How to have legal/up-to-code SFH basement rental in Aurora, CO?

Question

Hi all,

I am new to REI and want to begin by renting the basement of a SFH. However, we spoke to Aurora's code enforcement team and they make it seem impossible and scared the bajeezus out of me. I understand that a stove is against code, but they also say a hot plate is against code as is any sort of kitchenette, and that the only way to legally have an income-producing basement in a SFH is to make it a short-term rental like Airbnb which we do not want to do. They say that in Aurora, there is no such thing as rezoning to convert the SFH into a MFH either.

I do not want to run any operations against code/illegally so what they told me was a bummer. But, looking online, I see numerous SFH basement rentals. So are all these landlords doing this illegally/against code? I also feel confused about what exactly is illegal/against code here: is it only that I can't have a stove/hot plate in the basement? Or are long-term rentals in the basement of a SFH not allowed, period?

I plan on asking the City to refer me to the actual code/rules. I wanted to post here in the interim to get any ideas/thoughts you all have on my questions above since this is my first time trying to get into REI and you all know much more than me. Thank you in advance!

Kenny Smith · Answer

@Nilusha Jayasinghe

I agree with everyone's input here.  I run a couple of these types of properties in Westminster.  Yes, stoves are against code if it is not zoned R-2.  Putting a second stove downstairs really depends on what you are comfortable with or not and if you are willing to go against code or not.  Technically, it is illegal.

As stated, if a stove is not allowed, then have them provide what is allowable, such as a hot plate or counter top stove.

Lastly, where people get hung up in converted their home into a non-conforming duplex, is not having the accessibility from one unit to another.  It is a grey area for sure, but if you decided to wall off the upstairs to the downstairs, you have now converted it into 2 completely separate units making it a duplex.  If it is not zoned R-2, this is illegal.  However, having a door in between the 2 parts of the home would be the same as renting out a room.  Again, there are grey areas here, but I would have the building department walk you through what you can do.

Shoot me a DM, and I'd be happy to walk you through it in more detail if need be.

Kevin Sobilo · Answer

@Nilusha Jayasinghe, it sounds like you are in an R-1 residential zone where only single family homes are permitted. So, the code enforcement person was telling you that you can't add a 2nd unit in the basement but that you could finish the space and rent a room as a short term rental.

People who are making complete basement apartments might be in residential zones such as R-2 that allow having small multifamily houses or they may be in places with housing issues where they are flexible on zoning to create more units and make housing more affordable.

The first place to start is by learning your municipalities zoning ordinance and zoning map. If what I said is true, the code enforcement person may have been telling you the truth in that it might be unlikely that the zoning board would grant you a variance/re-zone your property to allow a basement apartment.

Ben Einspahr · Answer

@Nilusha Jayasinghe renting out a part of your basement is an excellent strategy to significantly offset your living expenses. As you already know, there are a lot of other savvy investors executing this same strategy in Aurora. Whether that is operated as a STR, MTR or LTR lease agreement. Very easy to find on a quick search on Zillow, Furnished Finder, and even Airbnb.

Depending on who you talk to at the city dept, they can tend to do that. Also, there could have been some simple miscommunication between either parties. Curious to hear what they come back with.

Renting out a part of your basement is no different than renting out a room in you house as long as it meets all general safety requirement (access egress, carbon+smoke detectors, ventilation, etc). Where I have seen the stove trip people up is during the inspection or appraisal process when purchasing the home. Not when wanting to rent.

I will never advise someone to do something illegal but it ultimately comes down to the investors risk tolerance with some of these grey areas. One of the most common ways people have ran into challenges renting out a part of their home (regardless of lease length) is because of some unhappy neighbors because tenants park in front of their house and they complain to the city or unlicensed STR (mainly Denver County).

This does not directly answer your question but I hope this help guide you in the right direction.

Nilusha Jayasinghe · Answer

Thank you so much for all of your replies everyone, this info helped me to speak more clearly to the City when I called them today. Here is what I found out:

1. No issues at all renting out part of an R2-zoned house according to the Zoning Dept as well as the Code Enforcement Dept.

2. The Zoning Dept sees no issue with a basement rental in R1, as long as there is no permanent divide between the basement and floor above. Apparently this dept is only concerned with the exterior of the house, not what goes on inside for the most part. They said that if an external entry to the basement already existed in an R1 house I'm looking to buy, that shouldn't be a problem.

3. The Code Enforcement Dept is more strict. Their main concern for R1 housing is that a single family home is only meant for one family. If it looks like 2 separate families are living there, then they can flag us and take us to court if we don't correct the situation. They have hard rules in place saying the following are not allowed: a permanent divide between floors, a second stove (apparently a hot plate is fine), and more than 4 unrelated people living in the house (so if a family of 4 lived upstairs, an unrelated renter in the basement would break code). However, even if my long-term rental in the basement follows all these rules, supposedly I can still get flagged if a neighbor/the tenant/whoever lodges a complaint and then I cannot demonstrate that the tenant is simply my roommate who is allowed access to the rest of the house. So, having a basement tenant who in reality uses their own entrance and doesn't come into the rest of the house seems risky in the event that I do end up having to face the Code Dept. The Code Dept told me my best bet is to just look in R2 housing to avoid any trouble.

So looks like I have to think about my risk tolerance and see what I'm willing to do. Just wanted to let y'all know about what I found out in case this info helps anyone else. Let me know any other thoughts you have and thanks again.

Bonnie Low · Answer

Many jurisdictions in CO are really cracking down on rentals, despite publicly voicing concern over the lack of affordable housing. Renting out rooms or converting part of your space to a secondary housing unit can be one of the best ways to help provide affordable housing in your community. It seems contradictory, I know. As someone else mentioned, it's not uncommon to get someone working the desk at the local building department who just doesn't know the subject matter that well or who is personally opposed for idealogical reasons. It happens everywhere and sometimes you have to try multiple people until you find someone who is both friendly and helpful. Once you develop that relationship, you'll be able to leverage it to help you navigate the labyrinth of municipal code. You might attend a local REIA meeting and talk to other investors about how they navigated the process and whether they have anyone they could recommend you talk to. Most people (contractors, developers, investors) are more than happy to share both what has worked and what hasn't worked. Hopefully, with tenacity and polite persistence you'll get the info you need. I find it usually helps to ask 'what can I do?' vs. 'what can't I do?' People love to tell you what you can't do. If you focus on what you CAN it forces them to admit that there are, often, things that you CAN do to accomplish your goals. Good luck to you!

Colleen F. · Answer

@Nilusha Jayasinghe A lot of places have rules against having stoves in basements.  Many people do not follow them or had those kitchens prior to current code and continue to use them, yes they are sometimes renting illegally. When people talk about the housing shortages, codes like this play a part.

I would not mess with the egress codes that is a clear safety issue. Stoves are another thing. There are many cooking appliances that aren't stoves and you probably need to read what is allowed vs what is not allowed. Ask your code person for the ordinance number and look it up.

Personally with tenants placing the toaster overn here or fryer there is more of a hazard.

How to have legal/up-to-code SFH basement rental in Aurora, CO?

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