Sheridan council adopts ADU setback change and approves expedited review policies tied to state housing rules

Sheridan’s City Council on June 22 voted to amend the municipal code’s ADU rear-setback standard and to adopt a resolution establishing expedited review policies for certain affordable-housing projects, moves staff said are driven by recent state requirements.

The council passed on first reading an ordinance that revises Section 56-76 of the Sheridan Municipal Code so an attached accessory dwelling unit (ADU) may be built within 5 feet of the rear property line where the city code had required a 20-foot rear setback. Andrew, the staff presenter, said the change responds to a state mandate and was the only item the state required after a year of review: “if you’re an attached accessory dwelling unit … it’s just a 5 foot rear setback.” He described the edit as “pretty minor” and not likely to materially increase ADU development in Sheridan.

The council also approved Resolution 21-2026 adopting a fast-track review policy. Under state guidance, jurisdictions that commit to expedited review must decide certain applications (site development, building permit, variance, conditional use) within 90 days if the proposed project designates 50% or more of its units as affordable. Staff said Sheridan can rely on a template resolution the state provided rather than reworking local code and pointed to internal data (a prior large staff review completed in 75 days) as evidence the city can meet the timetable in many cases.

Why it matters: the measures are part of a broader state effort to accelerate housing approvals and direct funding toward compliant municipalities. Staff said an early-adoption incentive—a noncompetitive $45,000 grant—would fund improvements such as integrating the city’s electronic document management (OnBase) with GIS to speed permitting and public document access.

Key details and trade-offs: staff repeatedly cautioned that practical barriers still limit ADU build-out. They said typical retrofit ADUs remain costly, with water/sewer tap fees roughly $20,000–$25,000 and overall construction often running $150,000–$200,000; those costs, combined with lot-size and zoning constraints, explain why Sheridan has seen more pre-planning interest than finished ADU projects. Council members also discussed whether larger developments (the transcript referenced the “Flying Saucer” project) could be required to include affordable units, and staff recommended caution: Sheridan lacks an inclusionary-housing ordinance and mandatory requirements are most feasible in larger markets.

Concerns raised: residents and councilors asked about the practical effect on small lots, height limits (city staff said typical house height allowances remain unchanged, up to about 35 feet), and whether missing the 90-day target carries automatic approval consequences. Staff said the statute’s enforcement approach is still evolving and that noncompliance may affect grant scoring or priority for limited state funding rather than produce an automatic approval in every case.

What’s next: staff will submit the adopted resolution and related materials to the state to seek the adoption incentive; if awarded, the city expects to use funds for OnBase/GIS integration and other process improvements. Second-reading material on the ADU ordinance will appear in the next packet so the council can finalize the code change.