News · September 29, 2026 · From January 1, 2027, California cities must approve two new detached ADUs on a single-family lot instead of one. [1][2]
SB 1117 trims impact fees on bigger ADUs [3].
The catch: on many Peninsula lots the yard runs out first, and Menlo Park Fire's longer hose allowance, written for driveways serving one or two homes, may not stretch to a house and two cottages [7].
What changes for ADUs on January 1, 2027?
Two detached ADUs. Each may sit 4 feet from the side and rear lines, though the city can cap each at 800 square feet and apply state height limits [1][4]. Once two detached ADUs are built, the city no longer has to approve a junior ADU on that lot, though it may [1].
Smaller fees on bigger units. ADUs of 750 square feet or less pay no impact fees [5][4]. From 2027, for up to two ADUs on a lot, a bigger one pays impact fees only on the area above 750, still scaled to the house's size [3]. A 1,000-square-foot ADU is charged on 250 square feet, not 1,000. SB 1117 doesn't cut sewer or water connection charges, and school districts can still charge on ADUs of 500 square feet or more [3][4].
Will two ADUs fit on your lot?
On many Peninsula lots, the yard runs out before the law does. Picture an example lot, 50 by 150 feet, where the house must keep a 20-foot rear yard, as in Palo Alto and Menlo Park [6]. If the house was built right to its line, the cottage's 4-foot setback leaves a strip 16 feet deep [1]. Many houses sit farther forward. Three things decide if a second fits:
The fire hose has to reach. Every first-floor outside wall must be within 150 feet of the fire department's access road, usually the street, measured along the path around the building [7][8]. On a deep lot, a second cottage behind the first can have walls past that line. Menlo Park Fire can allow 200 feet, measured from the street to the home, for a sprinklered home under 3,600 square feet, but only for driveways serving one or two homes. A house and two cottages make three [7].
Walls near the line change. A wall under 5 feet from a lot line (3 with sprinklers) must be fire-rated [9]. Without sprinklers, a cottage on the 4-foot line can have windows on only a quarter of that wall.
What runs under the yard. Sewage drains by gravity, usually at a slope of at least a quarter inch per foot, and a cottage that sits too low needs a pump [10]. Any oak from 10 inches across is protected in San Mateo, and native oaks in Menlo Park [11][12]. For more power, the state's target for PG&E's steps on a new electric service line is 182 days on average [13].
What rent and property tax come with a second ADU?
As of October 2026, HUD's benchmark studio rent, utilities included, is $2,574 a month in the San Francisco area, which includes San Mateo County, and $2,621 around San Jose, after local agencies asked HUD to recheck [14][15][16][17]. Both counties tax a finished ADU on its own value, without reappraising the house [18][19]. Will it pay for itself? See our ADU payback guide.
Before you pay for drawings
Before anyone draws, check the yard, the trees, the hose path, the sewer and the power. Ask the city, in writing, whether it will apply the new law on January 1 even if its rules lag, and ask the fire agency where it measures from.
Amiari Construction builds ADUs and additions on the Peninsula.
How we checked this: In October 2026, Amiari Construction read both laws' official text and checked HCD guidance, the fire, building and plumbing codes, two cities' tree rules, PG&E's state timelines, HUD rents and state tax rules.
