Published: 12 Oct 2026 · Last verified: 9 Oct 2026 · Next review: Jan 2027 Cost figures are re-checked against permit records quarterly. Changes are logged in Corrections.
The most expensive sentence in California ADU law is about to be rewritten.
Today, the rule works like this: build at 749 square feet, pay $0 in impact fees; build at 750, and many cities charge the full per-square-foot fee on the entire unit — including the 749 feet that would have been free. On September 29, 2026, Governor Newsom signed SB 1117 (Chapter 809, Statutes of 2026). Effective January 1, 2027, impact fees on a homeowner’s first two ADUs may be imposed only on the square footage above 750 — marginal, the way income tax brackets work, instead of all-or-nothing.
An 800 sq ft ADU would owe fees on 50 sq ft, not 800. Here is what that means in dollars, city by city.
The savings table
Our estimates below apply each city’s published impact-fee rates to 50 sq ft instead of 800, using the proportionality rules in current fee schedules. These are our arithmetic, not city-published figures — every city must publish its own marginal implementation, and the January 2027 quarterly review will check them.
| City | Impact fees at 800 sq ft (2026 rules) | Est. at 800 sq ft (2027 marginal rules) | Est. savings |
|---|---|---|---|
| Palo Alto | ~$8,000–$20,000 | ~$500–$1,250 | ~$7,500–$18,750 |
| Anaheim | ~$10,411 | ~$650 | ~$9,750 |
| Fullerton | ~$6,411 | ~$400 | ~$6,000 |
| Sacramento | ~$5,728 | ~$360 | ~$5,370 |
| Glendale | up to $4,700 | ~$295 | ~$4,400 |
| Torrance | $2,243.47 flat | TBD* | TBD* |
| Riverside | ~$1,484 (park, pro-rata) | ~$95 | ~$1,390 |
| Salinas | $0 | $0 | $0 |
| Oakland | $0 | $0 | $0 |
*Torrance’s flat $2,243.47 has no published per-square-foot rate, so there is no marginal arithmetic to do yet — the city must invent the math. We will check the January 2027 fee schedule.
The pattern is stark: the taller the cliff, the bigger the rescue. Palo Alto homeowners save the most because Palo Alto charged the most. Salinas and Oakland homeowners save nothing because their cities never charged the fee at all — a quiet vindication of the waiver approach.
What the bill actually says
SB 1117 amends exactly one section — Gov. Code §66311.5, the ADU fee statute:
- Scope: the first two ADUs on a lot. A third ADU is assessed on the entire unit under the old proportionality rule.
- Basis: only livable square footage above 750 may be charged. The 750 itself stays exempt.
- Utility fees: the bill also clarifies when ADUs are exempt from utility connection fees — related to, but separate from, the impact-fee change.
- Not touched: school district developer fees (Ed. Code §17620 — districts, not cities, levy these). Building permit fees, plan check fees, and taxes are not impact fees under the statute and are unaffected.
No urgency clause, so the January 1, 2027 effective date holds (Cal. Const. art. IV, §8(c)(1)).
The December-vs-January question
Here is the uncomfortable part: permits pulled in 2026 use the old math. Nothing in SB 1117 is retroactive.
If your plans show 800 sq ft and your building permit issues in December 2026, you pay the full cliff — up to ~$20,000 in Palo Alto. If it issues in January 2027, you may pay ~$500–$1,250. That makes permit timing the most expensive scheduling decision in ADU construction right now, worth anywhere from $0 (Salinas) to ~$19,000 (Palo Alto).
But delay is not free. Three costs cut the other way:
- Construction inflation — every month of delay reprices labor and materials.
- Financing carry — land and design costs accrue interest while you wait.
- Fee-schedule risk — cities will republish schedules for 2027; nothing guarantees every other line stays flat.
Model both paths with your city’s actual numbers before deciding. A $1,390 saving in Riverside may not survive two months of delay; a ~$18,000 saving in Palo Alto very plausibly does.
What we are watching
- City implementation schedules — each city must translate “marginal” into its own fee schedule. Torrance’s flat fee is the interesting case: it cannot survive unchanged.
- Our calculator — the /compare/ fee calculator currently computes impact fees on the full unit above 750, matching 2026 practice. The marginal logic ships with the January 2027 quarterly re-verification.
- The 12/1 re-verification — our next quarterly fee check will confirm which cities have published 2027 schedules, and this post will be updated.
Disclaimer
Legislative summary, not legal advice. Dollar figures above are our estimates from published 2026 fee schedules, not city-published 2027 figures. Implementation will vary by jurisdiction. Always verify current fees with your city before budgeting.