SB 1117: California's New ADU Impact Fee Rule for ADUs Over 750 Sq Ft (2027)

SB 1117 is a short California law with a direct effect on what a larger ADU costs. It changes how cities, counties and special districts may charge impact fees on an accessory dwelling unit over 750 square feet. Governor Newsom signed it on September 29, 2026 (Chapter 809, Statutes of 2026). This guide explains what the law says, from which date it applies, and what it does not change, using the text of the statute itself.

The short answer

• What it changes: for the first two ADUs on a lot, impact fees on an ADU over 750 sq ft may be charged only on the area above 750 sq ft, still in proportion to the size of the main house.
• When: the bill has no urgency clause and no operative date, so under the California Constitution it takes effect on January 1, 2027.
• Where: statewide, including charter cities. It amends Government Code section 66311.5.
• What stays the same: ADUs of 750 sq ft or less and junior ADUs of 500 sq ft or less still pay no impact fees. Utility connection fees and capacity charges are not impact fees and follow their own rules.

What an impact fee is

An impact fee is a one-time charge a local agency collects when new construction is approved, to pay for public facilities the new home will use: parks, roads and transit, flood control, fire stations. The statute defines it by reference to Government Code 66000(b) and adds park fees under section 66477 (the Quimby Act). It expressly excludes connection fees and capacity charges for water and sewer.

Impact fees are separate from the building permit and plan review fees, which pay for processing your permit, and from school developer fees, which school districts collect under the Education Code. SB 1117 does not touch either of those.

How fees on ADUs worked before SB 1117

Since January 1, 2026, Government Code 66311.5 has said two things about impact fees on ADUs:

1. No impact fee on an ADU with 750 sq ft of interior livable space or less, or on a junior ADU of 500 sq ft or less.
2. Above 750 sq ft, impact fees must be charged proportionately in relation to the square footage of the primary dwelling unit, on the whole ADU.

The second rule is where the cliff comes from. A 750 sq ft ADU pays nothing; a 760 sq ft ADU pays a proportional fee on all 760 sq ft. Ten extra square feet can cost thousands of dollars. In the City of Sacramento, the City's own 2026 fee estimate shows about $5,272 at 749 sq ft and about $10,624 at 750 sq ft. The form still places the jump at 750, a leftover of the older "less than 750" wording; under the current statute it belongs just above 750 (see our Sacramento ADU fees and permits guide for the full breakdown).

What SB 1117 changes

The new wording of section 66311.5(c)(1) splits the rule for larger ADUs in two. In the statute's words:

"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."

"For properties with more than 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."

In plain terms:

Situation	Until December 31, 2026	From January 1, 2027
ADU of 750 sq ft or less	No impact fees	No impact fees
Junior ADU of 500 sq ft or less	No impact fees	No impact fees
ADU over 750 sq ft, first or second ADU on the lot	Proportional fee on the whole ADU	Proportional fee on the area above 750 sq ft only
ADU over 750 sq ft, third or later ADU on the lot	Proportional fee on the whole ADU	Proportional fee on the whole ADU (unchanged)

The first 750 sq ft of a larger ADU becomes fee-free in the same way a 750 sq ft ADU already is. A 1,000 sq ft ADU is charged on 250 sq ft, a 1,200 sq ft ADU on 450 sq ft.

A worked example of the formula

The law sets the method, not the dollar amounts: each city, county or district still adopts its own fee schedule. Take a city that applies the proportional rule as the ADU's share of the main house's size, with an impact fee of $10,000 for a new single-family home, and a 1,500 sq ft main house:

ADU size	Area charged today	Fee today	Area charged from 2027	Fee from 2027
750 sq ft	none	$0	none	$0
800 sq ft	800 sq ft	$5,333	50 sq ft	$333
1,000 sq ft	1,000 sq ft	$6,667	250 sq ft	$1,667
1,200 sq ft	1,200 sq ft	$8,000	450 sq ft	$3,000

The $10,000 figure is an illustration, not any city's fee. Some jurisdictions express ADU fees per square foot instead; the area above 750 sq ft is what changes either way. For the City of Sacramento's real numbers, see SB 1117 in Sacramento: ADU impact fees before and after.

What SB 1117 does not change

• Utility connections. Water and sewer connection fees and capacity charges are not impact fees. An ADU inside existing space still cannot be required to get a new connection or pay a related charge; other ADUs can be charged, but only in proportion to their size or plumbing fixture count (66311.5(d) and (e), unchanged).
• School fees. School districts collect developer fees under Education Code 17620. The only ADU rule there is unchanged: an ADU or junior ADU under 500 sq ft is treated as adding no assessable space, so it owes no school fee. The 750 sq ft rule does not apply to school fees.
• Permit and plan review fees. These pay for processing the permit and are not impact fees.
• Size limits. SB 1117 changes fees only. What size ADU your lot allows is set by the ADU rules in Government Code 66314 and your local ordinance.
• Junior ADUs. The law repeats the exemption for junior ADUs of 500 sq ft or less and adds nothing else about them.

Does it apply in my city?

Yes, if you are in California. Section 2 of the bill states that housing is a matter of statewide concern and that the change "applies to all cities, including charter cities." It also binds counties and special districts, such as park and flood-control districts, that charge impact fees on new homes. Local fee schedules and forms may take time to catch up; the statute governs where a local form disagrees with it.

Timing your permit around January 1, 2027

The law does not say how it applies to applications already in process. Jurisdictions set the point at which fees are calculated and paid, often when the building permit is issued. If you are planning an ADU over 750 sq ft and your permit would issue near the end of 2026, ask your city or county which date it uses before you schedule. Our guide on what size ADU to build in 2026 and 2027 walks through the size decision with real numbers.

FAQ

When does SB 1117 take effect?

January 1, 2027. It was signed on September 29, 2026 and has no urgency clause or later operative date, so it follows the default date for California statutes.

Is a 750 sq ft ADU still exempt from impact fees?

Yes. ADUs of 750 sq ft of interior livable space or less pay no impact fees, both now and after SB 1117.

Does SB 1117 cover a third ADU on my lot?

No. The marginal rule applies to up to two ADUs on a lot. On a property with more than two ADUs, a larger ADU is charged on its whole size, in proportion to the main house.

Does SB 1117 reduce school fees?

No. School developer fees fall under the Education Code. ADUs under 500 sq ft still owe none; larger ADUs pay the district rate on their full size.

What is the bill number in the statute books?

SB 1117 (Cervantes) is Chapter 809, Statutes of 2026. It amends Government Code section 66311.5.

Sources: SB 1117 (2025-2026), chaptered text, Chapter 809, Statutes of 2026, from the California Legislature's official bill data, including the Legislative Counsel's Digest; California Government Code 66311.5 as amended by SB 1117; California Constitution Article IV, section 8(c); Education Code 17620; City of Sacramento ADU Fee Estimate CDD-0419 (rev. 07-12-2026). Checked October 2026. This article explains the statute and is not legal advice; confirm fees with your city or county before budgeting.