| Table of Content |
| 1. What is an ADU? |
2. Benefits of Building a Permitted ADU in California |
| 3. What Are Impact Fees and Development Charges? |
| 4. What’s Changing in California in 2025? |
| 5. How These Changes Help Homeowners |
| 6. FAQ |
California is once again leading the charge in housing reform—this time by revising impact fees and development charges for Accessory Dwelling Units (ADUs). These small, self-contained residential units have surged in popularity due to rising housing costs and changing family needs. But one of the biggest barriers for homeowners has been the cost of fees tied to new construction.
In 2025, new legislation and local policies are poised to ease these financial burdens, making it easier and more affordable for Californians to build permitted ADUs. Here's what you need to know.
🌟 Benefits of Building a Permitted ADU
Building a permitted ADU not only ensures compliance with local codes but also unlocks a range of benefits:
✅ Rental income potential
✅ Increased property value
✅ Affordable housing for family or tenants
✅ Sustainability and efficient land use
✅ Long-term flexibility for aging in place
💸 What Are Impact Fees and Development Charges?
Impact fees are one-time payments imposed by local governments to cover the cost of public infrastructure required by new development—such as schools, parks, sewers, and roads. Development charges (sometimes used interchangeably) are broader and include fees for plan checks, building permits, and utility hookups.
For years, these fees significantly increased the cost of building an ADU—sometimes exceeding $20,000 to $40,000, depending on the municipality.
🏛️ What’s Changing in California in 2025?
California has implemented a series of reforms in recent years to reduce the cost and red tape associated with ADU construction. In 2025, further changes are taking effect:
1. Elimination of Impact Fees for Small ADUs
Under state law (SB 13), cities cannot charge impact fees on ADUs under 750 square feet. This provision is being reinforced in 2025 with greater enforcement and penalties for non-compliant jurisdictions.
2. Scaled Fees Based on Size and Use
For ADUs over 750 square feet, new legislation mandates that fees must be proportional to the size of the ADU relative to the primary home. This eliminates blanket fees and promotes fairness.
3. Standardized Fee Structures Across Jurisdictions
The state is pushing for a uniform fee schedule, reducing inconsistencies between cities and counties. This makes it easier for homeowners to plan and budget.
4. Fee Waivers for Affordable and Workforce Housing
ADUs that are dedicated to low- or moderate-income tenants may now qualify for partial or full waivers of development charges, further encouraging their use in tackling the housing crisis.
📊 How These Changes Help Homeowners
These reforms aim to:
Reduce upfront construction costs
Encourage legal ADU construction
Promote affordable housing development
Minimize barriers for middle-income families
The changes also support California’s long-term housing goals by maximizing existing land and infrastructure.
