Encinitas homeowners building larger accessory dwelling units will pay lower impact fees starting Jan. 1, 2027. The change is part of a housing law package Gov. Gavin Newsom signed Sept. 29.
The package, first reported by the San Diego Union-Tribune, includes laws cutting ADU fees, streamlining townhouse approvals on vacant lots and requiring cities to give developers upfront infrastructure cost estimates. For Encinitas, where state housing mandates have driven political battles for years, the laws add new obligations.
ADU fee relief under SB 1117
The most direct change for Encinitas property owners involves ADUs. Under previous state law, builders paid no impact fees on ADUs of 750 square feet or smaller. Exceed that by even one square foot, and fees applied to the entire unit.
SB 1117, by Sen. Sabrina Cervantes, D-Riverside, fixes that cliff. Starting Jan. 1, the first 750 square feet stay fee-exempt. Builders pay only on square footage above that line.
That matters here. The Encinitas City Council approved an updated development impact fee schedule through Resolution No. 2026-34, which took effect July 20, according to SnapADU, a San Diego-area ADU builder. Under that framework, ADUs of 750 square feet or larger are charged at the single-family residential per-square-foot rate.
Across the greater San Diego region, ADU permit costs for larger units can approach $20,000 when sewer, school and plan-check fees are combined, SnapADU reported. Encinitas-specific fee data on the site shows costs ranging from $3 to $28 per square foot depending on unit size.
Saad Asad, communications manager for California YIMBY, told the Union-Tribune the law would likely save a builder "thousands of dollars" in fees.
Townhouse and cost-estimate laws
Two companion laws target for-sale housing on vacant lots. SB 1116 updates the Starter Home Revitalization Act to speed approvals. AB 1751 allows automatic approval for townhouse projects reserving 10 percent of units for low-income buyers, a pathway previously limited to rentals.
Bo Peterson, a San Diego-based land use attorney at Allen Matkins, told the Union-Tribune the laws stand out because they encourage for-sale housing. But hurdles remain: the automatic-approval pathway cannot be used in high fire hazard zones, which cover about 45 percent of the San Diego region, the Union-Tribune reported.
A fourth law, SB 1014, requires cities to provide non-binding "good faith" infrastructure cost estimates within 30 days of a project application. No penalty applies if the estimate is wrong. Peterson told the Union-Tribune the law will likely hit smaller communities harder, where he has seen governments impose extensive sewer or stormwater upgrades late in the process.
Encinitas already adjusting
The city has been adapting to state housing law on several fronts. The City Council voted 5-0 on Aug. 26 to adopt Ordinance No. 2026-10, implementing state laws AB 2011 and SB 6 with objective design standards for the Downtown Encinitas and North 101 Corridor specific plans. Council members Ehlers, Lyndes, O'Hara, San Antonio and Shaffer all voted yes.
At the same time, Encinitas endorsed the Our Neighborhood Voices ballot measure, which would amend the state constitution to give local governments more control over housing and land use. Mayor Bruce Ehlers told Voice of San Diego in December 2025 the goal is to qualify the measure for the 2028 election.
At an earlier council session, members asked city staff to clarify how ADUs and junior ADUs factor into traffic impact calculations. Staff was directed to return with revisions, according to the city's Council Rundown.
