ADVANIThe New Laws Are Signed. Here’s What Actually Changes.
Two detached ADUs per lot and no more 750 sq ft fee cliff, HOAs losing their veto over energy-code windows, the 10% emergency rent cap reaching long leases, and a 7.28% rate — four changes that matter for San Diego owners.
Sacramento wrapped its bill signing on September 30. Three of the new laws reach your backyard, your HOA and your lease, and most start January 1. Rates moved too. Here’s the short version.
01 · ADUs: Two backyard units, and no more fee cliff
Signed September 29. AB 956 allows up to two detached ADUs per lot, up from one, and stops HOAs from blocking ADUs that follow state law. SB 1117 ends the 750 sq ft fee cliff: impact fees now apply only to the footage above 750.
My read: That cliff is why so many backyard units are drawn at 749 sq ft. A family-sized ADU now pencils.
The move: On a deep lot, rerun the math on a second unit or a larger one. Check your city’s ordinance before you design.
02 · HOAs: Your HOA can’t veto new windows
SB 908, effective January 1, 2027, voids HOA rules that prohibit replacing windows with energy-code-compliant ones. Cities have to approve those replacements administratively, with no design hearing.
My read: Committees insisting on discontinued frames have stalled a lot of older condos and townhomes. Buyers notice drafty windows at inspection.
The move: Owners: January puts the leverage with you. Boards: update your architectural guidelines now.
03 · Landlords: The emergency rent cap now covers long leases
After a declared emergency, state law caps rent increases at 10%. Leases longer than a year were exempt. SB 1365 removes that exemption on January 1, 2027.
My read: San Diego sees wildfire and storm declarations often. Owners on 18- or 24-month leases assumed this rule didn’t apply to them.
The move: Write any planned step-ups into the lease and document capital repairs. Both are defenses for an increase above 10%.
04 · Market: 7.28%, and what it does to buying power
Freddie Mac’s 30-year average hit 7.28% on October 1, the highest since November 2023. A year ago it was 6.34%.
My read: On an $800K loan that’s about $500 more a month. The same payment now carries roughly $727K, about 9% less buying power.
The move: Sellers: price a buydown credit against a price cut, and ask your lender to run both. Buyers: shop on payment, not price.
Thinking about an ADU in 2027?
Send me your address. I’ll tell you what the new rules allow on your lot and whether a second unit is worth sketching.
San Diego real estate, explained. Once a month.
New housing laws, local rules and big developments, and what they mean for your home. Written by Prem Advani, broker and attorney. Unsubscribe anytime.