CALI BUILDERS & CONSTRUCTION INC. | HOMEOWNER GUIDE
What changes on January 1
In brief: Governor Newsom signed AB 956 (Chapter 791) and SB 1117 (Chapter 809) on September 29, 2026. Both take effect January 1, 2027. AB 956 expands a qualifying two-detached-ADU pathway; SB 1117 uses only the area above 750 square feet for certain impact-fee calculations. Existing rules apply until then. Filing date alone does not settle which rules govern a project; confirm timing with the responsible agency. [1, 2]
On September 29, 2026, Governor Newsom signed housing legislation that changes qualifying ADU approvals and impact-fee calculations. AB 956 expands the specified single-family-lot pathway to two detached, newly constructed ADUs. SB 1117 revises the proportional impact-fee calculation for eligible projects. Both changes take effect January 1, 2027.
Existing ADU requirements and exemptions discussed below already apply. Application submission, plan approval, permit issuance and fee assessment are separate events; filing date alone does not settle which rules govern a project. Confirm the applicable requirements with the responsible agencies before accelerating or delaying an application.
Cali Builders serves Sherman Oaks, Studio City, Encino, Tarzana, Woodland Hills and North Hollywood. The following guide explains the changes and the questions to ask for your property.
On this page
Should you file before or after January 1?
| Your situation | What changes | What to do |
|---|---|---|
| Permit-ready; over 750 sq. ft. | An eligible project has less area counted in the proportional impact-fee calculation. | Confirm applicability and assessment timing; compare documented savings with the cost of delay. |
| 750 sq. ft. or less | Qualifying units are already exempt from the impact fees defined by state ADU law. | Confirm eligibility and the separate permit, school and utility charges. |
| Two detached units | AB 956 expands the statewide requirement. Existing pathways or local rules may already allow your configuration. | Ask what is permitted now and what changes in January. |
| At the idea stage | Site investigation remains necessary; the proposed number of units can affect the design. | Begin property review, utility investigation and design planning. |
| Garage conversion | A conversion may qualify under a separate statutory category and existing fee protections. | Confirm the unit category, interior livable area and applicable exemptions. |
AB 956: Can a single-family lot have two detached ADUs?
AB 956 (Quirk-Silva), Chapter 791, Statutes of 2026, amends Government Code section 66323 and Civil Code sections 714.3 and 4751. It increases the detached new-construction category in section 66323 from one ADU to two on a lot with a proposed or existing single-family dwelling, subject to the statutory requirements. [1]
Ministerial review applies the governing objective requirements without discretionary design review or a public hearing. It does not eliminate every other applicable approval or make any proposed design automatically entitled to approval.
What the statute protects under this pathway
| Standard | Protection or condition |
|---|---|
| Size | A local agency may impose an 800-square-foot cap on each detached unit under this section. This is not a universal statewide maximum for every ADU. |
| Side and rear setbacks | A local agency may not require side or rear setbacks greater than four feet for these units. |
| Height | A local agency generally must allow at least 16 feet. On qualifying lots within one-half mile walking distance of a major transit stop or high-quality transit corridor, the allowance increases to 18 feet, with an additional two feet to accommodate a roof pitch aligned with the primary dwelling. |
| Other zoning standards | Lot coverage, front setback, design-review, parking, minimum-lot-size, open-space and floor-area-ratio standards are not authorized conditions for qualifying units under this section. Applicable building and safety requirements remain relevant. |
These are protected allowances, not universal maximum heights or sizes. Local ordinances may be more permissive. The height provisions are in Government Code section 66321(b)(4), incorporated by reference into section 66323. [1, 3]
Building, fire and health-and-safety requirements continue to apply, subject to the specific exceptions and limits in state ADU law. Review wildfire construction standards, access, water supply and sprinkler requirements for the actual site. [3]
How two detached units affect a JADU
Under the amended section 66323(b), a local agency is not required to ministerially approve a JADU on the same lot where two detached, newly constructed ADUs have been constructed under section 66323(a)(2). This is a limit on the state-mandated approval obligation, not a universal prohibition. [1]
Section 66323 retains a separate conversion-ADU category. Check the proposed combination against the statute and the units already on the lot. Do not treat a particular home count as a universal statewide ceiling; other development pathways or more permissive local ordinances may produce different results.
Site planning still determines what fits
AB 956 requires ministerial approval of qualifying applications for two detached units. Whether they fit well alongside the primary dwelling depends on the individual lot.
Setbacks and fire separation are different
A property-line setback is different from separation between buildings. Under this pathway, a local agency may not require side or rear setbacks greater than four feet. Building separation and fire-resistance requirements must be evaluated separately. Depending on the design and distance between buildings, facing walls may require fire-rated construction.
Two units need a coordinated site plan
Each unit needs compliant utility design and access, and each has its own relationship to the primary dwelling and street. Compare one detached unit, two detached units, and a detached unit plus a conversion ADU for layout, cost and rental potential before fixing the design.
A site visit, survey and review of the applicable requirements help establish which configurations are feasible.
Restrictive covenants and homeowners associations
AB 956 also amends the Civil Code provisions governing restrictive covenants and homeowners associations. It changes their coverage from lots zoned for single-family residential use to lots zoned to allow single-family residential use. Reasonable restrictions remain subject to the statutory limits. If an HOA has refused an ADU, review its position against the applicable law rather than assuming the refusal settles the issue. [1]
SB 1117: How do 2027 rules change impact fees on ADUs over 750 square feet?
SB 1117 (Cervantes), Chapter 809, Statutes of 2026, amends Government Code section 66311.5. Its new excess-area calculation takes effect January 1, 2027. [2]
Already in force since January 1, 2026 under SB 543: qualifying ADUs with 750 square feet or less of interior livable space are exempt from the impact fees defined by California ADU law. JADUs with 500 square feet or less of interior livable space are likewise exempt. Permit, plan-check, school and applicable utility charges follow separate rules. [3]
For up to two ADUs on a lot, SB 1117 requires impact fees on an ADU over 750 square feet of interior livable space to be charged proportionately in relation to the primary dwelling unit, and only on the area above 750 square feet. The proportional method is not new; restricting its area input is the change. [2]
For properties with more than two ADUs, the statute retains the proportional calculation without the excess-only limit. If you are planning a third ADU, including a conversion ADU, confirm the applicable calculation instead of assuming the first two retain the new treatment. [2]
What the fee change means for your budget
Under the existing approach, crossing the 750-square-foot threshold could cause the proportional calculation to use the entire ADU area. SB 1117 introduces an excess-area calculation for eligible projects. Actual savings depend on the applicable fees, primary-dwelling area and project eligibility. [2]
Charges the new calculation does not automatically waive
- Building-permit and plan-check fees: These are separate from impact fees and are not automatically waived by this change.
- Utility connection and capacity charges: Separate rules apply. Existing law restricts separate-connection requirements for certain qualifying conversion units; the answer depends on the unit category and statutory exceptions. [2]
- School fees: The new excess-area calculation does not change the separate school-fee rules. [2, 3]
Impact fees help fund public facilities and infrastructure. The statutory definition excludes utility connection fees and capacity charges. They are one part of an ADU budget, not the entire budget. SB 1117 expressly applies its amendment to charter cities, including the City of Los Angeles. [2]
Illustrative example: a 1,000-square-foot ADU
For an eligible ADU containing 1,000 square feet of interior livable space, the excess-area calculation uses 250 square feet – the area above 750 – instead of the full 1,000 square feet. This illustrates the area component only. It is not a City of Los Angeles fee quote or a statement of total project savings.
| ADU interior livable area | Area above 750 sq. ft. | Area removed from a full-unit calculation |
|---|---|---|
| 800 sq. ft. | 50 sq. ft. | 93.75% |
| 1,000 sq. ft. | 250 sq. ft. | 75% |
| 1,200 sq. ft. | 450 sq. ft. | 62.5% |
These percentages are not reductions in construction cost, total permit charges or the project budget. Dollar savings require the applicable fee schedule and confirmation that the project qualifies.
So should you wait?
Design and permitting schedules vary by project. Compare the applicable requirements and any documented fee difference with your anticipated schedule and the cost of delay.
For a project involving two detached units above 750 square feet each, the approval expansion and fee calculation must each be checked on their own terms. A single eligible unit at or below 750 square feet already benefits from the existing impact-fee exemption. Obtain a project-specific explanation before making a timing decision.
What these laws do not resolve
State approval protections and fee changes do not replace the investigation needed to design and budget an actual project.
Wildfire requirements
Check the property's current fire-hazard designation and applicable wildfire construction, defensible-space, access and water-supply requirements. A fire-hazard designation is not automatically a prohibition on an ADU. State ADU law also limits certain requirements, including fire sprinklers. Review the actual property and proposed work. [3]
Utility capacity
Each unit needs a compliant utility design. Whether it requires a separate connection, meter or service upgrade depends on the unit category, existing capacity and applicable requirements. Existing law limits separate-connection requirements for some qualifying conversion units. An upgrade, where needed, can be a significant additional cost. [2, 3]
Site conditions
Slope, soils, drainage, protected trees, easements and site access can affect what fits and what it costs. Investigate these for the property rather than assuming a standard backyard plan will work.
Plan-check requirements
AB 1621 limits agency-required building-permit plan-check reviews under the applicable postentitlement process to two. For projects with 25 units or fewer, a compliance determination is generally required within 30 business days after completeness, subject to specified exceptions. This is not a guarantee of permit issuance in 30 days. A noncompliant application may be denied after those reviews; applicants may request additional submissions. [4]
Local ordinance variation
State law establishes protections that local ordinances must respect. The City of Los Angeles, unincorporated Los Angeles County and surrounding cities have different permitting jurisdictions and may adopt more permissive ADU rules. Check the current ordinance, applicable state requirements and fee schedules for the property. Similar lots on opposite sides of a jurisdictional line can produce different answers.
Other housing laws in the package
The following laws create separate housing-development or permitting tools. They should not be confused with the ADU pathways described above.
AB 1751: Missing Middle Townhome Ownership Act
AB 1751 creates a ministerial, CEQA-exempt pathway for qualifying townhome developments and subdivisions of up to 150 units. Townhomes may be up to three stories of occupiable floor area, with project-wide average size no greater than 1,750 net habitable square feet per unit. Projects with 11 or more units must provide at least 10% of the applicable unit total for lower-income households for at least 45 years; a higher applicable local inclusionary requirement may control. [5]
Certain underutilized sites zoned exclusively for single-family residential development can qualify, subject to substantial restrictions. This is not blanket permission for townhomes on every occupied single-family property. Site eligibility, density, subdivision requirements and other statutory conditions must be reviewed separately from ADU eligibility.
SB 1116: Qualifying small-lot subdivisions
SB 1116 expands the Starter Home Revitalization Act framework. On qualifying multifamily-zoned sites, newly created parcels can be as small as 480 square feet if their average size is at least 600 square feet. On qualifying single-family-zoned sites, the corresponding figures are 960 square feet and a 1,200-square-foot average. [6]
Floor-area-ratio and setback protections apply within the qualifying statutory pathway, not to residential land generally. This is a subdivision and housing-development provision rather than an ADU approval provision.
SB 1014: Earlier information about required improvements
SB 1014 allows eligible applicants to request an early, nonbinding estimate of required onsite and offsite improvements. A separate provision limits a city's ability to demand improvements absent from a later itemized list associated with a complete postentitlement permit application, subject to exceptions. [7]
The preliminary estimate is informational. The later list carries the specified protection, with exceptions including certain health-and-safety findings and applicant-requested scope changes. The early estimate and later list should not be treated as the same document.
What to do between now and January
Whatever you decide about filing dates, use the time to resolve the questions that affect both design and budget.
- 1. Confirm which rules apply. Ask the responsible agencies how they will apply approval requirements and fees to your project, including an application already under review.
- 2. Investigate the site. Check electrical capacity, sewer routing and condition, slope, setbacks, protected trees and easements. Obtain survey, soils and engineering work where applicable.
- 3. Design with the thresholds in view. The 750-square-foot fee threshold and a possible 800-square-foot cap under section 66323 serve different purposes. Compare the benefits and costs of extra space deliberately.
- 4. Plan both detached units together. Coordinate utility design, access, building separation and the relationship to the primary dwelling before fixing the site plan.
- 5. Compare the complete financial picture. Weigh documented fee differences against financing, construction pricing and delayed rent or personal use. Survey, design and permitting schedules vary.
How Cali Builders can help
Cali Builders & Construction Inc. provides ADU construction, home additions and whole-home remodels across the San Fernando Valley.
Cali Builders | Licensed general contractor | CSLB #1051566 | Class B General Building
If you are weighing an ADU, we can walk the property, identify site conditions that drive cost and help you get the fee question answered for your address rather than from a statewide average.
Call (800) 863-0011 to arrange a site visit, or send us your address and what you are considering so we can respond with a planning range.
If it is after office hours, send your project details and request a call back.
Reviewed October 17, 2026 using third-party reproductions of chaptered legislation and official California HCD guidance. Direct access to California Legislative Information was unavailable during review. This is general information, not a determination of eligibility, fees or approval for any particular property. Confirm current requirements and fees with the responsible agencies.
Sources
- AB 956, Chapter 791 (2026): chaptered-text reproduction · official chaptered text
- SB 1117, Chapter 809 (2026): chaptered-text reproduction · official chaptered text
- California HCD ADU Handbook, March 2026
- AB 1621: chaptered-text reproduction
- AB 1751: chaptered-text reproduction
- SB 1116: chaptered-text reproduction
- SB 1014: chaptered-text reproduction
- California Senate legislative calendar: January 1, 2027 effective-date entry