Yes. If the project encompasses any part of a public right of way, you will need to acquire a right of way permit.
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Your HOA must allow its residents to use Xeric landscaping. C.R.S. (§ 37-60-126, et seq.) states that HOA’s are prohibited from creating restricting covenants that forbid xeriscape or drought tolerant vegetation or require ground covering consisting of only turf. You must still follow the town laws put forward in the Unified Development Code (UDC), so you can’t cover your entire lawn with rock or concrete.
Estimating the water savings associated with xeriscaping can be a bit complicated because of the wide variety of options and projects. Some studies have shown that xeriscaping can save households 120 gallons of water/day.
As with any new landscaping, you will need to change the way its watered. You can water by hand, or change up your existing irrigation system to fit the needs of the new plants.