Thinking about a co-living strategy in Denver after HB24-1007? You’re not alone. You want higher cash flow, lower vacancy, and zero compliance surprises. This playbook shows you what changed, how Denver classifies co-living, the permits and licenses you need, and a practical path to launch. Let’s dive in.
HB24-1007: What changed
HB24-1007, the HOME Act, took effect July 1, 2024 and stops cities from limiting how many unrelated people can live together based on family status. It still allows local occupancy limits tied to health and safety or affordable housing program rules. Review the bill text on the Colorado General Assembly site and state implementation guidance for context. See HB24-1007 and DOLA’s guidance.
For you, that means roommate households are clearer in law, but you still must meet building, fire, and wastewater standards. Local program rules can also apply if a unit is income-restricted.
Denver rules: household vs congregate
Denver updated its zoning language to align with HB24-1007. The city treats unrelated people living together as a “household” when they function like one, and it regulates “congregate” or rent-by-the-room uses separately. The difference drives what is allowed on your parcel, which permits you need, and how you can lease. Review Denver’s Group Living guidance.
Denver’s zoning code still includes explicit household size rules in some places and limits where congregate uses can go. Always check your parcel’s zone district and confirm whether your intended operation is household living or congregate living before you underwrite a deal.
Occupancy and health standards
Colorado health and space standards commonly used for occupancy require at least 150 square feet of habitable space for the first occupant and 100 square feet for each additional occupant per dwelling. Sleeping rooms generally need 70 square feet for the first person and 50 square feet per additional person. See 6 CCR 1010-14-9.0.
If a property uses an on-site wastewater system, design flows often assume 2 people per bedroom up to 3 bedrooms and a default of 75 gallons per day per person. Increased occupancy can trigger upgrades. Confirm with the local health department. See CDPHE Regulation 43.
Choose your co-living model
Model A: Household co-living
Multiple unrelated adults live together as a single household with shared common spaces and responsibilities. This is the lowest-friction path in most residential zones when occupants genuinely function as one household. Lease structure, house rules, and how you market the unit should align with this use.
Model B: Rent-by-the-room (congregate)
An operator leases individual rooms and markets to individual renters. Denver regulates this as a distinct use that is often limited to multifamily and mixed-use zones. Converting a single-unit home to a rooming or boarding operation can trigger zoning use permits, building and fire upgrades, and business licensing. Start with Denver’s Group Living page.
Model C: ADU or separate unit
An accessory dwelling unit adds another legal dwelling you can rent. It requires permits and must meet code for an independent unit. This can diversify income without switching to a congregate model.
Model D: Purpose-built co-living
Acquire or develop in zones that allow congregate living, then design private bedrooms with shared amenities. Expect commercial-level operations, professional compliance, and lender diligence.
Compliance checklist
Use this quick list to protect your deal and timeline:
- Zoning check: Confirm if household living or congregate use is allowed on your parcel. See Group Living guidance.
- Building and fire: Adding bedrooms or changing use can trigger egress, smoke detection, sprinklers, plumbing, and accessibility reviews. Consider a pre-application code review. See Denver building regulations.
- Wastewater: On septic or OWTS, verify design capacity and upgrade needs. Reference CDPHE Reg 43.
- Rental license: Denver requires a residential rental property license for rentals of 30 or more days, plus inspections. See rental licensing.
- Boarding or lodging license: If operating a rooming or boarding house, obtain the proper zoning use permit and license. See boarding home licensing.
Leasing strategy and operations
- Pick the right lease format. A single household lease aligns with household living. Individual room leases can point to a congregate use. Match your lease to your zoning and licensing.
- Set clear house rules. Define shared-space etiquette, utilities, cleaning responsibilities, and guest policies in writing.
- Track occupancy. Keep occupancy consistent with space standards, wastewater capacity, and any applicable program rules.
- Maintain records. Keep inspections, permits, and licenses on file and current.
Financing and insurance
- Financing: Many investors use DSCR or investor loan products for co-living because underwriting focuses on property cash flow. Some conventional lenders and appraisers may discount room-by-room income or require corrections for unpermitted conversions. Get lender alignment before you commit.
- Insurance: A standard homeowner policy usually will not cover rental or boarding uses. Look for landlord or commercial policies consistent with your classification and licensing.
Market context: rents and demand
Denver added a lot of apartments in 2023 to 2025, which increased vacancy and pressured rents. Local reporting showed small year-over-year rent declines and more concessions. Price and position your co-living product with current comps in mind. See recent rent trend coverage.
Step-by-step timeline
Pre-offer
- Pull parcel zoning and determine if your model is household or congregate.
- Rough-in code and wastewater feasibility and budget.
- Build a rent model for per-bed vs per-unit options.
Under contract
- Make the deal contingent on zoning, permits, and licensing feasibility.
- Inspect for egress, electrical load, smoke detection, and any septic needs.
- Align lender and insurance with your intended use.
Pre-operation
- Secure Denver’s residential rental license and complete inspections. Start here.
- Obtain any required zoning use permits or boarding licenses. See licensing.
- Finalize compliant leases, house rules, and onboarding materials.
Launch and optimize
- Track occupancy and utility loads against your assumptions.
- Adjust pricing and concessions to hit stabilized occupancy.
- Maintain compliance calendars for renewals and inspections.
Risks and mitigation
- Zoning misclassification: Renting rooms individually in a single-unit zone may be a prohibited congregate use. Mitigate by confirming use classification and permits before marketing. Check Group Living.
- Code triggers: Extra bedrooms can require egress changes, alarms, or sprinklers and may impact energy and mechanical systems. Budget for upgrades and plan inspections early. See building regs.
- Wastewater limits: On septic, higher headcount risks capacity violations. Verify design flows and upgrade requirements. Review Reg 43.
- Licensing gaps: Operating without a rental or boarding license can stop your revenue. Calendar renewals and retain proof of inspections. See rental licensing.
Ready to fill your rooms with vetted renters and reduce vacancy across Denver and the Front Range? Partner with the local team that places tenants every day. Connect with Premium Apartment Locators to source qualified applicants and keep your co-living asset occupied.
FAQs
What did HB24-1007 change for Denver co-living?
- It prevents cities from limiting occupancy based on family status but still allows health, safety, and program-based limits. See the bill text and state guidance.
How does Denver classify household vs congregate uses?
- A household is people living together as one household, while congregate includes rooming or boarding with individual room leases. Zoning and licensing differ. Review Group Living guidance.
How many people can occupy a unit in Denver?
- Occupancy depends on space and health standards, like 150 square feet for the first occupant and 100 for each additional, and sleeping room minimums. See state standards.
Do I need a Denver rental license for co-living?
- Yes. Rentals of 30 days or more require a residential rental property license with inspections; rooming or boarding operations may need additional licenses. Start with rental licensing.
What if the property has a septic system?
- Higher occupancy can exceed design flows and trigger upgrades. Confirm capacity and requirements under CDPHE Regulation 43.
