Why is building an ADU in Denver so expensive?

[Elisabeth Ihler]

I live in Denver in a SF home that is already zoned for 2 units (U-TU-C).  Our detached 1.5 car garage needs very extensive repairs so it was an obvious choice to look into simply replacing it with a 2 car garage with a small unit on top of it.  However, everything I'm reading suggests this is a 250K+ job and there just doesn't seem to be any way to make this a reasonably profitable venture for us, at least compared with other investment options.

On the other hand, I have friends in Seattle and LA, which have similarly heated real estate markets, who have done similar things for 120-170K.  I don't really understand why the costs are so different.  I get that there are a lot of factors--permitting, local construction resources, materials, etc., but I don't understand why it would be so expensive here compared to cities with many similarities in terms of age of housing stock, cost of living, and lack of affordable housing.  

Extra credit to anyone who can explain to me why Denver's planning department is emphasizing the plan to rezone to allow ADUs much more widely when they seem like such a niche option right now?