5 New California Housing Laws Coming in 2027 That Homeowners Should Know About
California has passed another round of housing legislation, and several changes could affect what homeowners and developers are allowed to build beginning in 2027.
From expanding opportunities for accessory dwelling units (ADUs) to reducing certain construction fees and making it easier to build townhomes, the state is continuing its effort to address California’s housing shortage.
Here are five new laws worth paying attention to.
1. AB 956: More Opportunities to Build ADUs
Accessory dwelling units, often called granny flats or backyard homes, have become increasingly popular among California homeowners looking to create additional living space, accommodate family members or generate rental income.
Assembly Bill 956 expands certain ADU development opportunities, including provisions allowing two qualifying detached ADUs on some properties with existing or proposed single-family homes.
The law also updates provisions governing ADUs on multifamily properties.
For homeowners with larger lots, this could create additional possibilities, although eligibility will still depend on applicable building and safety requirements.
2. SB 1117: Changes to ADU Construction Fees
One of the biggest obstacles to building an ADU is cost.
In addition to construction expenses, homeowners may encounter permit fees, utility connections and development impact fees.
Senate Bill 1117 changes how certain impact fees are calculated for ADUs larger than 750 square feet.
Under the new approach, qualifying impact fees are based on the portion of the ADU’s interior livable area exceeding 750 square feet.
This could reduce certain development costs for homeowners considering larger ADUs.
It does not eliminate all permitting or construction fees.
3. SB 1116: Easier Development on Qualifying Subdivided Lots
Senate Bill 1116 modifies rules affecting certain housing developments on subdivided properties.
The changes address development standards such as setbacks, building height and parcel dimensions that can sometimes make smaller housing projects difficult to complete.
The goal is to reduce unnecessary barriers to housing construction on eligible lots.
For property owners and developers, this could create additional opportunities to develop housing on smaller parcels, subject to the law’s eligibility requirements.
4. AB 1751: A New Pathway for Townhome Development
Not every buyer wants or can afford a traditional detached single-family home.
Townhomes can provide another ownership option, particularly in communities where land costs make detached housing increasingly expensive.
Assembly Bill 1751 establishes a streamlined approval pathway for qualifying townhome developments.
By simplifying certain approval requirements, the law aims to make it easier to create additional for-sale housing.
For California communities struggling with affordability, increasing the variety of homes available could be an important part of the solution.
5. AB 2074: More Housing Near Major Transit Hubs
Assembly Bill 2074 focuses on increasing housing opportunities near major transit infrastructure.
The law requires certain large California cities to designate regional transit hub districts where qualifying higher-density housing developments can be accommodated.
These districts are intended to support additional residential construction in areas with access to public transportation, subject to applicable development, affordability and labor requirements.
For Southern California, the legislation is another example of the state’s continued effort to concentrate housing growth in established urban areas.
What Do These Laws Mean for California Homeowners?
The biggest takeaway is that California continues to expand opportunities for housing construction, particularly on existing residential properties and in areas suitable for additional development.
But there’s an important distinction between a law creating new development opportunities and a particular property actually qualifying.
Not every homeowner will be able to build two ADUs. Not every lot can be subdivided. And not every development will qualify for streamlined approval.
Property dimensions, zoning, fire safety, utilities, building codes and other restrictions still matter.
That’s why homeowners should evaluate their specific properties before assuming a new law applies to them.
Could Your Property Have Additional Development Potential?
For homeowners throughout Los Angeles, Orange County, Riverside and San Diego, these changes are worth understanding.
Whether you’ve considered building a backyard home, accommodating extended family, creating rental income or exploring the development potential of an existing property, the rules are continuing to evolve.
If you’re curious what might be possible with your property, contact our team. We can help you review the property and identify questions to take to your local planning department or a qualified development professional.
Sometimes the most valuable thing about a property isn’t just what’s already built. It’s what may be possible next.
Sources: California Legislature, AB 956, SB 1117, SB 1116, AB 1751 and AB 2074. Governor of California, September 29, 2026 housing legislation announcement.
