(The Center Square) – Coloradans might soon see more "mother-in-law flats" or "casitas" in their neighborhoods after new reforms signed into law Monday.

Governor Jared Polis used the terms in a media release Monday announcing he signed a bill into law that gives homeowners the freedom to build accessory dwelling units (ADUs). House Bill 24-1152 mandates that specific local municipalities allow the units and provides requirements and restrictions for local government administrative processes. The bill also appropriates $8.6 million to multiple agencies during the upcoming fiscal year and $2.4 million in fiscal year 2025-2026.

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The bill created a certification and grant program in the Department of Local Affairs’ housing division to encourage the construction, conversion and use of ADUs. Municipalities subject to the law must have populations of at least 1,000 and census-designated areas with at least 10,000 residents within a metropolitan planning organization. The bill passed 61-3 in the House with Senate amendments and advanced by a 20-15 vote in the Senate.

“Coloradans have demanded solutions that will reduce the cost of housing and I’m proud that we have worked together to deliver real results,” the governor said in a statement. “Accessory dwelling units are a lower-cost option that can help increase housing choices for Coloradans.”

Earlier this year, the Common Sense Institute placed Colorado 50th in a ranking of the 50 states and the District of Columbia.

A poll conducted by Magellan Strategies last year found 73 percent of respondents wanted more action from local governments on affordable housing and also didn’t think affordable housing and land use policies in their communities were effective or moving in the right direction. Sixty-seven percent said state government should do more on affordable housing.

The new law requires local governments to allow one accessory dwelling wherever the jurisdiction also allows single-unit detached homes. The law prohibits imposing new parking requirements or requiring the accessory dwelling be occupied by the owner.

The law also requires the local administrative process to only use objective standards and can’t require design or dimension standards that are more restrictive than those for single-unit detached dwellings in the same zoning district.

The bill authorizes the Colorado Economic Development Commission to spend up to $8 million with the Colorado Housing and Finance Authority for one or more programs to encourage accessory dwelling units in certified and supportive jurisdictions. The funds can be used for affordable loans or assist with down payments.

The bill transfers $5 million to a new cash fund to serve a new grant program. It will provide money to supportive jurisdictions for promotion of accessory dwelling units. The funds can be used to offset costs related to pre-approved plans, providing technical assistance or reducing permitting fees and other development costs.

“Coloradans are overwhelmingly supportive of ADUs and this legislation gives many Coloradans the freedom to build them on their property if they choose to,” Polis said. “I appreciate the work of the bill sponsors and look forward to seeing Coloradans take advantage of this new freedom.”