Informational only, not legal advice. ADU rules change often and differ by city. Confirm with your local planning department before you rely on anything here.
AB 2058, by Assemblymember John Harabedian (D-Pasadena), and its companion AB 1815, by Assemblymember Buffy Wicks (D-Oakland), were signed by Governor Newsom on September 29, 2026 as Chapters 783 and 782 of the Statutes of 2026. AB 2058 caps local permit and inspection fees on factory-built homes at half of what a site-built home pays; AB 1815 stops cities from layering local building rules on top of the state code. Both take effect January 1, 2027, and both tilt the math toward modular and panelized ADUs.
From January 1, 2027, a factory-built ADU with an HCD insignia should cost less to permit and inspect: local fees are capped at 50% of the site-built fee unless the city adopts evidence-backed findings that its costs are higher. Zoning, setbacks, and ADU size and height rules don't change. Ask your city how it will apply the cap before you pay a 2026 fee schedule.
What AB 2058 changes for factory-built housing fees
Under the Factory-Built Housing Law, a home or component built in a factory is plan-checked and inspected in the plant under HCD oversight, then gets an HCD insignia before it ships. The city handles installation on your lot, yet many cities charged the same fees as for a house framed on site.
AB 2058, per its digest and committee analyses:
- Fee cap. A local agency may not set a permitting fee or an installation inspection fee for factory-built housing above 50% of the equivalent fee for non-factory-built housing. It can go higher only with a written finding and substantial evidence of its reasonable costs.
- Private inspection option. The first user (the owner buying the home) can choose a private quality assurance agency supervised by HCD to inspect the installation instead of the city. If you choose one, the city can't charge an inspection fee for the home (sitework such as grading and foundations can still be charged). This starts only after HCD adopts regulations, due by January 1, 2029.
- No damage during inspection. Neither the city nor a private agency may take apart, damage or destroy a factory-built unit to inspect it.
The city keeps its authority to issue or withhold the certificate of occupancy. The bill drew no no votes: 73-0 on the Assembly floor on May 22, 2026 and 78-0 on concurrence on August 28, 2026.
AB 1815: no local building standards above the state code
A factory that ships to 50 cities can't build 50 versions of the same module. Under AB 1815, a city or county may not impose or enforce building standards on a factory-built housing project that exceed the state's mandatory minimums, including local energy and green building amendments. If a project mixes factory-built and site-built structures, the limit applies only to the factory-built part.
A city can still modify the code where it makes an express finding that a change is reasonably necessary because of local climatic, geological or topographical conditions, including wildfire and flood risk, and files that finding with the Building Standards Commission. Code interpretations are presumed to favor factory-built housing unless an official makes a written, evidence-backed finding of a conflict with state standards or a specific health or safety impact. The Senate floor analysis describes the qualifying test as a building that is at least two-thirds residential with at least 30% of the residential area built from factory-built housing.
Prefab ADU vs. site-built: does the math change?
The Senate Housing Committee analysis of AB 2058 cites Terner Center research finding factory-built construction can cut a project's hard costs by 10–25% and shorten build time significantly. Fees are a smaller line, and impact fees and utility connections aren't touched (for those, see SB 1117 and ADU impact fees).
| Item | Site-built ADU | Factory-built ADU (from January 1, 2027) |
|---|---|---|
| Local permitting fee | City fee schedule | No more than 50% of the site-built fee, unless the city adopts cost findings |
| Installation inspection fee | City fee schedule | No more than 50%; none if you use an HCD-supervised private inspector (after HCD regulations, due by January 1, 2029) |
| Local building code amendments | Apply | Only with climate, geology or topography findings filed with the state |
| Impact fees, school fees, utility connections | Apply | Unchanged by these bills |
| Zoning, setbacks, height, ADU size | State ADU law and city ordinance | Same |
Two cautions: the cap covers factory-built housing with an HCD insignia, not HUD-code manufactured homes, so ask your manufacturer which label it uses. And cities will update fee schedules at different speeds; check yours before you budget.
How this fits with ADUs, SB 1211 and SB 684
Nothing here creates a new right to build. That still comes from one detached ADU plus a JADU on most single-family lots (see our detached ADU guide), up to eight detached ADUs behind an apartment building under SB 1211, or up to ten small homes under SB 684 and SB 1123. These bills matter most where units repeat: eight identical cottages or ten starter homes are what a factory does well. Our recommendation: if you are pricing a project for 2027, get one factory-built bid alongside your site-built bids, ask the manufacturer to confirm the HCD insignia, and ask the city in writing how it will apply the AB 2058 cap. This is not legal advice; a land-use attorney should confirm how the new rules apply to your lot. Our ADU cost guide covers the rest of the budget.
Frequently asked questions
Does AB 2058 lower permit fees for a prefab ADU?
If the ADU is factory-built housing with an HCD insignia, yes: from January 1, 2027, local permitting and installation inspection fees can't exceed 50% of the equivalent fee for a site-built home, unless the city adopts written findings showing its reasonable costs are higher.
Does AB 2058 reduce ADU impact fees or utility connection fees?
No. The cap covers local permitting and inspection fees for factory-built housing. Impact fees, school fees and utility connection charges are governed by other rules, including SB 1117 for ADU impact fees.
Can a city apply its local building code amendments to a modular home?
Under AB 1815, not beyond the state's mandatory minimums for the factory-built portion, unless the city makes and files findings that a change is reasonably necessary because of local climate, geology or topography, including wildfire and flood risk.
When can I use a private inspector instead of the city for a factory-built ADU?
Only after HCD adopts regulations for quality assurance agencies doing onsite inspections, which AB 2058 requires by January 1, 2029. If you use one, the city can't charge an inspection fee for the home itself.
Is a manufactured home the same as factory-built housing?
No. HUD-code manufactured homes and mobilehomes are a separate program. AB 2058 and AB 1815 apply to factory-built housing under the state Factory-Built Housing Law, which carries an HCD insignia.
Official bill text
- AB 2058 — California Factory-Built Housing Law. (official bill text, California Legislative Information)
- AB 1815 — Factory-built housing: building standards and local requirements. (official bill text, California Legislative Information)
- SB 1117 — Accessory dwelling units and junior accessory dwelling units. (official bill text, California Legislative Information)
Sources
- AB 2058 (2025-26): status, votes, analyses and chaptered text — Chapter 783, Statutes of 2026; 50% fee caps; private QAA option after HCD regulations due January 1, 2029; Assembly 73-0 May 22, concurrence 78-0 August 28, 2026; Senate Housing analysis citing Terner Center 10–25% hard-cost savings
- AB 1815 (2025-26): status, votes, analyses and chaptered text — Chapter 782, Statutes of 2026; no local building standards above state minimums; rebuttable presumption; Senate floor analysis August 24, 2026
- Governor Newsom signs housing legislation (September 29, 2026) — Signing release listing AB 1815 (Wicks) and AB 2058 (Harabedian)
- HCD: Factory-built housing insignia — Factory-built housing sold to first users must bear an HCD insignia (Health and Safety Code § 19980)
- Housing Action Coalition: Why HAC supports AB 1815 — Background on local code amendments and factory-built housing
- AB 2058
- AB 1815
- factory-built housing California
- prefab ADU permit fees
- modular ADU California 2027
- factory-built housing fee cap
- prefab ADU vs site-built
- HCD factory-built housing insignia
- California Factory-Built Housing Law
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Informational only. Not legal, architectural, or investment advice. Confirm current rules with your local planning department.