California SB 1117: The 750 sq ft ADU Fee Cliff Ends in 2027

If you've been holding your ADU plans to 749 square feet, this one is for you. On September 29, 2026, Governor Newsom signed SB 1117. Starting January 1, 2027, the 750 square foot impact fee cliff goes away for the first two ADUs on a lot.

Here's what changes, what doesn't, and how to decide whether to pull permits now or wait.

Key Takeaways

• SB 1117 was signed September 29, 2026 and takes effect January 1, 2027.
• For the first and second ADU on a lot, impact fees can only be charged on the livable space above 750 sq ft.
• Under current law, an ADU over 750 sq ft can be charged fees on its full size.
• The bill does not remove school fees, utility connection charges, or plan check and permit fees.
• Fees are set by each city, county and district, so your actual number depends on where you build.

What Is the 750 Square Foot Fee Cliff?

California already says an ADU of 750 sq ft or less can't be charged a local impact fee. That part is not changing. The problem is what happens when you go one foot over.

Today, once an ADU crosses 750 sq ft, a city or agency can charge impact fees in proportion to the size of your main house. So a 760 sq ft unit can cost far more in fees than a 740 sq ft unit. That is the cliff. It's why so many plans land at 749 sq ft even when the lot could handle more.

What SB 1117 Changes

SB 1117 changes how that fee is figured for the first and second ADU on a property. The fee can only be based on the interior livable space above 750 sq ft.

Here's the math. A 1,000 sq ft ADU would be charged on 250 sq ft, not on all 1,000. A 900 sq ft unit would be charged on 150 sq ft. We're not quoting a dollar figure, because every jurisdiction sets its own rate per square foot. Ask your city or district for its current fee schedule.

What It Does Not Change

Don't read this as "ADU fees are gone." Reporting on the bill says these still apply:

• School district fees
• Utility connection and capacity charges (the bill clarifies when ADUs are exempt, so check the details with your utility)
• Plan check and building permit fees
• Design, engineering, Title 24 and construction costs

Fees are one line in an ADU budget. For most LA projects, construction is the big number. The fee change helps most on mid-size units, roughly 800 to 1,200 sq ft.

How It Pairs With AB 956

SB 1117 was signed the same day as AB 956, which allows two detached ADUs on a qualifying single-family lot. Together they make a two-unit plan easier to price. We covered that law here: California AB 956: Two Detached ADUs on One Lot Starting 2027.

A caution from the field. AB 956 lets a city cap each of those detached units at 800 sq ft. So the sweet spot for a two-ADU plan may be a bit above 750 sq ft each. Size it against your lot, setbacks and utilities before you commit to a layout.

Should You Pull Permits Now or Wait?

The new fee math is not law until January 1, 2027. Until then, current rules apply. Here's how we think about it:

1. Your plan is 750 sq ft or less. No fee change for you. Don't wait.
2. Your plan is well over 750 sq ft. Ask your city what it would charge under both rules. A January submittal may save real money.
3. You're ready to build and the unit is just over 750. Compare the fee savings against the cost of waiting. Material prices and a rental income delay count too.

Design and engineering take months anyway. Most owners can use the next few months to finish plans and have them ready on day one. Also expect permit counters to need some time to update their fee sheets after the law starts.

What We'd Do Before January

1. Confirm your lot can fit the unit. Check setbacks, easements, sewer, electrical service and fire access.
2. Decide the real size you need. Don't design to 749 just to dodge a fee that may be going away.
3. Ask your city and utility for the current fee schedule in writing.
4. Get plans, engineering and Title 24 done so you can submit when the law starts.

We handle design, permits and construction in-house. Start with our ADU and garage conversion services, see how long permits take in our ADU plans guide, or call 1-866-419-8840.

FAQ

When does SB 1117 take effect?

January 1, 2027. Governor Newsom signed it on September 29, 2026.

Does SB 1117 make ADUs free of impact fees?

No. ADUs of 750 sq ft or less already can't be charged local impact fees. SB 1117 changes how fees are figured on bigger units, so only the space above 750 sq ft is charged, for the first two ADUs on a lot.

How much will I save?

It depends on your city or agency's rate. The saving is the fee on the first 750 sq ft. Ask for the current fee schedule and run both calculations.

Does SB 1117 remove school fees or utility connection fees?

No. School fees, utility connection charges and permit fees can still apply. The bill clarifies when ADUs are exempt from certain utility connection fees, so confirm with your utility.

Should I wait until 2027 to submit my ADU plans?

If your unit is over 750 sq ft, compare the fees under both rules first. If it's 750 sq ft or less, waiting doesn't change your fees.

This article is general information, not legal advice. Fees and rules depend on your city and property.

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