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.
SB 1117, by Senator Sabrina Cervantes and sponsored by California YIMBY, was approved by Governor Newsom and chaptered on September 29, 2026 (Chapter 809, Statutes of 2026). From January 1, 2027, on a lot with up to two ADUs, a city can charge impact fees on an ADU larger than 750 square feet only on the square footage above 750. It removes the fee cliff that has pushed so many California ADUs to stop at exactly 749 square feet.
A 1,000-square-foot ADU used to be charged on all 1,000 square feet once it crossed 750. Starting in 2027 it is charged on 250. On most single-family lots that cuts the impact fee on a larger ADU by roughly three quarters, which makes a real two-bedroom unit easier to pencil. Units under 750 square feet still pay nothing.
How ADU impact fees work today
Impact fees are the one-time charges a city or special district levies under the Mitigation Fee Act to pay for parks, traffic, fire, sewer and other capacity a new home uses. State ADU law already limits them in three ways:
- An ADU with less than 750 square feet of interior livable space, or a JADU under 500 square feet, pays no impact fees at all.
- An ADU over 750 square feet can be charged, but only "proportionately in relation to the square footage of the primary dwelling unit."
- A local agency, special district or water corporation generally cannot treat an ADU as a new residential use when setting connection fees or capacity charges, unless the ADU is built with a new single-family home.
The problem was the second rule. Once a unit hit 751 square feet, the proportional fee applied to the whole unit. That cliff is why so many permit sets come in at 749 square feet, and why two-bedroom ADUs are rarer than the market wants.
What SB 1117 changes: fees on the area over 750 square feet
SB 1117 keeps the proportional formula but changes what goes into it. For up to two ADUs on a lot, the fee on an ADU over 750 square feet is charged proportionately to the primary dwelling, and only on the area in excess of 750 square feet of interior livable space. For a property with more than two ADUs, the old full-square-footage formula stays. Assembly amendments added that two-ADU limit late in the session.
Best Best & Krieger's example: if the impact fee for a 2,000-square-foot house is $20,000, a 1,000-square-foot ADU paid $10,000 under the old rule ($20,000 × 1,000 ÷ 2,000). Under SB 1117 it pays $2,500 ($20,000 × 250 ÷ 2,000).
ADU impact fees by size, old rule vs. 2027
Using that same $20,000 fee for a 2,000-square-foot house:
| ADU size | Old rule (whole unit) | SB 1117 (area over 750) |
|---|---|---|
| Under 750 sq ft | $0 | $0 |
| 850 sq ft | $8,500 | $1,000 |
| 1,000 sq ft | $10,000 | $2,500 |
| 1,200 sq ft | $12,000 | $4,500 |
Your city's actual fee schedule will differ, but the ratio holds: the larger the house and the closer the ADU is to 750 square feet, the bigger the cut. For the full picture of what a unit costs to build, see our ADU cost guide.
Who benefits — and who does not
The winners are single-family owners building one or two larger detached ADUs. That pairs directly with AB 956, signed the same day, which lets a single-family lot hold two detached ADUs from 2027. Two units under 750 square feet pay no impact fees; two units of 900 square feet pay fees on 150 square feet each.
Multifamily projects with three or more ADUs under SB 1211 do not get the new calculation. On those lots, keeping each unit under 750 square feet is still the cleanest way to avoid impact fees, which is how most of the eight-ADU projects we see are already designed.
SB 1117 also does not touch the connection-fee and capacity-charge rules, and it does not change permit or plan-check fees, which are not impact fees. School district fees are levied separately; ask your district what it charges before you budget.
What to do if you are permitting an ADU now
The new formula applies from January 1, 2027. Fees are usually calculated and paid at permit issuance, so if you are designing an ADU over 750 square feet and your permit would issue in December, ask your city whether it is worth timing issuance for January. Cities will need to update fee schedules and calculators, so check the line items on your fee estimate against the statute.
Our recommendation: stop designing to 749 square feet by reflex. On a single-family lot, run the numbers on an 850- to 1,000-square-foot two-bedroom against the extra rent it earns — our ADU rental income guide shows how appraisers value that space. Parcy's ADU calculator will show cost, rent and return for both sizes on your address.
Frequently asked questions
How much are ADU impact fees in California?
An ADU under 750 square feet pays no impact fees. Above 750 square feet, the fee is proportional to the main house's square footage. From January 1, 2027, on lots with up to two ADUs, SB 1117 limits that proportional fee to the area above 750 square feet.
Does SB 1117 apply to multifamily lots with many ADUs?
No. The new calculation applies only to properties with two ADUs or fewer. On a lot with more than two ADUs, such as an SB 1211 project, a unit over 750 square feet is still charged on its full square footage.
Does SB 1117 change utility connection fees?
No. Existing rules on connection fees and capacity charges stay the same: a city or water district cannot treat most ADUs as a new residential use for those charges, and converted-space units generally pay none.
When does SB 1117 take effect?
January 1, 2027. It was approved by Governor Newsom and chaptered on September 29, 2026 as Chapter 809, Statutes of 2026.
Official bill text
- SB 1117 — Accessory dwelling units and junior accessory dwelling units. (official bill text, California Legislative Information)
- AB 956 — Accessory dwelling units and junior accessory dwelling units. (official bill text, California Legislative Information)
Sources
- SB 1117 (2025-26): bill status, chaptered text and floor analysis — Chaptered September 29, 2026, Chapter 809, Statutes of 2026; sponsored by California YIMBY
- AB 956 (2025-26): bill status and chaptered text — Chaptered September 29, 2026, Chapter 791, Statutes of 2026
- Best Best & Krieger: California further expands state ADU law (October 2026) — Worked fee example ($20,000 fee, 2,000 sq ft house, 1,000 sq ft ADU)
- HCD: Accessory Dwelling Units — ADU handbook, fee rules
- SB 1117
- ADU impact fees
- ADU impact fees California 2027
- 750 square foot ADU fee exemption
- how much are ADU impact fees
- ADU fees over 750 square feet
- SB 1117 Cervantes
- California ADU
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Informational only. Not legal, architectural, or investment advice. Confirm current rules with your local planning department.