City Committee Unanimously Approves Major ADU Fee Reductions, Proposal Now Awaits Council Final Decision

The Pasadena Economic Development and Technology Committee unanimously approved significant fee reductions for accessory dwelling units (ADUs) during its meeting on Wednesday.

The proposal, which must still receive final authorization from the full City Council before taking effect, aims to encourage ADU production and increase housing options in Pasadena while preserving the character of residential neighborhoods.

It could save Pasadena homeowners thousands of dollars in construction costs for units under 900 square feet.

“This is very exciting news for those families that are just thinking about having … passive income,” said Committee Chair Tyron Hampton. “They’re able to do something with their property and reduce some of the fees because spending $20,000 on permit fees before you even break ground is a lot of money.”

The approved fee reductions span three major categories: plan check fees, permit fees, and residential impact fees. According to the staff presentation, these reductions could result in significant savings for homeowners building ADUs.

During the Planning Department presentation, specific reductions were identified:

Plan Check Fees:

• 50% reduction for ADUs using the city’s standard plans, which include pre-approved designs ranging from studio to small two-bedroom units of about 700 square feet
• 50% reduction for ADUs covenanted as affordable, for Section 8 tenants, or utilized by family members with a seven-year covenant through the housing department

Permit Fees:

• Waiver of construction tax, general plan maintenance fee, and technology fee for ADUs using standard plans or meeting affordability criteria
• 25% reduction to construction tax, general plan fee, and technology fee for ADUs 900 square feet or less
• Reduction of the Construction and Demolition (C&D) performance deposit to a flat rate of $1,000 for all ADUs regardless of size, which the Committee specifically requested in a previous meeting

Residential Impact Fees:

• Expansion of the exemption threshold to 900 square feet (increased from the state-mandated 750 square feet)
• Complete waiver of residential impact fees for covenanted affordable ADUs, Section 8 ADUs, and family member ADUs, regardless of size

Planning and Community Development Department Director Jennifer Paige noted that since 2021, there have been a total of 559 ADUs either under construction or completed in Pasadena. The average size for an ADU in Pasadena is 600 square feet, and the vast majority of ADUs (90%) are under 900 square feet.

The fee reductions would come as part of Pasadena’s strategy to address housing needs while preserving neighborhood character. The city has implemented several programs to encourage ADU production, including revised regulations, complementary ADU virtual consultations, and a standard ADU plans program.

Paige added that 96% of ADUs that have taken advantage of existing reductions are for family members, with very few covenanted as affordable housing.

Committee Members acknowledged that the fee reductions would have financial implications for the city. The residential impact fees collected annually for ADUs would be reduced by approximately 50%, from $105,000 to $52,000 per year, directly impacting funds available for parks and recreation in the city.

The reduction in plan check and permit fees would also result in a loss of revenue in the city’s building fund, with the city subsidizing staff costs related to reviewing, processing, inspecting, and maintaining records for ADUs.