Two Detached ADUs in California: What Changes on January 1, 2027

AB 956 (Chapter 791, Statutes of 2026) and SB 1117 (Chapter 809, Statutes of 2026) were both signed September 29, 2026, and take effect January 1, 2027. Status checked October 23, 2026; we re-check it on January 1, 2027, and when the state housing department issues guidance on either bill or a later bill amends these sections. Solve Lending & Realty is a mortgage and real estate brokerage, not a law firm or a permitting agency; confirm your own project with your city’s planning and building department, or your county’s in an unincorporated area.

What AB 956 changes: from one detached ADU to two

An accessory dwelling unit (ADU) is a second, self-contained home on the same lot as a house, whether for a relative or a tenant. Ministerial approval means the city checks the permit against fixed, objective standards instead of deciding case by case. Under the law in place through 2026, a city must ministerially approve one detached, newly built ADU on such a lot. AB 956, as the Legislative Counsel’s Digest (the summary printed at the top of the bill) puts it, would “increase the number of detached, new construction, accessory dwelling units that a local agency is required to ministerially approve on lots with a proposed or existing single-family dwelling” to two.

From January 1, 2027, Government Code section 66323 reads, in paragraph (2): “Two detached, new construction, accessory dwelling units that do not exceed four-foot side and rear yard setbacks for a lot with a proposed or existing single-family dwelling.”

The section applies to a building permit “within a residential or mixed-use zone”. If your lot is zoned for something else, ask your planning department whether this path applies to it.

Two limits come with it. Both units must be new construction, so a converted garage or space inside the house is a different path under the law and is not one of the two; whether a conversion can be added to the two detached units depends on your city. And the lot needs a proposed or existing single-family home.

Size, height and setback rules for each detached ADU

The new paragraph lets the city attach conditions to each detached, newly built unit: “A total floor area limitation of not more than 800 square feet of livable space” and a height limit taken from the state’s ADU height rules. A detached unit larger than 800 square feet is not a right on this path; your city’s own ordinance may allow one.

Under those rules, as the state housing department (HCD) summarizes them, the height a city may apply to a detached ADU is generally “16 feet on a lot with a proposed or existing single-family or multifamily dwelling unit.” Near transit, it can be “18 feet on a lot with an existing or proposed single-family or multifamily dwelling, including an additional 2 feet to accommodate roof pitch that aligns with the primary dwelling, when the lot is a half-mile from a major transit stop or high-quality transit corridor.”

The setbacks are the four-foot side and rear setbacks in the statute itself. Beyond what the section authorizes, “A local agency shall not impose any objective development or design standard that is not authorized by this section” on a qualifying unit. Building code, fire code and utility requirements still apply, and “The installation of fire sprinklers shall not be required in an accessory dwelling unit or a junior accessory dwelling unit if sprinklers are not required for the primary residence.”

What happens to the junior ADU option

A junior ADU (JADU) is a smaller unit created within the walls of the existing house. AB 956 adds a limit for lots that use the new two-detached path. In the words of the Legislative Counsel’s Digest, the bill “would expressly state that a local agency is not required to ministerially approve an application for a building permit to create a junior accessory dwelling unit on the same lot where 2 detached, new construction, accessory dwelling units have been constructed.”

The text says the city is not required to approve one. It does not say the city cannot. If a junior ADU is part of your plan, ask your city before you design around two detached units.

HOAs and the “zoned to allow” wording change

California’s Civil Code already limits how far a homeowners association can restrict ADUs, while still allowing reasonable restrictions. AB 956 changes where that protection reaches. From January 1, 2027, the Civil Code sections it amends (sections 714.3 and 4751) apply to “a lot zoned to allow single-family residential use”; the earlier wording was “on a lot zoned for single-family residential use”.

If your HOA has said no to an ADU before, the wording change may be worth a fresh look with a real estate attorney who has read your HOA’s documents. Solve Lending & Realty is not a law firm and cannot tell you how it applies to your association.

SB 1117: how ADU impact fees change above 750 square feet

The change reaches only the larger units, and some things stay the same. A city, special district or water corporation still “shall not impose any impact fee upon the development of an accessory dwelling unit that has 750 square feet of interior livable space or less or a junior accessory dwelling unit that has 500 square feet of interior livable space or less.”

What changes is the larger unit. From January 1, 2027, Government Code section 66311.5(c)(1)(B) reads: “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.”

Two qualifiers travel with that sentence. It applies for “up to two accessory dwelling units on a lot”; on a lot with more than two ADUs, the fee is charged proportionately on the whole unit, with no 750-square-foot deduction. And the statute gives no formula, so each city decides how to do the arithmetic. Section 2 of SB 1117 says the amended fee section “applies to all cities, including charter cities.”

The timing question has no answer in the bill: the chaptered text we read has no transition rule for a permit that straddles January 1, 2027. Ask your city which fee rules will apply to your permit.

What fees do not change: utility connections and school fees

The fee change covers impact fees only. Under the amended section, an impact fee “does not include any connection fee or capacity charge charged by a local agency, special district, or water corporation.” For a new detached unit, a connection fee or capacity charge must be “proportionate to the burden of the proposed accessory dwelling unit, based upon either its square feet or the number of its drainage fixture unit (DFU) values”. School fees run under their own rule in the Education Code: under the same section, an ADU or junior ADU with less than 500 square feet of interior livable space does not add assessable space for school fees.

What you can build today, before the new law starts

Neither bill has an urgency clause, so until January 1, 2027, the one-detached rule and the current fee rule apply. Under the current rule, impact fees on an ADU over 750 square feet are charged proportionately on the whole unit. A project you are designing now may be permitted under one set of rules and finished under the other, which is one more reason to ask your city early.

Coastal, fire zone and local rules to check

Coastal zone. State ADU law applies in the coastal zone, but a coastal development permit may be needed, and HCD notes that the ADU rules “do not alter or lessen the effect or application of Coastal Act resource protection policies.”

Fire and hillside areas. We found no language in either bill on very high fire hazard severity zones. Check local fire and hillside rules before you plan a second detached unit.

Your city’s own ordinance. State law sets a floor; a city may be more permissive. Check with your city or county planning department; local ordinances and fee schedules may be updated for 2027.

Financing two ADUs

Whatever your city approves, there is more than one way to pay for the build. A HELOC (home equity line of credit) is a revolving line of credit secured by the equity in your home: you draw what you need, repay, and draw again. A fixed second mortgage (also called a home equity loan or closed-end second) is a fixed-rate, fixed-payment second mortgage that delivers a one-time lump sum at closing. A HELOC or a fixed second mortgage leaves your first mortgage in place; a cash-out refinance replaces it with a new, larger loan, so your whole balance takes on new terms. You may qualify for a HELOC, a fixed second mortgage, a cash-out refinance or a renovation loan, subject to lender guidelines. A HELOC, a fixed second mortgage and a cash-out refinance are each secured by your home and come with their own terms and costs, and waiting until the city confirms the fee rules is a fair choice too.

If you are counting on rent to qualify, ADU rental income may be considered for qualifying in some cases, subject to lender and investor guidelines; ask before you build.

Sources

• California Legislative Information (leginfo.legislature.ca.gov), AB 956, Chapter 791, Statutes of 2026, chaptered text (approved September 29, 2026) (accessed 2026-10-23)
• California Legislative Information (leginfo.legislature.ca.gov), SB 1117, Chapter 809, Statutes of 2026, chaptered text (approved September 29, 2026) (accessed 2026-10-23)
• California Department of Housing and Community Development, Accessory Dwelling Unit Handbook (March 2026) (accessed 2026-10-07)
• Allen Matkins (via Mondaq), Governor Newsom Signs Key Housing Bills Into Law (Oct. 4, 2026) (accessed 2026-10-07)