California ADU Impact Fees: The 750-Square-Foot Rule

If you have ever compared two ADU budgets that looked nearly identical on paper and wondered why one carried thousands of dollars in extra city fees, the answer is usually a single number: 750 square feet. That threshold sits in California's ADU statute, it quietly shapes a lot of floor plans across San Diego County, and there is a bill moving through the Legislature this month that would make it matter even more.

Here is what the rule actually says, what it does not cover, and how to use it when you are sizing your unit.

What an "impact fee" actually is

Impact fees are the charges a city or county collects to offset the demand new development places on public infrastructure and services — parks, roads, drainage, libraries, fire facilities. They are separate from the cost of reviewing your project.

That distinction matters more than most homeowners expect. Under Government Code section 66311.5, "impact fee" is tied to the definition in the Mitigation Fee Act, plus park dedication fees. It explicitly does not include connection fees or capacity charges billed by a local agency, special district, or water corporation.

So when someone tells you a small ADU is "fee exempt," read that narrowly. On a real fee estimate you may still see:

• Plan check and building permit fees — these cover the jurisdiction's cost to review and inspect your project
• Water and sewer connection fees or capacity charges — governed by their own rules, not the impact fee exemption
• School fees — a separate statutory scheme with its own square-footage thresholds
• Utility upgrades — panel work, meters, laterals, and anything the serving utility requires

The exemption is real and it is worth money. It is just not the whole invoice.

The 750-square-foot line in current law

State law today draws a bright line based on interior livable space:

• A local agency may not impose impact fees on an ADU of 750 square feet or less.
• The same protection applies to a junior ADU of 500 square feet or less.
• For an ADU larger than 750 square feet, impact fees must be charged proportionately in relation to the square footage of the primary dwelling unit.

That proportionality requirement is the part people misread. It does not mean a 900-square-foot ADU is fee-free. It means the jurisdiction has to scale the fee against the main house rather than charging the ADU as if it were a brand-new standalone home. On a modest primary residence that ratio can still add up quickly — and today it is calculated on the full size of the ADU, not just the portion above the threshold.

Two homes on the same block can therefore land in very different places: a 749-square-foot detached unit pays nothing in impact fees, while an 800-square-foot unit next door gets a proportional bill based on all 800 feet.

What SB 1117 would change

That last quirk is exactly what Senate Bill 1117, authored by Senator Cervantes, is aimed at.

The bill amends section 66311.5 so that impact fees on an ADU over 750 square feet are charged only on the area in excess of 750 square feet of interior livable space. Under that language, an 1,000-square-foot ADU would be assessed on 250 square feet rather than on the whole unit — a meaningful difference on a two-bedroom design. The bill also sets out separate treatment for properties carrying more than two ADUs.

Where it stands: SB 1117 passed the Senate unanimously in May 2026, cleared Assembly Appropriations on a 13–0 vote on August 5, 2026, and is awaiting a vote on the Assembly floor. The Legislature's session wraps at the end of this month, so it will either move shortly or wait.

A word of caution we give every client: do not budget around a bill that has not been signed. Plan to today's rules, and treat a favorable change as upside. If SB 1117 is enacted, it takes effect on the standard January 1 timeline — which is a genuine consideration if your project is already tracking toward a winter permit.

How this shapes a real San Diego County budget

Fee schedules vary by jurisdiction, so the honest answer to "what will my impact fees be?" is always it depends on your address. But the planning logic is consistent:

Get the fee estimate before you finalize the floor plan

Most jurisdictions will give you a written fee estimate once they know the unit size, address, and utility approach. Pulling that early — during feasibility, not after drawings are done — is the cheapest hour you will ever spend. It is a standing step in our process for exactly this reason.

Know your interior livable square footage precisely

The threshold is measured on interior livable space, not the footprint drawn on your site plan. Wall thickness, a covered porch, and mechanical closets all get treated differently. A design that reads "about 750" on a napkin sketch can measure 764 on a plan set, and that difference is not rounded in your favor.

Weigh the cost of the next 100 square feet honestly

If a second bedroom pushes you from 740 to 860 square feet, the real cost is not just the added construction — it is the added construction plus whatever the proportional fee turns out to be. Sometimes the extra room is clearly worth it, especially if you are building for family or for long-term rental income. Sometimes a smarter layout gets you the same function under the line. That trade-off deserves an actual number, not a guess.

Check whether a pre-approved plan fits your lot

Many jurisdictions now maintain pre-approved ADU plan sets that have already cleared structural review, and a good number of them are drawn at or under the threshold precisely because of this rule. Starting from pre-approved plans can shorten review and keep you on the favorable side of the fee line at the same time.

Verifying what your jurisdiction is charging

If a fee estimate comes back and the impact fee line looks wrong for a sub-750-square-foot unit, ask for the specific authority behind the charge. Cities are generally responsive when the question is asked precisely, and "which code section authorizes this fee on a 700-square-foot ADU?" is a precise question.

The state also maintains oversight here. California HCD's accessory dwelling unit resource page hosts the current ADU Handbook and an ADU portal for submitting technical assistance requests and potential violations for review. That is a legitimate path, not a nuclear option — most of the time it is used to get clarity, not to pick a fight.

As a construction management agency, this is a good share of what we do day to day: read the fee schedule with you, sanity-check the numbers against state law, and make sure the design decisions you are making are informed ones. We are not the ones swinging hammers — we are the ones making sure you are not paying for square footage you did not need.

Where to start

If you are early enough that your floor plan is still flexible, you are in the best possible position to use this rule. Pull your jurisdiction's fee estimate, measure your interior livable space carefully, and decide the 750-square-foot question deliberately instead of discovering it at plan check.

If you would like a second set of eyes on that math, book a free site walk. We will look at your lot, talk through what sizes actually work given your setbacks and utilities, and give you a straight read on where the fees land — before you have spent money on drawings. You can also browse what we've built to see how these size decisions play out in practice, or look at financing options if the numbers are the piece holding you back.

The rules are more homeowner-friendly than they were a few years ago. It just takes a little planning to actually collect the benefit.