The state has awarded its first round of grants to seven recipients as part of Colorado’s broader campaign to increase the supply of affordable housing options, notably what’s called accessory dwelling units or ADUs.

The grants from Colorado Department of Local Affairs would support local governments as they promote the construction of ADUs, also known as “granny flats” or casitas.

The grant dollars can be used to offset costs for developing pre-approved ADU plans, providing technical assistance to homeowners or covering financial assistance for fees and expenses associated with ADUs.

“Colorado is leading the way on the freedom to build an accessory dwelling unit on your own property, and these grants will cut through red tape to help more Coloradans build and access these opportunities,” Gov. Jared Polis said in a news release announcing the grants. “ADUs expand housing options that more Coloradans can afford, and these new grants offer Coloradans extra funding in helping to break ground on a new ADU.”

Last year, state lawmakers passed House Bill 1152, which requires local governments to allow ADUs, establishes a grant program, and creates a certification program within the Department of Local Affairs.

HB 1152 was one of the measures that Polis and the legislature adopted in the last few years to spur construction of more housing units, part of a campaign to make houses “affordable.”

After signing them, the governor threatened to pull millions of dollars in funding from local governments that have balked at the difficulty of implementing zoning, building codes, and other housing changes pushed by the Colorado General Assembly over the last two years.

Notably, Polis signed an executive order that puts on the line more than $100 million in funds to local governments that don’t comply with a series of laws adopted in the 2024 and 2025 sessions.

The Colorado Municipal League has balked at some of the new laws, saying they imposed unfunded mandates or interfered with home rule local control established in the state constitution.

In defense of the ADU law, Sen. Tony Exum Sr of Colorado Springs said too many families struggle to afford housing. 

“This law was all about bringing down housing prices and keeping more Coloradans in the communities they call home by unlocking the potential of ADUs,” he said. “Now, with the first round of grant funding released, we will see even more affordable, innovative housing options in our communities.”

As of last month, 82% of the local governments subject to the ADU law were either compliant or in the process of becoming compliant.

Here are the recipients of the first round of grants:

• Grand Junction ADU Production Program: $325,000

• Building Together: Encouraging ADU Development in Superior: $225,000

• Larimer County Accessory Dwelling Unit Fee Waiver Program: $105,000

• Glenwood Springs ADU Accelerator Program: $84,000

• Fruita ADU Fee Waiver Project: $75,000

• Brighton ADU Supportive Jurisdiction Grant: $38,025

• Longmont ADU Stock Plan Update: $37,500

The next round of grant funding will be open between Feb. 2 and Feb. 27.