learnadu guidecalifornia rules, silicon valley lots
The Silicon Valley ADU guide
California law guarantees most single-family lots room for a backyard home and a junior unit. Here’s what the state allows in 2026, what changes next, and a calculator for what an ADU could cost and pay back.
What the state allowsPayback calculatorLocal programs
- a city must allow800 sq ftwith 4-ft side and rear setbacks
- permit decision60 daysafter a complete application
- impact fees$0for ADUs of 750 sq ft or less
- property taxadded value onlythe home’s Prop 13 base stays
state law
What California guarantees
From the state housing department’s ADU Handbook (March 2026 edition), which states the law as of January 1, 2026 (Government Code 66310 to 66342).
unitssingle-family lots
Up to three units on one lot
A converted ADU inside the house or an existing accessory building, a junior ADU, and a new detached ADU.
- A converted ADU can add up to 150 sq ft for an entrance
- A junior ADU (JADU) is up to 500 sq ft inside the house, one per lot
- AB 956, signed September 29, 2026, allows two detached ADUs on a single-family lot; confirm its start date with your city (likely January 1, 2027)
size and heightwhat a city can’t block
800 sq ft, 16 feet, 4-foot setbacks
Lot coverage, floor area ratio and front setbacks can’t stop an 800 sq ft ADU with 4-ft side and rear setbacks.
- Local size caps must allow at least 850 sq ft, or 1,000 sq ft with 2 or more bedrooms
- Without a compliant local ordinance: up to 1,200 sq ft detached, and up to half the house for attached
- Height: 16 ft detached; 18 ft near major transit, plus 2 ft to match the roof pitch; attached up to 25 ft or the zone’s limit if lower
parking, permits, feesfaster and cheaper
No parking near transit, a 60-day decision
The state has steadily cut the time and cost of permitting.
- No parking required within half a mile of public transit, bus stops included; otherwise at most one space per unit or bedroom
- The city confirms a complete application within 15 business days and decides within 60 days
- No impact fees for ADUs of 750 sq ft or less; school fees only above 500 sq ft
- SB 1117, signed September 29, 2026, limits impact fees on the first two ADUs to the square footage above 750
renting and sellingwhat you can do with it
Rent it long-term; sell it where allowed
Owner-occupancy rules for ADUs are gone for good.
- No owner-occupancy requirement for an ADU; a JADU needs one only if it shares a bathroom with the house
- JADUs and ADUs built under the state’s guaranteed standards must be rented for more than 30 days; cities can require the same of others
- Selling an ADU separately as a condo is a city option (AB 1033); San Jose and San Francisco allow it
- HOA rules can’t ban or unreasonably restrict an ADU on a single-family lot
payback calculator
What an ADU could pay back
Put in your bids, financing and a realistic rent to see monthly cash flow and the years to earn back your cash.
monthly and payback
money and rules
Property tax, permits and the fine print
- Only the ADU is reassessedWhen you build an ADU, the assessor adds the value of the new construction; your home’s existing Prop 13 base stays the same.
- A path for older unpermitted unitsA city can’t deny a permit to legalize an ADU built before January 1, 2020 over code violations, unless a fix is needed for health and safety.
- Sprinklers and solarAn ADU can’t require fire sprinklers unless the main house needs them; new detached ADUs must meet the state’s solar requirement, with some exceptions.
- State grant fundsCalHFA’s ADU grant (up to $40,000) has run out of funds.
- Renting it outA newly built ADU is exempt from the state rent cap for its first 15 years; check local tenant rules too.
An ADU can add living space and rental income, but how much value it adds depends on the home and the street. Ask us for sales of similar homes with and without one.
local programs
Local programs
Every city in our area follows state ADU law; several add preapproved plans and their own procedures.
- San JoseA preapproved ADU program since 2019 lets owners choose plans the city has already reviewed. San Jose allows ADUs to be sold separately as condos, and a 749 sq ft ADU condo there sold for $530,000 in July 2026, reported as the first such sale in California.
- Santa Clara County ADU resourcesA regional resource center for ADUs in Santa Clara County cities; the county approved 800 and 1,200 sq ft preapproved plan sets for unincorporated areas in 2024.
- San Mateo County Second Unit CenterResources for planning a second unit in San Mateo County.
- San FranciscoTwo permit paths (State and Local ADU programs), a 2025 ordinance allowing ADU condo sales, and no short-term rentals of ADUs.
- Palo Alto, Mountain View, Sunnyvale and other citiesEach has its own ADU page and procedures, and several offer preapproved plans. Check the current rules before you design.
the plan
From idea to first rent check
- step01
Check what your lot allows
Setbacks, easements, utilities and any fire or flood zone shape where an ADU can go.
- Pull the parcel map and the preliminary title report for easements
- Note where sewer, water and electrical service run
- Check your HOA rules: they can set limited design standards but can’t ban an ADU
property nerd tipEasements can rule out the obvious spot, so find them before you pay for a design. - step02
Price it out
Get bids that include design, permits, fees, utility connections and site work, not just the building.
- Compare a conversion, an attached ADU and a detached unit
- Ask each bidder what’s excluded
- Run the payback calculator with each bid
property nerd tipSite work and utility connections are the line items easiest to leave out of a bid. - step03
Choose a plan
A preapproved plan can save design time and review; a custom plan fits an unusual lot.
- Check your city’s preapproved plans first
- Keep it at or under 750 sq ft if you want to avoid impact fees
- Plan the bedroom count around the rent you’re targeting
- step04
Permit it
Once the application is complete, the city has 60 days to decide.
- The city confirms a complete application within 15 business days
- Respond quickly to comments to keep the clock moving
- step05
Build, inspect and get reassessed
After final inspection, the assessor adds the ADU’s value to your tax base.
- Expect a supplemental tax bill for the added value
- Update your homeowners insurance before anyone moves in
- step06
Rent it or live in it
Long-term rentals, family, a home office or a future sale where your city allows it.
- Leases for more than 30 days where required
- A newly built ADU is exempt from the state rent cap for 15 years
- Check your city’s tenant rules
sources
Where the rules come from
Checked October 15, 2026.
- California HCD: ADU Handbook (March 2026)State ADU and JADU law as of January 1, 2026.www.hcd.ca.gov/building-standards/adu/handbook
- Governor’s office: bills signed September 29, 2026AB 956 and SB 1117.www.gov.ca.gov/2026/09/29/governor-newsom-signs-housing-legislation-cementing-californias-record-progress-to-reduce-unsheltered-homelessness-and-build-more-homes/
- California BOE: new constructionOnly the added value is assessed.www.boe.ca.gov/proptaxes/newconstructionproperty.htm
- UC Berkeley Terner Center: ADU survey2021 statewide costs and rents.ternercenter.berkeley.edu/blog/cci-adu-survey
- Santa Clara County ADU resourcesRegional ADU resource center.aduscc.org/
- San Mateo County: adding an ADUCounty rules and resources.www.smcgov.org/planning/how-do-i-add-accessory-dwelling-unit-my-home
- San Francisco Planning: ADUsState and Local programs, condo sales, rental rules.sfplanning.org/accessory-dwelling-units
questions
Questions we hear
Can I build an ADU and a JADU?
Yes. State law lets most single-family lots have a converted ADU, a junior ADU of up to 500 sq ft inside the house, and a new detached ADU. AB 956, signed in September 2026, allows two detached ADUs on a single-family lot; check its start date with your city.
Do I have to live on the property?
Not for an ADU. A JADU requires owner occupancy only if it shares a bathroom with the main house.
Will an ADU raise my property taxes?
Only by the value the ADU adds. The assessor adds the new construction to your existing Prop 13 base instead of reassessing the whole property.
Can I rent my ADU short-term?
Usually not. JADUs and ADUs built under the state’s guaranteed standards must be rented for more than 30 days, cities can require the same of others, and San Francisco bars short-term rentals of ADUs.
How much does an ADU cost?
It depends on size, type and site work. The most recent statewide survey we found (UC Berkeley Terner Center, 2021) put the median at about $150,000, or $250 per square foot; get current bids for your lot.
more to learn
Keep going
- Investor toolkitCash flow, 1031 timing and rent rules.
- SB 9Lot splits and duplexes on single-family lots.
- Property tax calculatorWhat new construction does to your bill.
- Market PulsePrices and days on market by city.
- What’s my home worth?A value range from a Property Nerd.
General information, not legal, tax or construction advice. ADU rules change often and cities add their own; confirm with your city’s planning department. Checked October 15, 2026.
talk to a property nerd
Thinking about an ADU?
We’ll look at your lot, at sales of similar homes with and without one, and at whether it pencils out. Commissions are negotiable, and we offer bundled services, so ask us what’s included.
Thinking about an ADU? Send us a note.
