Larimer County staff to seek ADU grant to waive permit fees in exchange for deed-restricted affordable rentals

Rebecca Everett, Community Development Director, told the Board that an ADU grant round is open with an Aug. 29 application deadline and that county staff are preparing an application. Everett said the county would use grant funds to waive building-permit fees for new accessory dwelling units and would backfill the county's building fund with the grant dollars to maintain cost recovery.

"We would intend to seek these funds to waive building permit fees for new accessory dwelling units," Everett said, explaining that homeowners who accept the fee waiver would record a deed restriction committing the unit to affordable rental for a stated period.

Why it matters: Staff said the ADU program could help meet local affordable-housing goals by reducing construction costs for homeowners who add ADUs and commit those units to long-term affordable rental. The county's housing staff noted potential program overlap with Proposition 123 goals and county landlord-education programs aimed at supporting rental housing stock.

Program design and trade-offs
Staff reported a proposed grant request of $100,000 and a 25% local match requirement. Everett provided recent permit-fee figures: "For some recent ADUs that were built in the county depending on whether they're in an existing building or a new building, detached or internal to a house, it ranges between $3,000 and $15,000," she said. The county would need to determine deed-restriction length and enforcement. Several commissioners asked for a minimum deed-restriction term; one commissioner urged a minimum of five years as a floor, and staff said they would continue to research best practices and program designs used elsewhere.

Staff cautioned that program uptake depends on deed-restriction terms and whether permit-waiver amounts justify the restriction period for homeowners. County staff noted that the ADU program in their code already prohibits ADUs from being used as short-term rentals and that enforcement of that rule is part of current code administration.

Board response
Commissioners expressed support for submitting the application in the current round but did not record a formal vote. Staff said they would submit the application and, if awarded, return with a recommendation on program design, deed-restriction length, match funding and fee-backfill details.

Next steps
Staff will finalize and submit the ADU grant application by the Aug. 29 deadline, refine recommended deed-restriction terms and, if successful, return to the Board with detailed implementation options.