By Lily Campbell Team
Adding an accessory dwelling unit can change how a property works for a family, a tenant, or a future owner, but the rules decide what is possible. California has spent years rewriting its ADU laws, and the state’s March 2026 handbook says it reflects law in effect as of January 1, 2026.
At Lily Campbell Team, we help homeowners think through the real estate side of these projects, while architects, builders, and city staff handle plans and permits. Here is a plain-English look at five areas of state law to understand before you build.
Key Takeaways
- State handbook: California’s Housing and Community Development department publishes an ADU handbook, and its March 2026 edition reflects law effective January 1, 2026.
- Review clock: HCD says an agency must approve or deny a complete application within 60 days when a dwelling already exists on the lot.
- Owner occupancy: State law sets no owner-occupancy requirement for standard ADUs, though junior ADUs with shared sanitation are treated differently.
- Fees: HCD says impact fees are prohibited on ADUs with 750 square feet or less of interior livable space.
Start With the HCD Handbook and Government Code Chapter 13
California’s Department of Housing and Community Development publishes an ADU handbook, and the March 2026 edition says it reflects law in effect as of January 1, 2026. The underlying statutes sit in Government Code sections 66310 through 66342.
Where the Rules Come From
- State law: Government Code Chapter 13 sets the baseline standards that cities and counties must follow for ADUs.
- Local ordinances: Each city or county can adopt its own rules, as long as they stay within state limits.
- HCD handbook: The handbook summarizes recent legislation, including 2025 bills such as SB 543 and AB 1154.
Local rules vary, so confirm requirements with your city or county planning department. A written summary from planning staff saves time before you hire a designer.
Know the 60-Day Review Clock and the 2026 Permit Changes
HCD says a local agency must approve or deny a complete ADU application within 60 days when a single-family or multifamily dwelling already exists on the lot. SB 543, effective for 2026, adds a 15-business-day completeness review and a written appeal process.
Timeline Details to Know
- Completeness check: The agency must tell you within 15 business days whether your application is complete, according to HCD’s list of 2025 changes.
- Appeals: An appeal decision is due within 60 business days after the agency receives the written appeal.
- Schedule caveat: Local processes and plan-check cycles still vary, so ask your city for a realistic schedule.
Complete plans and clear documents help the clock start sooner. Keep copies of every submittal and notice.
Check Size, Setback, and Height Limits Before You Design
HCD’s handbook says local rules cannot prevent a homeowner from building at least an 800-square-foot ADU with four-foot side and rear yard setbacks. That figure is a floor that local standards cannot undercut, and cities may allow more.
Key Dimensions at a Glance
- Setbacks: State law caps required side and rear setbacks for new ADUs at four feet, with no setback for converted existing structures.
- Height: HCD lists a base height of 16 feet for detached ADUs, with 18 feet allowed near major transit and 25 feet for attached units.
- Detached size: State law sets a default maximum of 1,200 square feet for a detached ADU.
Site conditions and utility locations can change what fits on a lot. Ask your designer to confirm dimensions against your city’s current ordinance.
Understand Owner-Occupancy and Junior ADU Rules
HCD’s handbook states that California has no owner-occupancy requirement for ADUs, and it notes that a sunset date on that rule was removed. Junior ADUs, which are limited to 500 square feet and must sit inside a single-family home, follow different rules.
JADU and ADU Distinctions
- ADU occupancy: A standard ADU carries no state owner-occupancy requirement.
- JADU occupancy: HCD says owner-occupancy is required if a JADU shares sanitation facilities with the main home.
- Rental terms: HCD says JADUs cannot be short-term rentals and must be rented for longer than 30 days if they are rented.
Some cities set their own rental rules for ADUs, so check before planning short-term rentals. Talk with a tax or legal professional about how rental income would affect you.
Plan for Fees, Parking, and Separate-Sale Options
HCD’s handbook says impact fees are prohibited on an ADU with 750 square feet or less of interior livable space. A 2025 law, SB 543, also exempts ADUs and JADUs of 500 square feet or less from school fees, according to a law firm summary.
Cost and Layout Questions
- Impact fees: Larger ADUs may face fees charged in proportion to size, so ask your city for a written fee estimate.
- Transit exemption: HCD’s handbook summarizes an exemption from parking requirements within one-half mile walking distance of public transit.
- Separate sale: Cities may opt in to letting an ADU and the primary home be sold as condominiums under AB 1033, but not every city has done so.
Fee schedules and local ordinances change often. Get current numbers from your city before you finalize a budget.
FAQs
What are the main ADU rules California homeowners must follow?
State law sets a 60-day review clock, a four-foot setback cap, and an 800-square-foot floor that local rules cannot block. It also removes owner-occupancy requirements for standard ADUs and limits impact fees on smaller units. Your city or county still sets local standards, so confirm details before you design.
Can I rent my ADU as a short-term rental?
HCD says junior ADUs must be rented for longer than 30 days if they are rented at all. For standard ADUs, local rules can differ, so ask your city. Rental income may also have tax effects, so speak with a qualified advisor.
How many ADUs can I build on my lot?
HCD’s handbook describes up to eight detached ADUs on a lot with an existing multifamily dwelling, limited by the number of existing units. A 2025 law summary from Burke, Williams & Sorensen says cities must allow one attached ADU, one detached ADU, and one JADU on a single-family lot. Ask your city which combination it allows on your property.
Contact Us at Lily Campbell Team
If you are weighing an ADU as part of your next move or your long-term plan, contact Lily Campbell Team to talk through the real estate side.
