NEW 2026 ADU & Housing Laws! What can you build now?

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If you thought housing legislation was overwhelming last year, wait until you see what’s going into effect in 2026! They will dramatically impact what you can build on any given property.

Theme #1

Establish the California Department of Housing and Community Development to as the enforcement authority on ADU rules, clarify some rules and giving HCD a sledgehammer to stop anti-housing rules established by local municipalities!

• SB 9 (2025) -HCD enforcement. Gives HCD additionally enforcement over local ADU ordinances. If municipalities do not submit the ordinances to HCD within 60 days, or don’t respond to HCD comments within 30 days, then the municipality may NOT enforce their local ADU rules and must revert to State standards.

• AB 1208 – Mandatory 10-day inspection guidelines for municipalities. Introduces mandatory fines when HCD or the Attorney General has wanted the agency before. $50,000 fines on the municipality per violation. Repeat violations can lead to mandatory 5x the fine.

• AB 35 – establishes strict timelines and a private plan-check option for small residential projects. If the municipality estimates they cannot review the submitted plans within 30 days, you can hire a private professional provide who is certified as a residential plans examiner. The provider checks the plans and submits a report to the municipality. The municipality has 10 days to act or it is automatically deemed compliant and the permit deemed approved. You can also self-certify, but then you’re liable.

• AB 1154 – removes owner occupancy requirement for JADUs. For homeowners who already have a JADU and have a lien on title, you can work with the County Recorder to remove that from the title. The bill also sets a minimum 30-day rental term for JADUs – no AirBnBing of ADUs!

• SB 543- - ADU/JADU Parity. This bill clarifies and outlaws local anti-ADU rules and gives HCD more enforcement authority, especially over JADUs. Now local municipalities may not charge Impact Fees or School Fees for JADUs. Most important, the bills codifies HCD’s interpretation of State law that allows for 1 detached ADU, 1 interior conversion and 1 JADU at every single-family zoned property, regardless of occupancy. In short, now even rental homes may have up to 4 total units regardless of location.

• AB 1294 requires HCD to create a standard permit application that every city and county must accept. This will help builders standardize the process, decrease waiting periods and allow HCD to track violations.

• AB 920 – Mandates a centralized portal for submitting housing permits at the municipality.

• AB 609 – Exempts housing projects located in urban areas from environmental review

• AB 357 – Exempts student and faculty housing from Costal Commission review. This is hopefully the beginning of eroding the Coastal Commission’s opposition to housing.

• AB 1061 – Makes it easier to build housing in Historic districts.

• SB 315 Prohibits municipalities from overcharging on Park Fees

• AB 782 – Removes double-bonding requirements for developers of residential developments.

• AB 818 – Fast-tracks the rebuilding of housing after a disaster, with stricter timeframes and processes. This should help the rebuilding process after the Los Angeles Fires. (proud to have been a co-writer on this!)

Theme #2: Expand the amount of housing allowed on single-family zoned propertiesSB 79 vs. SB 1123/684You may have heard about SB 79 which was signed by the Governor TODAY and would allow up to 10 housing units on a property near a high-use transit area. It’s amazing in the opportunity, and I’m even more excited about SB 1123 and 684 which is still in process for next year. Why is SB 79 not as great as it was? To get the votes, the proponents added some language that may doom its usefulness.

• You cannot demolish an existing rental house that is rent controlled

• Requires Labor standards – and pay – for any construction above 85 feet.

  • Developer must pay “prevailing wage” for 100% Affordable Housing projects

  • Must use ‘skilled & trained” labor

  • Developer liability for wage violations

  • Joint labor-management committees have authority to bring lawsuits and enforce labor laws

  • Phase 1 environmental assessment required

Still, for the right property, this is an amazing opportunity!

FEDERAL Law: ROAD to Housing Act of 2025

On top of Today’s announcement of SB 79, the Senate just passed the ROAD Act which is… just okay. The key features which may help the Average Joe are:

• Sec. 202 – More HUD grants for building housing in Opportunity Zones

• Sec. 204 – Whole-Home Repairs Act This section establishes a 5-year pilot program at HUD to offer grants and forgivable loans to low and moderate-income homeowners and qualifying small landlords repair their properties. 

• Sec. 206 – Build Now Act This section creates a pilot program to incentivize housing development of all kinds in Community Development Block Grant (CDBG) participating jurisdictions, excluding states. So watch for new grant opportunities in your community next year.

Thank you to California YIMBY for their hard work and updates! It’s worth watching them.Feel free to book a call with me or my team if you want to strategy your upcoming project at https://calendly.com/ADUloans.