A smaller impact-fee calculation—not a fee-free project
SB 1117 changes how covered impact fees are calculated for ADUs larger than 750 square feet on lots with up to two ADUs. Instead of using the full ADU area for the proportional calculation, the amended rule uses only the area above 750 square feet.
Signed September 29, 2026 as Chapter 809, the bill takes effect January 1, 2027. Read the chaptered SB 1117 text, particularly Government Code Section 66311.5(c).
This can matter when comparing floor plans, but the word impact is essential. It does not describe every charge on a city fee worksheet.
The threshold and the two-ADU distinction
| Situation | Treatment in the amended law |
| --- | --- |
| ADU with 750 square feet of interior livable space or less | No covered impact fee |
| ADU larger than 750 square feet, on a lot with up to two ADUs | Proportional impact fees based only on the area exceeding 750 square feet |
| More than two ADUs on the lot | The law retains a separate proportional rule without that same excess-area limitation |
The 750-square-foot exemption is not newly created by SB 1117. The change is the calculation for qualifying larger ADUs. Do not describe the law as eliminating impact fees on every ADU, or apply the two-ADU formula to a larger collection of units without checking the statute.
A simple floor-area example
For an 800-square-foot ADU covered by the up-to-two-ADU rule, the excess area is 50 square feet. For a 1,000-square-foot ADU under a qualifying approval pathway, it is 250 square feet.
Those are areas—not dollar estimates. The actual fee calculation also depends on the primary dwelling's square footage, the applicable fee schedule and which charges legally qualify as impact fees. A 1,000-square-foot example does not mean AB 956 guarantees two units of that size.
Charges that need separate review
Section 66311.5 expressly excludes connection fees and capacity charges from its impact-fee definition. Plan review, building permits, school fees and utility-related charges should not simply be grouped together and assumed waived.
Ask for an itemized fee worksheet. For each charge, identify the agency, the legal basis, the area used and whether it is an impact fee or a different type of charge. School fees have separate statutory treatment; do not apply the 750-square-foot rule to them automatically.
Why unit count and sequencing matter
A homeowner considering two new detached units plus another conversion unit should not calculate each fee in isolation. The bill distinguishes properties with more than two ADUs. Before relying on the reduced basis, ask the city how it treats the full project and the existing units on the lot.
The goal is not to design a home only around a threshold. Accessibility, usable rooms, privacy and long-term needs matter too. Compare the fee treatment after defining a functional layout.
Bring these questions to your project review
- Which proposed spaces count as interior livable space?
- How many ADUs will the lot contain after the project?
- What primary-dwelling area will the agency use?
- Which fees are affected, and which remain?
- Which rules apply to an application or fee payment spanning the effective date?
Request an ADU planning consultation. Bring your plans and any city fee worksheet so we can discuss the project's scope without promising a universal fee reduction.
Frequently Asked Questions
Does SB 1117 eliminate permit fees?
No. Its principal change concerns specified impact fees, not every cost of reviewing or permitting a project.
Is an ADU exactly 750 square feet covered by the exemption?
The chaptered text says 750 square feet of interior livable space or less. Confirm the agency's area calculation for your plans.
Does the excess-area calculation apply to more than two ADUs?
The amended law has a separate provision for properties with more than two ADUs. Do not assume the same reduction applies.
Read the What's Coming in 2027 series
- Part 1: AB 956 and two detached ADUs
- Part 2: SB 1117 and ADU impact fees
- Part 3: AB 1621 and housing permit reviews
- Part 4: AB 2601 and concurrent lot-split processing
Research checked October 21, 2026 against the chaptered California bills. This series explains signed legislation for 2027 planning, not permission to start work today. General educational information, not legal advice. Confirm the applicable law, permit pathway and property conditions with the reviewing agency and qualified professionals before committing to a project.