What impact fees are charged and what is waived for ADUs?

Fees are one of the most misunderstood parts of ADU budgeting, partly because California law waives some of them and partly because the fees that aren't waived — utility connection charges in particular — can be surprisingly large. It helps to separate the categories clearly.

Impact fees and the small-ADU waiver

Under California ADU law, ADUs below a defined size threshold are exempt from local impact fees — the development fees cities charge to fund parks, roads, and other infrastructure tied to new units. Larger ADUs above the threshold may be charged impact fees, and those fees are generally required to be proportional to the unit's size relative to the primary dwelling rather than charged at the full single-family rate. The exact threshold, exemption criteria, and proportionality rules vary by jurisdiction — verify current requirements with your building department.

The fees that are not waived

Utility connection fees — the big variable

Water and sewer connection (capacity) fees are explicitly outside the impact-fee waiver and are set by your water/sewer district, not the city. These can range from a few hundred dollars to well over $15,000 depending on the district and whether a new service or larger meter is required. This is the line item most likely to blow up an ADU budget, so confirm it with your district early — before you finalize your plumbing design and before you commit financially.

School and permit fees

• School fees — many districts charge a per-square-foot fee on new residential area above a threshold; amounts and thresholds vary widely and change over time. Verify with your specific district.
• Permit and plan-check fees — the city's own charge for reviewing and issuing the permit. These are separate from impact fees and are not waived; they commonly run anywhere from roughly $1,500 to $15,000 depending on the city and project scope.

A budgeting checklist

1. Ask your city for its current ADU impact-fee schedule and the size threshold for the waiver.
2. Ask your water and sewer districts for connection/capacity fees in writing.
3. Confirm whether school fees apply at your ADU's square footage.
4. Get the city's permit and plan-check fee estimate.
5. Add all four categories to your construction and design budget.

Many homeowners assume "ADU fees are waived" and are blindsided by a five-figure water connection charge. The waiver is real, but it is narrow — connection and permit fees usually are not covered.

Fee rules and thresholds change frequently and vary by jurisdiction — confirm everything with your local building department and utility districts before committing. For a clear picture of the design-side costs you can control, see our cost of ADU MEP plans page and our flat pricing.