Starter Home (SH) Zoning Template for freestanding single unit dwellings

Foreward

For generations, homeownership has been part of the American Dream. Why? Because a home is the foundation of opportunity. It is where stability begins, where futures are planned, where children grow, and where participation in civic and economic life first becomes possible. In the modern era, starter homes also have offered entry into the middle class: a modest, stable investment from which families built equity, security, and a sense of belonging within their communities.

Today, that dream is dying. Starter homes have all but disappeared from the Colorado marketplace.

Coloradans Can No Longer Afford to Live Where They Work

Before exploring a solution to that loss, let’s define what a starter home is. Generally, it is thought of as a small, freestanding, single-unit home, generally totaling no more than 1,000 square feet, built on a modest lot, sometimes with an accessory dwelling unit and sometimes without. It may be site-built, modular, or manufactured. What distinguishes the starter home is not its construction method, but its regulatory treatment. Once land is appropriately zoned and subdivided, these homes proceed through clear, objective administrative approvals tied to health, safety, and form, not discretion, delay, or negotiation by attrition. The intent is straightforward: by reducing regulatory burdens, policymakers facilitate the most attainable form of homeownership and lessen the time, cost, and risk required to build starter homes.

Colorado clearly has not achieved these goals. Lower-priced homes are simply not being produced in sufficient numbers. As such, the state’s housing challenge is neither abstract nor ideological; it is structural and measurable. While approximately 40 percent of Colorado households can afford homes priced below $300,000, for example, those homes make up only about 15 percent of the owner-occupied housing stock. At the same time, roughly 85 percent of homes are priced at more than $300,000, even though only about 60 percent of households can reasonably afford to purchase in that range.

The traditional starter home sits squarely in the price band households need and seek, yet its production has steadily declined.

There is more data that illustrates Colorado’s housing deficit. In 2023, roughly 60 percent of Colorado households did not earn enough to afford the average home available in the state, up from 47 percent in 2010. This problem is not a marginal one; it means the majority of Coloradan families can no longer buy a home where they live. CSI research also shows a pronounced mortgage-capacity mismatch: the homes households can reasonably afford, based on real incomes and real lending standards, are no longer the homes our land use laws allow to be built at scale.

Colorado’s gap between home values and household affordability ranks among the worst ten in the nation, and it is present across every one of the state’s 12 most populous counties. In each jurisdiction, the share of homes in attainable price ranges falls well short of what local incomes can support. The shortage is systemic.

How CSI’s Starter Home Zoning Template Can Help

Enter CSI’s Starter Home Zoning Template, which was developed based on thousands of hours of engagement with Coloradans and research into the home building value chain. In community meetings, entitlement hearings, and neighborhood conversations, Coloradans consistently voiced the same concerns: there is too much density and too many rental units, and housing does not feel permanent, personal, or rooted.

Too often policymakers dismiss these concerns even though understanding them is fundamental to solving the state’s housing challenges. The feedback makes it clear that Coloradans want homes they can imagine owning, can afford, homes that are human-scaled, are durable, and will give them the opportunity to participate in the community and the economy. This Template responds to those concerns by taking them seriously.

Using this Template, local governments can become part of the solution.

Municipalities operate within systems shaped by legacy codes, litigation risk, infrastructure constraints, and political crosswinds. Local policymakers’ responsibilities are complex, and their caution is understandable. Yet the current entitlement environment exposes homebuilders, nonprofit and private alike, to extraordinary levels of time, cost, and uncertainty. As CSI research has shown, years of delay, discretionary approvals, inclusionary zoning mandates, unpredictable outcomes, and compounding carrying costs have transformed homebuilding into an extremely risky, and thus costly, endeavor. The risks manifest in higher prices, fewer projects, and a shrinking pool of builders able to participate at all.

How might local policymakers ease this risk?

This Template focuses deliberately on what local governments can control and where action is most likely to succeed: zoning clarity, objective standards, administrative approval pathways, and predictability. It does not pick winners and losers; prioritizes small, freestanding, for-sale homes; and replaces delay with certainty, discretion with trust, and fear with clear, understandable form and design.

CSI research demonstrates that communities that reduce regulatory friction and align zoning with attainable housing types experience tangible benefits: greater household stability, increased local spending, and more resilient municipal finances. Homes are not merely places to live; they are durable civic and economic infrastructure. Reducing that risk is not about privileging developers. It is focused on restoring a functional system capable of delivering homes aligned with household incomes and community values.

We are clear-eyed about the broader forces contributing to Colorado’s housing shortfall, including water availability and cost, labor constraints, rising material prices, and the cumulative burden of impact fees. These pressures are real and consequential. This Template does not deny them, but offers solutions to the variables local governments can control. To our knowledge, it is the first tool of its kind in the United States.

Intro

This document describes a simple approach to authorizing development of small detached single-family homes that can open up new opportunities for affordable homeownership through construction of types and sizes of homes often prohibited by local zoning codes. Once land is zoned into the proposed R-SH (Residential Starter Home) zone district and land has been subdivided, all aspects of a Starter Home development can be approved administratively and staff are given significant flexibility to approve proposed developments that meet the intent of the R-SH zone district even if the specifics of the development do not exactly meet the development standards in this document.

With or Without Accessory Dwelling Units

1. Purpose

1.1. General

The purpose of this Chapter is to authorize the construction of small, freestanding single-unit dwellings (Starter Homes) on small individual lots, or on parcels of land containing defined areas for multiple Starter Homes, subject only to compliance with objective standards clearly related to the protection of public health and safety, with compliance being  confirmed administratively rather than through a discretionary decision-making process, in order to reduce the time, expense, and uncertainty of development approvals.

1.2. Relationship to Other Development Regulations

The following sections of this [development code] shall continue to apply to Starter Home development authorized by this Chapter, unless modified as listed below. In case of direct conflict between any standard in a different Chapter of this [development code] or regulation and the standards in this Chapter, the provisions in this Chapter shall apply.

1.2.1. List of Sections of the Development Code and any exceptions to standards in that Section otherwise applicable to single-unit detached residential development].

2. Single-Family Starter Home (R-SH) Zoning District

2.1. Creation

The Single-Family Starter Home Zoning District (R-SH) is hereby created. The provisions of this Chapter shall apply in those areas designated as (R-SH) on the [official zoning map].

2.1.1. [OPTION] Maximum Size of a Starter Home Development

No SH zone district shall include more than [20] gross acres of land unless the land is divided into phases, each of which contains not more than [20] gross acres of land, that are separated from each other by significant natural or man-made features including but not limited to rock outcroppings, landforms, water features, storm drainages, or designated open spaces at least 50 feet in width, or by collector or arterial streets meeting local street standards.

2.2. Permitted Primary Uses of Land

2.2.1. A Starter Home, as defined in Section 6 below.

2.2.2. Park or open space.

2.2.3. [OPTION] Community garden.

2.2.4. [OPTION] Community center.

2.2.5. [OPTION] Recreation facility.

2.3. Permitted Accessory Uses of Land

2.3.1. One internal Accessory Dwelling Unit containing between 500 and 800 square feet of gross floor area, located within the exterior walls of each Starter Home, and subject only to those standards permitted by C.R.S. 29-35-101 et. seq.

[OPTION] One external Accessory Dwelling Unit containing between 500 and 800 square feet of gross floor area, located outside the exterior walls of each Starter Home, and subject only to those standards permitted by C.R.S. 29-35-101 et. seq.

3. Site Location and Dimensional Standards

3.1. Site Location Standards

A Starter Home development may not be located in the following areas as shown on a map adopted by [Community]:

3.1.1. Flood risk areas as shown on adopted maps of the Federal Emergency Management Agency (FEMA).

3.1.2. Wildfire hazard areas as shown on the most recent Wildfire Risk Map or the Wildland Urban Interface Risk maps maintained by the Colorado State Forest Service.

3.1.3. Any map of steep slope areas, geologic hazard areas, seismic hazard areas, or other areas on which single-family detached development is prohibited.

3.2. Minimum Lot Dimensions

Each lot containing a Starter Home, with or without an ADU, shall contain at least [1,000] sq. ft. of gross lot area, plus any additional lot area required to meet the minimum on-site open space requirements of Section 3.2 and the minimum building location and separation requirements of Section 4.1.[1]

3.3. Minimum On-Site Open Space

4. Building Design and Development Standards

4.1. Building Location and Separation

[OPTION]  The minimum side lot line setback required by Section 4.1.2 does not need to be satisfied on each individual platted lot, but may instead be treated as minimum building separation standards that can be met by providing the required distance entirely or partially on one of two contiguous lots, provided that each lot owner is provided an easement at least [5] feet in width to maintain any portion of a primary or accessory building located less than [5] feet from a side or rear lot line or the side or rear of a Starter Home Development Site.

4.2. Maximum Building Heights

4.3. [OPTION] Building Design Standards

4.4. [OPTION] Starter Home Building Form

Each single-family detached dwelling shall comply with the Starter Home building form shown below.

4.5 Dwelling Unit Size

4.6. Parking

4.8. [OPTION] Maximum Occupancy

The maximum occupancy of each Starter Home shall be as shown in the following table.

5. Administrative Approval Procedures for SH Developments

5.1. [OPTION] Pre-Application Meeting

5.2. Application

5.2.1. The applicant shall file a complete application with the Department, including all required documentation necessary to review compliance with all applicable development standards, together with all application review fees and adopted development impact fees.

[OPTION] At the applicant’s option, the application may cover all of a proposed Starter Home development or only a portion or phase of the proposed development. If the applicant discloses the full extent of the proposed development but chooses to submit an application for only a portion of the development, the zoning standards applicable to later phases disclosed at the time of the first application shall be those applicable in this Chapter.

5.3. Review, Revision, and Final Decision

6.1. Accessory Dwelling Unit

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[1] Note: Colorado law does not permit local governments to require a larger lot size for single-family dwelling units that have an external or detached ADU compared to the minimum lot size for a single-family dwelling without an ADU.