California ADU Laws in 2026: What Homeowners Need to Know

California’s ADU Laws: Where Things Stand in 2026

California has been dismantling barriers to ADU construction since 2017. Each legislative session brings new bills that expand homeowner rights, reduce fees, and limit the ability of local governments to block projects. The result is one of the most ADU-friendly legal frameworks in the country.

If you are a homeowner considering an ADU in 2026, you benefit from nearly a decade of accumulated legislation. This guide covers the laws currently in effect, what changed most recently, and how to navigate the rules to get your project approved.

The Foundation: AB 68, SB 13, and AB 881

Three landmark bills passed between 2019 and 2020 form the backbone of California’s ADU framework. Every homeowner should understand what these laws guarantee.

AB 68: Your Right to Build

Assembly Bill 68 established that homeowners can build both an ADU and a Junior ADU (JADU) on any residential lot. It created a ministerial (non-discretionary) approval process, which means the city cannot hold a public hearing or exercise subjective judgment on your application. If your plans meet the objective standards, the city must approve them.

AB 68 also eliminated replacement parking requirements for garage conversions. If you convert your garage into a living unit, the city cannot force you to build new parking elsewhere on your lot.

SB 13: Fee Reductions and Faster Permits

Senate Bill 13 capped the permitting timeline at 60 days for a complete application. It reduced or eliminated fees for ADUs under 750 square feet and prohibited HOAs from unreasonably restricting ADU construction.

AB 881: Setback and Design Protections

Assembly Bill 881 limited the setback, lot coverage, and floor-area-ratio restrictions that local agencies could impose. For conversions within an existing structure’s footprint, side and rear setbacks cannot exceed four feet.

Together, these three laws guarantee your right to build an ADU on most residential lots in California. The more recent legislation builds on this foundation.

What Changed in 2025 and 2026

Governor Newsom signed four new ADU-related bills in 2025. One took effect immediately; the other three took effect on January 1, 2026.

SB 543: Streamlined Permits and Fee Exemptions

SB 543 is the most impactful of the 2026 updates. It introduces several changes that reduce cost and uncertainty for homeowners:

• 15-day completeness review. Local agencies must now review your ADU or JADU application for completeness and provide a written list of any missing items within 15 business days of submission. Previously, some jurisdictions would sit on incomplete applications for weeks without responding.
• School impact fee exemption. ADUs and JADUs with 500 or fewer square feet of interior livable space are now exempt from school impact fees. This can save several thousand dollars depending on your school district’s fee schedule.
• Development impact fee exemption. ADUs with 750 or fewer square feet of interior livable space remain exempt from development impact fees. SB 543 codifies “interior livable space” as the measurement standard, resolving ambiguity about whether garages, porches, or storage areas counted toward the threshold.
• Local ordinance accountability. If a local agency fails to submit its ADU ordinance to the California Department of Housing and Community Development (HCD) within 60 days of adoption, the ordinance is null and void. This prevents cities from enforcing stricter local rules that HCD has never reviewed.

AB 1154 and SB 9: Expanded Rights

AB 1154 and SB 9 include several clarifying and strengthening provisions:

• Local ordinances cannot “unreasonably restrict” the ability to create ADUs and JADUs. The updated legislative intent language gives homeowners stronger grounds for challenging overly restrictive local rules.
• Local agencies must allow both one attached and one detached ADU, plus one JADU, on a single-family lot.
• JADU occupancy requirements are eased: local agencies cannot impose owner-occupancy requirements on JADUs that have independent sanitation facilities (their own bathroom).

AB 462: Coastal Zone Protections

AB 462 was signed as an urgency measure in October 2025 and took effect immediately. It addresses a longstanding gap in ADU law for properties in the Coastal Zone:

• Local agencies with a Certified Local Coastal Program must approve or deny a completed Coastal Development Permit for an ADU within 60 days, matching the statewide standard.
• In declared disaster areas (such as wildfire zones), detached ADUs can receive a certificate of occupancy before the primary dwelling if the main home was damaged or destroyed and the ADU has passed all required inspections.

AB 976: Owner-Occupancy Is Gone for Good

One of the most important recent changes is AB 976, signed in October 2023 and effective since January 1, 2024. This bill permanently removed the owner-occupancy requirement for standard ADUs.

Previously, AB 881 had temporarily suspended owner-occupancy rules through 2025. AB 976 eliminated the sunset provision, making the change permanent. This means:

• You do not need to live on your property to rent out an ADU.
• You can rent out both your primary home and your ADU simultaneously.
• You gain full flexibility as a landlord and investor.

The one exception is JADUs that share sanitation facilities with the main home. Those units still require the property owner to reside in either the main house or the JADU. However, SB 543 and AB 1154 now clarify that JADUs with independent sanitation facilities (their own bathroom) are not subject to owner-occupancy requirements either.

California law also authorizes local agencies to require that ADUs be used for long-term rentals of 30 days or more. This prevents short-term vacation rental use (like Airbnb) in most jurisdictions.

AB 1033: Selling Your ADU as a Condo

AB 1033, effective since January 1, 2024, introduced a game-changing concept: ADU condominium conversion. Under this law, homeowners can convert an ADU into a separate condominium unit and sell it independently from the primary home.

How It Works

AB 1033 is an opt-in framework. The state law enables the process, but each city or county must adopt its own local ordinance to allow it. Here is what the conversion process involves:

• HOA formation. The property must establish a homeowners association to manage shared elements like driveways, exterior maintenance, and common areas.
• Utility notification. Homeowners must notify local utilities (water, sewer, gas, electric) about the creation of a separately owned unit.
• Compliance with condo standards. The ADU must meet applicable building and safety standards for condominium use.

Cities That Have Opted In

San Jose was the first major California city to adopt AB 1033, with its ordinance taking effect in July 2024. San Diego followed in August 2025. More cities are expected to adopt ordinances in 2026 as the concept gains traction.

For Bay Area homeowners, this is significant. If your city opts in, you could build an ADU, hold it as a rental for several years, and then sell it separately as affordable entry-level housing. The ADU functions as both an income-generating asset and a future saleable property.

Size Limits, Setbacks, and Parking: The Rules at a Glance

Here is a quick-reference summary of the core dimensional and design rules under current California law:

Size Limits

Unit Type	Maximum Size	Notes
Detached ADU	1,200 sqft	Some cities allow up to 1,200 sqft regardless of primary home size
Attached ADU	1,200 sqft or 50% of primary home	Whichever is less; at least 800 sqft is always allowed
JADU	500 sqft	Must be within the primary home’s footprint or an attached garage

Setbacks

• Side and rear: Four feet maximum for detached ADUs.
• Front: If the ADU is under 800 square feet, the front setback cannot prevent the ADU from being built.
• Conversions: ADUs built within an existing structure (such as a garage) maintain the existing setbacks, even if they are less than four feet.

Parking

• No replacement parking is required when converting a garage, carport, covered parking structure, or uncovered parking space into an ADU (SB 1211, effective January 2025).
• Parking is also exempt if the ADU is within half a mile of public transit, within a historic district, or part of an existing structure conversion.

Impact Fees

Unit Size	Development Impact Fees	School Impact Fees
750 sqft or less	Exempt	Exempt (if 500 sqft or less)
751-1,200 sqft	Proportional to primary dwelling fees	Standard school district rates

What This Means for Bay Area Homeowners

The Bay Area is one of the most active ADU markets in California. Cities like San Jose, Sunnyvale, and Mountain View process hundreds of ADU applications each year. The 2026 legislative updates make these projects even more accessible:

• Faster permit processing. The new 15-business-day completeness review deadline (SB 543) prevents applications from sitting in limbo. Combined with the existing 60-day approval deadline, you can expect a permit decision within three months of submitting a complete application.
• Lower fees for smaller units. If you are building a studio or one-bedroom ADU under 750 square feet, you avoid development impact fees entirely. Units under 500 square feet are also exempt from school fees.
• No owner-occupancy hassle. Whether you live on the property or not, you can rent your ADU. This is especially valuable for Bay Area homeowners who may relocate for work but want to retain their property as an investment.
• Future condo conversion potential. If your city adopts AB 1033, your ADU becomes a separately saleable asset. In a market where entry-level homes are scarce and expensive, this could make your ADU highly desirable to first-time buyers.

How to Stay Compliant

California’s ADU laws set the floor, not the ceiling. Your city can be more permissive than state law but cannot be more restrictive. Here are practical steps to ensure your project stays on track:

1. Check your local ADU ordinance. Visit your city’s planning department website or call them directly. Ask whether they have adopted updated rules consistent with SB 543, AB 1154, and SB 9.
2. Get a pre-application consultation. Many Bay Area cities offer free or low-cost pre-application meetings. Use this to confirm setbacks, utility connection requirements, and any design review standards.
3. Work with an experienced builder. ADU regulations are layered: state law, local ordinances, building code, and Title 24 energy requirements all intersect. A builder who specializes in ADUs knows where the friction points are and how to avoid permit delays.
4. Document everything. Keep copies of all submissions, city correspondence, and inspection reports. If your city imposes requirements that conflict with state law, you have the right to challenge them.

Plan Your ADU Project with Custom Home

California’s ADU laws have never been more homeowner-friendly. The 2026 updates reduce fees, speed up permits, and open new possibilities like condo conversion. Whether you are building a detached unit for rental income, converting a garage for a family member, or planning a JADU as a home office, the legal framework supports your goals.

Custom Home Design and Build specializes in ADU projects across the Bay Area. From initial feasibility and design through permitting and construction, we handle every phase so you can focus on the outcome, not the paperwork.

Ready to explore what you can build on your property? Contact us for a free consultation and let us walk you through the options available at your address.