California AB 956 Housing Bill: Allowing Two ADUs on Eligible Single-Family Residential Lots Creates New Opportunities for Homeowners
1. Background of AB 956
California has faced a persistent housing shortage, high home prices, and rising rents for many years. For many families, purchasing a home has become increasingly difficult. At the same time, housing needs have become more complex as young adults seek independent living arrangements, aging parents need housing and care, and adult children continue to live with their parents.
To address the housing shortage, California has continued to revise its housing laws to encourage property owners to make better use of existing residential land and increase the housing supply. Accessory Dwelling Units (ADUs) have become an important tool in this effort.
On February 20, 2025, California Assemblymember Sharon Quirk-Silva introduced AB 956. The bill seeks to expand opportunities for ADU construction on eligible properties, simplify the approval process, and limit unreasonable restrictions imposed by homeowners associations (HOAs) on lawful ADU development.
On September 29, 2026, AB 956 was signed into law by Governor Gavin Newsom, becoming part of California’s ongoing housing reform efforts.
2. What Is an ADU?
An Accessory Dwelling Unit, or ADU, is a secondary residential unit located on the same lot as an existing or proposed primary residence. It may have its own kitchen, bathroom, bedroom, and separate entrance.
Common types of ADUs include:
- Detached ADUs: Separate residential structures built outside the main house, often in the backyard or another suitable location.
- Attached ADUs: Residential units connected to the main house or created within an expanded portion of the existing residence.
- Garage Conversion ADUs: Existing garages converted into residential units that meet applicable requirements.
- Junior Accessory Dwelling Units (JADUs): Smaller living spaces, generally no more than 500 square feet, created within an existing or proposed single-family residence and subject to specific legal requirements.
ADUs can provide housing for parents, adult children, or other family members. They may also be rented out, when permitted by applicable law, to generate additional income for homeowners.
3. The Most Important Change Under AB 956: Two Detached ADUs on Eligible Lots
One of the most significant features of AB 956 is its expansion of opportunities to build detached ADUs on eligible single-family residential lots.
Under the revised California law, local agencies must approve up to two newly constructed detached ADUs through the applicable streamlined approval process on qualifying lots with an existing or proposed single-family dwelling.
These units must meet the applicable legal requirements, including relevant side-yard and rear-yard setback requirements. Local agencies may impose applicable size and height limitations under this approval pathway, and the law allows the permitted floor area to reach 800 square feet per unit.
This reform is significant because, under the previous framework, eligible lots generally could obtain approval for only one newly constructed detached ADU through this particular streamlined approval pathway. AB 956 increases that number to two, allowing certain residential properties to make more efficient use of their land.
However, the law also establishes limitations concerning combinations of two detached ADUs and a Junior Accessory Dwelling Unit. If a property already has two detached ADUs approved under the relevant provisions, a local agency may not be required to approve an additional JADU through the same streamlined approval pathway.
Therefore, homeowners should not assume that every residential lot can accommodate an unlimited number of additional units. The actual number of units permitted depends on the property’s characteristics, applicable building codes, and relevant legal requirements.
4. Restrictions on HOAs Under AB 956
In California, many residential communities are governed by homeowners associations, commonly known as HOAs. These associations typically establish rules governing exterior appearance, building alterations, land use, and other community matters.
In the past, even when state law permitted ADU construction, some homeowners encountered obstacles imposed by HOA rules.
AB 956 amends relevant provisions of California’s Civil Code and broadens the statutory protections for ADUs and JADUs from certain single-family residential zoning terminology to lots where single-family residential use is permitted. This change may expand the scope of properties covered by these protections.
Under the revised provisions, certain covenants, restrictions, or HOA governing documents that effectively prohibit or unreasonably restrict the construction or use of ADUs and JADUs on qualifying properties may be considered void and unenforceable.
However, this does not mean that HOAs can no longer regulate any residential improvements. Reasonable restrictions may still be permitted, provided they do not impose unreasonable costs, effectively prohibit construction, or deprive homeowners of their legal right to build an ADU.
Therefore, homeowners planning to build an ADU should still verify applicable building codes, property conditions, and community requirements. The passage of AB 956 does not automatically invalidate every HOA restriction.
5. What Practical Benefits Does AB 956 Offer Homeowners?
1. Additional Rental Income
For homeowners with sufficiently large backyards, building two detached ADUs may create additional rental opportunities if the properties meet the applicable requirements.
For example, a homeowner could build two small residential units in the backyard and rent them to separate tenants. After deducting construction loan payments, insurance, maintenance, taxes, and vacancy-related expenses, the rental income could provide a long-term source of additional income.
The actual financial return, however, depends on construction costs, local rental rates, market demand, and the feasibility of the project.
2. Housing for Family Members
AB 956 is not just about real estate investment. It may also help families arrange their living spaces more effectively.
For example, parents could live in one ADU while an adult child occupies the other, with the homeowner continuing to live in the main house. Family members could maintain a degree of independence while remaining close enough to support one another.
For families who want aging parents to live nearby while preserving everyone’s privacy, this arrangement may be worth considering.
3. More Efficient Use of Existing Residential Land
Traditional single-family properties generally contain one primary residence. If a lot is large enough, appropriately configured, and compliant with applicable laws and building requirements, adding ADUs can increase the amount of housing accommodated on the property.
In some circumstances, retaining the existing house and adding ADUs may offer a more flexible development option than demolishing the original house and redeveloping the entire property.
4. More Options for Retirement Planning
For homeowners who already own property and are preparing for retirement, ADUs may become part of a broader retirement strategy.
Homeowners can rent out the units to supplement retirement income or allow parents, children, or other relatives to live nearby, potentially reducing housing costs for the family.
Before proceeding, however, homeowners should carefully evaluate the expected return, ongoing maintenance expenses, and future housing needs.
6. AB 956 Does Not Mean Every Property Can Begin Construction Immediately
Although AB 956 expands ADU development opportunities, homeowners should keep several considerations in mind.
First, lot size and layout. The available backyard space, distances between buildings, access points, and fire access requirements can all affect whether a project is feasible.
Second, building and safety codes. New ADUs must still comply with applicable building codes, fire safety requirements, structural safety standards, and other relevant regulations.
Third, local government approval. Streamlined approval does not mean that permits are unnecessary. Homeowners must still apply for the required building permits and satisfy applicable legal requirements.
Fourth, construction costs and investment returns. Building two ADUs requires a greater initial investment and may involve additional expenses for utilities, sewer connections, foundations, construction, and maintenance. Homeowners should estimate costs and analyze the financial feasibility of the project before construction begins.
Fifth, rental regulations. Under the relevant approval provisions as amended by AB 956, rental terms for ADUs approved through this pathway must exceed 30 days. Homeowners should not assume that these units can automatically be used for short-term vacation rentals.
7. Conclusion: Moving Toward More Flexible Use of Residential Property
AB 956 represents an important step in California’s continuing efforts to reform housing policy. By expanding opportunities to build detached ADUs on eligible single-family residential lots and further limiting unreasonable barriers to lawful ADU construction, the legislation gives homeowners more options for using their existing residential land.
For ordinary homeowners, the significance of this law extends beyond increasing the number of housing units. It allows residential property to serve multiple purposes: meeting family housing needs, generating rental income, and supporting retirement planning.
However, legal permission to build does not mean that every property is suitable for ADU development. Homeowners considering a project should evaluate their property’s characteristics, local approval requirements, construction costs, and long-term financial objectives, preferably with professional assistance.
More broadly, ADU policy reflects an important approach to urban development: increasing housing supply by making better use of existing residential land, without relying entirely on large-scale demolition and redevelopment. This approach can create more housing options for people of different ages, income levels, and family structures.
References:
- California AB 956 bill text and legislative history: AB 956 Bill Information
- California YIMBY’s overview of AB 956: AB 956 Bill Overview
- California Governor’s Office housing legislation announcement: Housing Legislation Announcement, September 29, 2026