All three ADU bills were signed. What changes January 1

I've written about these three bills twice while they were pending, which is the kind of thing that makes you look foolish if they get vetoed. They didn't. The governor signed all three in the last days of September, and they take effect January 1, 2027.

Below is what each one does to a real project, and the part nobody wants to hear, which is that none of it helps you this fall.

AB 956: a second detached unit

The headline change is the count. State law has generally allowed one ADU plus a junior ADU carved out of the existing house. Two freestanding structures in the backyard wasn't on the menu.

Quirk-Silva's bill puts it there, with streamlined ministerial review of up to two detached newly-constructed ADUs on a lot that has an existing or proposed single-family dwelling. Ministerial matters as much as the number does: it means approval without CEQA review and without a discretionary hearing where a neighbor can talk your project to death.

It also bars homeowners associations from blocking an ADU that complies with state law, and it cleans up the zoning language some cities used to deny ADUs on single-family houses that happen to sit on multi-family-zoned parcels. That last one sounds like an edge case and isn't, in the older parts of San Jose and Santa Clara where the zoning map and the houses stopped agreeing decades ago.

SB 1117: fees only on the part above 750 feet

Cervantes' bill is drier and probably worth more money to you.

ADUs of 750 square feet or less were already exempt from impact fees. Anything larger could be charged proportionally against the primary dwelling. The signed version limits those fees to the portion of livable space above 750 square feet, for the first two ADUs on a lot.

Run it on a real project. A 1,000 square foot two-bedroom goes from a fee base of 1,000 square feet to 250. Same unit, same permit, roughly a quarter of the exposure. On a 1,200 square foot unit it's better still.

Note the "first two" language, which exists because of AB 956. The two bills were written to work together, and the fee treatment follows the unit count.

The signed bill also clarifies when ADUs are exempt from utility connection fees, which matters more than it sounds like it should given what the third bill is about.

SB 1196: a clock on the utility

This is the one I'd been waiting for since PG&E said it would defer new housing connections as part of a two billion dollar cut to its 2027 budget.

McNerney's bill directs the CPUC to set clear timelines for utility hookup requests on ADUs and other small energization projects, and to impose penalties on utilities that miss them. It also covers EV chargers and home backup batteries. Owners and builders have been reporting waits of up to a year for a service connection, with no rule saying how long a utility may take and no consequence for taking longer.

The two developments sit oddly together. PG&E told investors in September it would slow down new housing connections. The state told PG&E in September that connections now come with deadlines attached. I don't know how that resolves, and the honest answer is that it resolves at the CPUC over the next year rather than on January 1.

Because that's the catch: the bill directs the CPUC to establish the timelines. It doesn't itself state them. The law takes effect January 1; the actual deadlines arrive whenever the commission finishes a proceeding.

What this means for a project you're planning now

Nothing changes for a permit you pull this month. A fall application gets today's rules, today's fee schedule, and today's one-detached-unit limit. The earliest any of this helps you is a January filing.

So the move for the next ten weeks is design, not permits. Tell your architect you want a site plan that works with one detached unit and can take a second later. That costs very little at the drawing stage and saves a redesign. If you were planning a unit at 749 square feet purely to duck the fee cliff, stop: from January that unit can be the size it should be, and you'll be paying fees on the difference rather than the whole thing.

Pull your city's impact fee schedule now and find your actual number, because SB 1117 is worth exactly as much as your city charges. Some Bay Area cities already waive or defer ADU fees, in which case the bill is a non-event for you. Others will hand you a five-figure number on a 1,000 square foot unit.

If you're in an HOA, read the CC&Rs this month. From January a chunk of that language stops being enforceable against a compliant ADU, and it's better to know which clauses you're about to stop worrying about than to discover it during design review. The HOA litigation has been going the other way case by case, and a statute settles faster than a published opinion.

For owners who already have a unit

If you're renting an existing ADU, none of this touches your tenancy. More legal backyard units across Santa Clara and San Mateo counties eventually means more competition, but that's a 2028 question and I wouldn't reprice anything over it.

The group that should pay attention is anyone sitting on a large lot who assumed one unit was the ceiling. From January it isn't, and the second unit is usually cheaper per square foot than the first, because the utility work, the access, and the site knowledge are already paid for.

The honest version

Three bills passed with almost nobody objecting, which tells you the Legislature has stopped treating ADUs as controversial. That's genuinely good news for owners.

It also doesn't put a meter on anything. The binding constraint on Bay Area ADU delivery for several years now hasn't been the planning counter, it's been the utility, and the bill aimed at that constraint delegates the hard part to a commission proceeding that hasn't happened yet. I'd plan on the permitting improvements landing in January and the connection improvements landing considerably later, if at all.

Design for the new rules now. File in January. Get in the utility queue the day you're able to, because that queue is the one thing none of these bills shortened yet.

Thinking about a second unit, or want to know what your existing ADU should be renting for? Get a free ADU rental analysis and I'll go through the numbers for your property. Or call me at (408) 813-8001.

Sources

• Governor Newsom Signs Key Housing Bills Into Law — Mondaq
• 2026 Legislation tracker — California YIMBY
• AB 956: Double Detached ADUs — California YIMBY
• SB 1117: Reducing the Cost of ADUs — California YIMBY
• Newsom Signs McNerney's Bill to Streamline ADUs by Accelerating Utility Hookups — EIN Presswire
• 2026 Legislative Package — Senator Jerry McNerney
• Governor Newsom issues legislative update 9.30.2026 — Office of the Governor