ADUs 750 Sq Ft or Less Owe Zero Impact Fees. Cities Keep Charging.

You've priced out your backyard ADU, and the number that keeps moving is fees. Then you read your city's code and find the line that's supposed to save you: no impact fee on a small ADU. Except your city wrote it as "less than 750 square feet" — and your plans pencil out to exactly 750. On paper, one square foot just knocked you out of the small-ADU fee exemption.

Here's the thing: state law doesn't say "less than 750." It says 750 square feet or less — and HCD keeps catching cities that quietly billed the unit sitting right on the line.

What the statute actually says

Government Code section 66311.5(c)(1) is blunt about who can't charge you: "A local agency, special district, or water corporation shall not impose any impact fee upon the development of an accessory dwelling unit that has 750 square feet of interior livable space or less or a junior accessory dwelling unit that has 500 square feet of interior livable space or less."

Two things matter in that sentence. "Or less" puts the exactly-750 ADU (and the exactly-500 JADU) inside the exemption, not outside it. And the measure is interior livable space — not gross square footage, not the footprint, not the pad. Only above 750 do fees kick in, and even then the statute says any fee "shall be charged proportionately in relation to the square footage of the primary dwelling unit."

San Bernardino: one square foot, real money

When HCD reviewed San Bernardino's ADU Ordinance No. MC-1659, it flagged the fee section. The ordinance read: "No impact fee is required for a JADU or for an ADU that has less than 750 square feet of interior livable space." HCD's finding was direct:

The Ordinance allows for impact fees on an ADU with exactly 750 square feet of interior livable space, but State ADU Law does not authorize this limitation.

HCD ordered the city to fix it — to "exempt ADUs with 750 square feet of interior livable space, or less, from impact fees, as well as JADUs with 500 square feet of interior livable space or less."

Verified against HCD's ADU Ordinance Findings letter to the City of San Bernardino, dated April 22, 2026 (Finding 14, Section 19.04.030 (2)(P) 8.a.i.).

The same one-word gap, city after city

San Bernardino isn't a one-off. HCD has flagged the identical "less than 750" wording in ordinance after ordinance:

• Calabasas wrote that the city "shall not impose any development impact fees upon the development of an accessory dwelling unit less than 750 sq. ft." HCD found the ordinance "fails to exempt ADUs with exactly 750 interior livable space from impact fees." (Finding 18, May 4, 2026.)
• South Gate exempted "an Accessory Dwelling Unit less than 750 square feet" — same missing square foot. (Finding 11, March 16, 2026.)
• Coronado wrote that no impact fees may be imposed on a unit "that is less than 750 square feet in size." (Finding 22, December 10, 2025.)
• Calipatria exempted only an ADU "that is less than 750 square feet in size." (Finding 15, May 27, 2026.)

Different cities, one pattern HCD reads the same way: "less than 750" leaves the exactly-750 unit paying fees the statute exempts. Several of these ordinances also measured by raw size instead of interior livable space — another way the number at the counter comes out wrong.

What it means for your project

If your ADU lands at 750 square feet of interior livable space or less (or your JADU at 500 or less) and the fee estimate still includes impact fees, the local "less than 750" line may not be enforceable against your project. HCD's position is that the statute's "or less" controls, and that the fee is measured by interior livable space, not gross size.

Two cautions before you lean on it. These are HCD enforcement letters — HCD's interpretation, not court rulings — and a city can adopt findings and push back. And the math turns on how "interior livable space" gets measured against your specific plans. So confirm the number and the fee schedule with your building department or a land-use attorney before you sign anything — this isn't legal advice. But the exemption is written into statewide statute, and the "less than 750" line printed in your local code may not hold.

What CrossBeam does with it

When the letter lands on your desk, CrossBeam turns it around the same day: what each item is actually asking, the code or law behind it, and a written response you can hand to your team or your attorney — the back-and-forth that used to eat weeks, done in a couple of hours.