The City of Coeur d'Alene's accessory dwelling unit packet is a short checklist. It asks for an application form, a site plan showing "boundaries, setbacks, parking, and principle dwelling," building elevations, second-story step-back drawings, a lot coverage plan and a notice to title recorded with the county. The standards in the packet still cap an ADU at 800 square feet and 75% of the primary home, and they require one parking space for it.
Idaho law moved past those numbers on July 1, 2026. Three bills from the 2026 session now set the outer limits on what Coeur d'Alene can require. They cover ADUs, small-lot starter-home subdivisions and short-term rentals. The short-term rental law applied as of July 1, and the city has until Feb. 1, 2027 to rewrite its ADU and starter-home rules to match. Until it does, anyone pricing a lot's guest-house potential is working from a published code that no longer fully reflects state law. For some properties, HOA covenants or Kootenai County's own rules apply on top of that or in place of it.
Two Sets of Numbers for the Same Backyard
Senate Bill 1354 was signed March 31, 2026, took effect July 1, and added Section 67-6541 to Idaho Code. It says no city "shall enact or enforce any ordinance, rule, regulation, or policy that bans accessory dwelling units in any residential zoning area," and it applies only to cities with a population greater than 10,000. Coeur d'Alene's planning staff confirmed in an Oct. 13 report that the city falls under it.
Here is how the enacted bill text compares with the city's published ADU code:
| Item | Coeur d'Alene code as published | What SB 1354 requires cities to do by Feb. 1, 2027 |
|---|---|---|
| Size | Capped at 800 sq. ft. and 75% of the primary home | Prohibit limiting an ADU to "less than one thousand (1000) square feet or seventy-five percent (75%) of the size of the primary dwelling" |
| Parking | One additional space for the ADU | Prohibit off-street or guest parking requirements, with exceptions |
| Owner occupancy | A majority owner must live in the ADU or the main home if either is a short-term rental | Prohibit owner-occupancy requirements for either unit |
| Height | 32 ft. in the principal building envelope, 24 ft. over a detached rear garage, 18 ft. for a one-story rear-yard unit | Prohibit a height limit lower than the existing primary home |
| Approval | ADU permit application with owner affidavit | Projects meeting established standards approved administratively, as a matter of right |
The parking exceptions decide whether a lot can skip the extra stall. A city may still require ADU parking if the main home has no off-street parking, if the street is unpaved or not designed for on-street parking, or if the home sits within a quarter mile of transit, an employment area or commercial services. That last exception reaches well beyond downtown, so two similar backyards a few blocks apart could end up under different parking rules.
The law also bars cities from charging ADUs higher impact fees or utility connection fees than other single-family homes pay. It requires approval standards to be "clear and objective" and to avoid discouraging ADUs "through unreasonable cost or delay." Building codes, fire standards, water and sewer capacity, steep-slope and aquifer protections, and right-of-way setbacks all still apply.
The Rule the City Already Stopped Enforcing
The table's owner-occupancy row ties into the third bill, which already has a visible local effect. House Bill 583 was signed March 16 and took effect July 1. Its text bars cities and counties from "requiring owner occupation for any amount of time" for a short-term rental. It also bars them from requiring short-term rental licenses, fees, permits, certifications or registration.
Coeur d'Alene's code still says that when an ADU or the main home is used as a short-term or vacation rental, a majority owner has to live on the property for more than six months a year. The city's Oct. 13 staff report says plainly what has happened to those rules: "Since that time, the City has not been enforcing the STR regulations."
That matters most to second-home buyers. For an owner who lives elsewhere and wants to rent a guest house by the night, the starting point is now the state statute and not the city's owner-occupancy rule. Under HB 583, the rental is still treated as a residential use subject to zoning, and cities and counties keep a list of safety-related conditions they can impose. As the Coeur d'Alene Press reported from the workshop, Community Planning Director Hilary Patterson put the city's position this way: "We really have no discretion. We literally have to comply with the law."
What the City Still Gets to Decide
The ADU law leaves Coeur d'Alene some choices. The Oct. 13 workshop of the Planning and Zoning Commission was about those choices, and the staff report says the city had wanted to address "neighborhood compatibility issues" in its ADU code even before the state acted. According to the Press account, these questions were still open when the workshop ended:
- Height in the principal building envelope. The city can keep its 32-foot allowance or tie ADU height to the main home's height. Patterson expected "some serious outcry on that."
- Rear-yard height. The city can still limit rear-yard ADU heights where they raise safety and firefighting concerns. P&Z Chair Tom Messina said, "Safety is the primary factor in the whole thing."
- Parking. The city can keep requiring a stall where the street can't absorb more on-street parking, or it can drop ADU parking requirements altogether.
- Placement. The city can allow ADUs inside the main home, detached in the rear yard, detached or attached within the principal building envelope, or some combination.
- Size. City Attorney Randy Adams summed it up: "We can put a limit on size as long as it's greater than the minimum."
Staff will draft amendments based on the commission's input and "schedule public hearings to meet the February 1, 2027 deadline." The statute requires those changes to go through Idaho's standard notice-and-hearing process. Owners and buyers will get public notice and a chance to weigh in before the final numbers are set.
HOA Covenants Got Their Own Paragraph
Many second-home buyers care more about this part of SB 1354 than the city section. The bill also amended Section 55-3212 of Idaho Code, which governs homeowner's associations. The population threshold for cities is in 67-6541. The covenant language is in a separate chapter, and it reads:
"No homeowner's association shall add, amend, or enforce any covenant, condition, or restriction in such a way that limits or prohibits accessory dwelling units, as defined in section 67-6541, Idaho Code, on any property, land, or structure thereon within the jurisdiction of a homeowner's association, unless the owner of the affected property expressly agrees in writing to such addition or amendment of a covenant, condition, or restriction."
The same section lets an HOA adopt "reasonable rules" for internal ADUs. Those rules can cover architectural design consistent with the main home, size, height, setbacks, open space, parking and bedrooms. It also preserves valid covenants that limit an owner's right to transfer an interest in the property, as long as they applied when the owner acquired it. If you're buying in a planned community, the CC&Rs and the association's current rules now sit alongside this statute.
Outside City Limits, a Different Name and a Different Cap
The city law doesn't reach parcels in unincorporated Kootenai County. There, Community Development calls these units Accessory Living Units, and the rules differ. According to the county's ALU information sheet, most parcels can have one if zoning and agency standards are met. Parcels over the Rathdrum Prairie Aquifer need at least 10 acres under the health district's density limit. The application goes in with the building-permit submittal and carries an $85 fee.
The county application caps an ALU at the greater of 1,000 square feet of habitable space or 50% of the main home's habitable space. Underlying-zone setbacks for accessory buildings also apply. On a large rural or lakeside parcel, the cap depends on the size of the main house. Whether a parcel is over the aquifer can matter more than anything in the city debate.
Starter-Home Lots and the Land Math
The third law affects people buying acreage inside the city. Senate Bill 1352 bars cities over 10,000 from banning "starter home subdivisions" in residential zones. It defines them as subdivisions of at least four acres with detached homes on lots "no greater than one thousand five hundred (1,500) square feet." By Feb. 1, 2027, a city's minimum lot size for these subdivisions can't exceed 1,500 square feet, except where infrastructure, configuration or environmental constraints make that infeasible.
Coeur d'Alene's traditional starter-home minimum has been 3,500 square feet. In the Press account, Senior Planner Sean Holm called 1,500 "very, very, very, very tight." For anyone weighing a four-acre-plus parcel inside city limits, the new floor changes the lot count a site can support on paper. Water, sewer and road capacity still decide how much of that holds up.
Questions We're Hearing
Does the 800-square-foot cap in the city's packet still apply?
The packet and the published code still list it. SB 1354 directs the city to stop limiting ADUs below the state threshold, and the city is rewriting its code to comply by Feb. 1, 2027. The Coeur d'Alene Planning Department can be reached at 208-769-2274 for how it is handling a specific application.
Does any of this apply in Hayden or Post Falls?
The city provisions of SB 1352 and SB 1354 apply to any Idaho city with a population greater than 10,000. Each city sets its own amendments.
Is a guest house on a county parcel covered by the city changes?
The city provisions of SB 1354 cover cities, so unincorporated parcels follow Kootenai County's ALU rules, including the aquifer acreage requirement and the 1,000-square-foot or 50% cap.
This post is general information, not legal, tax or financial advice. Before you rely on any of these rules for a purchase, permit or rental plan, confirm how they apply to your property with an attorney and the city or county planning office.
If you're trying to put a number on what a guest house, a second unit or a subdividable acre adds to a property right now, we're glad to help. Chris has spent years working on land and development questions in North Idaho, and we can walk through how these rules apply to a specific lot. Start with a conversation or a Free Instant Valuation from Kate & Chris Neu.
