SB 1117 Lowers Impact Fees on ADUs Over 750 Square Feet

California bill SB 1117 changes local impact fees for accessory dwelling units. See how the marginal fee calculation applies to units over 750 square feet.

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Subject: ADU · Avorino
Written by: Avorino
Published: October 3, 2026
Reading time: 4 min read

Governor Signs SB 1117 to Alter ADU Impact Fees

Governor Gavin Newsom signed into law SB 1117, authored by Senator Sabrina Cervantes (D-Riverside), regarding accessory dwelling units and junior accessory dwelling units. The legislation eliminates arbitrary fees on accessory dwelling units to lower construction costs.

Under current law, an ADU of 750 square feet or less is exempt from most local impact fees. However, in many jurisdictions, ADUs over 750 square feet must pay the full impact fee per square foot, including the first 750 square feet that would otherwise be exempt.

SB 1117 switches local calculations to a marginal fee structure. Instead of charging fees based on the entire ADU's size once it exceeds 750 square feet, local governments can only charge proportionally for the square footage above 750 square feet for the first two ADUs on a property.

Fee Basis Under SB 1117

Fee Basis Under SB 1117
Unit count and size	Impact fee rule under current law	Impact fee rule under SB 1117
First two ADUs: 750 square feet or less	Exempt from most local impact fees	Exempt from most local impact fees
First two ADUs: over 750 square feet	Full impact fee per square foot on entire unit	Proportionally for the square footage above 750 square feet
Additional ADUs beyond the first two	Assessed for the entire home	Assessed for the entire home

What this means for Orange County homeowners

If you apply for an ADU permit for a unit over 750 square feet, local governments can only charge proportionally for the square footage above 750 square feet for the first two ADUs on a property. Your local jurisdiction cannot charge impact fees based on the entire ADU's size on those initial builds.

If your property includes additional ADUs beyond the first two, those additional units will be assessed for the entire home.

The city's 60-day review period applies to a complete application, and each correction round restarts it, so real permit turnaround often runs longer.

How does SB 1117 change fees for units over 750 square feet?

SB 1117 changes fees by switching to a marginal fee structure where local governments can only charge proportionally for the square footage above 750 square feet for the first two ADUs on a property. Under previous practice, ADUs over 750 square feet had to pay the full impact fee per square foot, including the first 750 square feet.

According to California YIMBY, removing this fee cliff creates a substantive change that will help create more family-sized ADUs and reduces a cost barrier that has limited ADU flexibility.

Are additional ADUs on a property exempt from full impact fees?

No, additional ADUs beyond the first two on a property will be assessed for the entire home under SB 1117. The proportional calculation restricted to space above 750 square feet applies only to the first two ADUs on a property.

An ADU of 750 square feet or less continues to be exempt from most local impact fees under the statute.

Planning Your ADU Build

Our ADU process runs from consultation and design, including a 3D rendering walkthrough, through plans, city plan check with its correction rounds, and construction, to a settle-in punch list.

ADU projects typically range from $85K to $440K+, depending on type and size.

This is a preliminary planning range for budgeting only. It is not an offer, and nothing here creates an agreement or reserves a price. Actual project cost is established only after a site visit and a signed written agreement.

You can book a free call to discuss plans and requirements for your lot. The complimentary project consultation is 45 minutes, over Zoom.

Sources

Governor Newsom signs housing legislation, cementing California’s record progress to reduce unsheltered homelessness and, ca.gov, September 29, 2026
Governor Newsom Signs Bill to Lower ADU Costs, cayimby.org, September 29, 2026

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