Build an ADU in Denver: Lessons from a California Case Study

Rough framing and demolition of a home in Denver by Sustainable Design Build.

Accessory Dwelling Units (ADUs) are gaining attention nationwide as homeowners look for creative ways to expand housing options, increase property value, and create intergenerational living opportunities. A recent feature from Business Insider illustrates how one California couple built a $500,000 ADU in their parents’ backyard to offset housing costs while gaining flexibility for their family (Lloyd, 2025). Although Denver’s housing market has its own dynamics, the insights from this case highlight the potential benefits and considerations for local homeowners.

Financial Advantages of ADUs

In California, where median home prices exceeded $1.8 million, the couple opted to build a 1,200-square-foot ADU for half that price. This decision allowed them to own property without assuming the full cost of a traditional home. Similar benefits apply in Denver. With rising property values across the metro area, an ADU can provide a lower-cost entry into homeownership for extended family members or serve as a rental property that generates supplemental income. By reducing reliance on costly rentals, Denver residents can allocate resources toward investments or other priorities, just as the California couple did (Lloyd, 2025).

For Denver homeowners, financing options such as construction loans or home equity products can make ADU projects attainable. Many clients also find that ADUs provide long-term returns through rental income or increased property value, positioning them as a practical investment in a competitive market.

Lifestyle and Family Benefits

The California case demonstrated that ADUs can provide more than financial relief. The couple enjoyed having grandparents nearby, shared household responsibilities, and even benefited from lower bills by splitting utilities. In Denver, where multigenerational living is on the rise, ADUs offer a similar opportunity for families to remain close while maintaining privacy. Homeowners can create independent living spaces for aging parents, adult children, or visiting relatives, balancing support with autonomy.

Challenges to Anticipate

While the benefits are significant, the California couple also acknowledged trade-offs. Living on property owned by family meant limited authority over large-scale decisions, such as adding a pool. They also faced misconceptions from outsiders who assumed ADUs were “shacks,” despite their unit being larger than many apartments (Lloyd, 2025).

In Denver, challenges may include zoning requirements, permitting processes, and navigating neighborhood perceptions. Working with an experienced design-build firm ensures compliance with city codes and helps create ADUs that are both functional and aesthetically consistent with the main property.

Why Denver Is Well-Suited for ADUs

To build an ADU in Denver there has been many strides in adopting more flexible zoning regulations to allow for ADU construction in many neighborhoods. Homeowners considering an ADU can capitalize on these policies to create rental units, multigenerational living spaces, or private offices that support long-term lifestyle goals.

Sustainable Design Build specializes in custom ADU construction tailored to Denver’s unique housing landscape. By combining design expertise with full project management, SDB helps homeowners navigate permitting challenges and ensures the finished product enhances both functionality and property value. Learn more about ADU construction services in Denver.

References

Lloyd, A. (2025, September 26). A couple built a $500,000 ADU in their parents’ backyard to afford living in California. It has its pros and cons. Business Insider. Retrieved from https://www.businessinsider.com/couple-built-500000-adu-parents-backyard-afford-living-california-2025-9