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California May Charge ADU Fees Only on the Space Over 750 Feet

Chris Koss, AIA|Published September 9, 2026

California already waives impact fees on ADUs under 750 square feet. A bill now on Governor Newsom's desk, SB 1117, would charge the fees on a larger unit only for the square footage above 750, not the whole thing.

Photo: the Elmore Bay ADU, a detached California accessory dwelling unit, via Perpetual Homes ADU. Bill text via California Legislative Information.

You budgeted your 1,000-square-foot backyard house down to the impact fees, and then the counter billed you as if all 1,000 feet were fresh demand on the city's sewers, roads, and parks. A bill sitting on Governor Newsom's desk, SB 1117, would let California charge those fees on only the space above 750 square feet, so a 1,000-square-foot ADU is billed on 250 feet, not the whole unit.

The short version:

  • SB 1117 amends Government Code Section 66311.5 so that impact fees on an ADU larger than 750 square feet are calculated on the area above 750, not the unit's full size, for up to two ADUs on a lot.
  • ADUs of 750 square feet or less, and junior ADUs of 500 square feet or less, already owe no impact fees at all. That floor does not move.
  • The bill cleared both houses and reached the Governor on August 30, 2026. He has until roughly September 30 to sign it, veto it, or let it become law.

The number: 250 feet, not 1,000

Impact fees are the charges a city collects to offset a new home's draw on shared infrastructure, and California already sorts ADUs into two boxes by size. Build 750 square feet or less and the fee is zero. Build bigger and the fee has, for years, been charged "proportionately in relation to the square footage of the primary dwelling unit." What that sentence never settled was the base: proportional on what, the whole ADU or only the part over 750? Cities read it both ways, and the expensive reading tended to win.

SB 1117 picks the cheaper reading and writes it into the code. For the first two ADUs on a lot, the fee is charged only on the square footage past 750. Here is what that does to the billable area, holding everything else equal:

ADU sizeFee base today (full unit)Fee base under SB 1117 (space over 750)
750 square feet or less0 feet0 feet
800 square feet800 feet50 feet
1,000 square feet1,000 feet250 feet
1,200 square feet1,200 feet450 feet

Read the bottom rows like a homeowner, not a planner. For a 1,000-square-foot unit, the fee base drops from 1,000 feet to 250, roughly a 75 percent cut in the number the city multiplies against. For an 800-foot unit it lands a rounding error away from the exemption you would have kept by building 50 feet smaller. The dollar figure still depends entirely on your city's fee schedule, because impact fees are set locally within the limits California's ADU law allows, and they range from modest to brutal. SB 1117 does not cap the rate. It shrinks the number of feet the rate applies to.

From the text

"For up to two accessory dwelling units on a lot, any impact fees charged for an accessory dwelling unit that has more than 750 square feet of interior livable space shall be charged proportionately in relation to the square footage of the primary dwelling unit, and only on the area in excess of 750 square feet of interior livable space."

That is Government Code Section 66311.5, subdivision (c)(1)(B), as SB 1117 would amend it. The two operative words are "only on." They turn a fight cities were having with homeowners into arithmetic. Note the ceiling, though: the relief covers the first two ADUs on a lot. A third unit, on the properties zoned to allow one, returns to being charged on its full size under the next subdivision, which is worth reading if you are stacking units. We flagged where this 750-foot line already sits when we walked the LA school-fee math, and SB 1117 is that same line, drawn more cleanly.

The cross-street check. California is fixing a definition here, not inventing generosity, and the contrast with the other markets we cover makes that plain. Washington did not wait for a base-versus-excess argument: HB 1337 simply caps an ADU's impact fees at 50 percent of the single-family charge outright, a blunter and arguably stronger tool than California's size formula, as we covered when Washington halved its fees and scrapped transit parking. New York City runs no size-tiered impact-fee waiver like this at all; the money question there is not a fee base but the retrofit bill, the sprinklers and egress a basement needs before it can go legal. Same goal, three regimes, and only California is arguing about which square feet count.

The decision this changes

Our read: SB 1117 is a clarification wearing a tax cut's clothes, and that is not a knock. The 750-foot threshold has been law for years; what changed is that a homeowner near the line no longer has to gamble on how their city reads a comma. If you are planning an ADU larger than 750 square feet, the bill lowers the penalty for every foot above the floor, which means the old reflex to shrink under 750 to dodge fees loses some of its pull. Going a little bigger, a real second bedroom instead of a sleeping nook, now carries its impact fee on the extra feet alone rather than on the whole footprint. For a first-time owner weighing a 720-foot studio against a 950-foot one-bedroom, that gap is smaller than it was a month ago.

The caveat is that a smaller base is not no bill. In a city with an aggressive fee schedule, 250 feet of impact fee is still real money, and it lands on the same permit stack as your plan check, your school fees, and your utility connection. Budget it as one line among many, not as a windfall.

If you want to see how your own city's charges add up before you lock in a size, A-du's permit fee calculator breaks the number down line by line.

Watch the Governor's desk: the deadline is the end of September, and if he signs, the change would take effect with the new year, in time for the 2027 permit season.

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