Could a small backyard cottage change what your Bonnie Brae home is worth? With Denver’s citywide approval of accessory dwelling units, many homeowners are asking that question. You want clarity before you invest, whether your goal is rental income, space for family, or future resale upside. This guide explains what the new rules mean, how ADUs may impact value in Bonnie Brae, what they cost, and the smart steps to take before you build. Let’s dive in.
Denver ADUs and your Bonnie Brae lot
An accessory dwelling unit is a self-contained secondary home on the same lot as your main house. Think a basement apartment, a converted garage, or a small carriage house. Denver’s City Council approved citywide ADU access in late 2024, which makes ADUs broadly feasible across neighborhoods, including Bonnie Brae, subject to property-specific rules (Axios coverage of the vote). You can review the city’s program and zoning updates on the Citywide ADUs page.
If you pursue an ADU, you’ll need zoning and building approvals, sewer and drainage permits, and a final Certificate of Occupancy, and the unit must have its own address. A licensed contractor must apply for permits on your behalf. Historic designations and parkway or tree rules can add review steps. Get the specifics on the city’s ADU permits page. Also note that private HOA or metro-district covenants may still restrict ADUs even if the city allows them, so always check your covenants on the Citywide ADUs page.
Bonnie Brae lot realities and design fit
Bonnie Brae is a built-out, tree-lined neighborhood with winding streets and many homes from the 1920s to 1950s, alongside newer rebuilds and renovations (Bonnie Brae history and context). Lots can be tight, which makes detached backyard cottages more challenging under setback and bulk rules. For many properties, garage, attic, or basement conversions will be the most practical ADU type. Design compatibility matters here. Expect attention to height, scale, and materials so the ADU fits the character of the main house and block.
Will an ADU raise your value? The evidence
There is no universal percentage that applies to every home. An appraisal-focused study of permitted ADUs in Portland found that when appraisers used an income approach, the ADU contributed materially to overall value in that sample (appraisal study summary). In contrast, a Journal of Housing Research paper studying Ogden, Utah, found no significant neighborhood-wide price change after ADU rentals were legalized (Ogden natural experiment).
Why the split? Appraisers often rely on comparable sales. Early in an ADU rollout, there are few comps, so some appraisals may not fully credit rental income. Where a documented rent history exists, the income approach can better capture value, but lender policies and local demand still matter. Financing and appraisal practices are a known bottleneck for ADU adoption, which is why outcomes are so site specific (Urban Institute on financing constraints).
The math: costs, rents, and timelines
Typical Denver ranges vary by project type. Contractors commonly estimate conversions at roughly 60,000 to 180,000 dollars, with detached new builds often 180,000 to 400,000 dollars or more depending on size and finishes (Denver ADU cost ranges). One-bedroom ADU rents in Denver are often cited in the 1,200 to 2,000 plus per month range, depending on finishes and location (local rent estimates).
Plan conservatively. Lenders usually will not count future ADU income for qualification, and appraisals may lag until more ADU comps exist. Property taxes and insurance can increase when you add a permitted unit. A simple project pro forma that includes soft costs, utility work, and a vacancy allowance can help you test whether the plan pencils.
How ADUs could reshape values in Bonnie Brae
- Scenario A, low adoption. A handful of conversions appear over time. Well-executed ADUs that produce stable rent or support multigenerational living likely boost those individual properties, while neighborhood-wide pricing remains largely unchanged as comps are scarce.
- Scenario B, moderate adoption. Dozens of ADUs over several years create better comps. Appraisals start reflecting income and extra livable space. Overall values tilt modestly positive, with the largest gains accruing to homes that have ADUs.
- Scenario C, rapid adoption. If many new units emerge quickly, parking and density concerns could rise, and buyer preferences may split. Some buyers pay a premium for flexibility, while others prefer fewer units on a lot. Evidence of broad negative price effects in stable neighborhoods is limited, but localized impacts can occur (discussion of externalities).
A smart path before you build
- Confirm your zoning and any overlays or historic status on the city’s ADU resources.
- Check HOA or metro-district covenants for any private restrictions.
- Get at least two detailed contractor bids, including utilities, permit fees, and site work.
- Call the county assessor and your insurer to understand tax and coverage changes.
- If you plan to finance, speak with lenders early about construction options and whether proven rent can be counted later.
Selling or buying with an ADU in Bonnie Brae
If you are selling, highlight permits, Certificate of Occupancy, design quality, and documented rent history if applicable. Buyers and appraisers value compliant, well-finished space more than improvised conversions. If you are buying, evaluate ADU quality, privacy, access, and the ability to lease long term under current rules. In both cases, comps with permitted ADUs are the gold standard for pricing, which is why local, block-level expertise matters.
Ready to weigh an ADU against your goals, budget, and timeline? Let’s map a strategy that reflects Bonnie Brae’s character and today’s rules. Connect with the Wolfe Bouc Team for discreet guidance tailored to your property.
FAQs
What is an ADU and is it allowed in Bonnie Brae?
- An ADU is a self-contained secondary unit on the same lot as your main home, and Denver approved citywide ADU access in late 2024, subject to zoning, permits, and any private covenants.
What permits do I need to build an ADU in Denver?
- You need zoning and building approvals, sewer and drainage permits, and a Certificate of Occupancy, and a licensed contractor must apply for the permits.
How much does an ADU cost in Denver?
- Conversions often run about 60,000 to 180,000 dollars, while detached builds commonly range from 180,000 to 400,000 dollars or more, depending on site and finishes.
Will an ADU automatically increase my home’s value?
- Not automatically, since value depends on local rents, appraisal methods, and available comps, with studies showing mixed results across markets.
Can my HOA stop me from building an ADU?
- Yes, private covenants can restrict ADUs even when the city allows them, so always confirm HOA or metro-district rules before you plan.
Will a lender count ADU rent when I apply for financing?
- Lenders usually require completed construction and documented rent history before counting ADU income toward qualification.
