energy generation, fire-resistant building materials, and net zero (including balancing energy needs with on-site energy generation). Homeowners looking for ADUs with climate-resiliency features may find it easier to start with a factory-built unit, so making sure it isn’t overly onerous to get one approved and/or providing incentives can be helpful.