Sacramento's HCD Non-Compliance Letter, Decoded: 6 Findings Every California Homeowner Should Recognize

On January 20, 2026, the California Department of Housing and Community Development sent the City of Sacramento a three-page letter listing six findings of non-compliance against the city's 2024 ADU ordinance. That letter is more than a Sacramento story. It is a diagnostic template every California homeowner can use to spot the same problems in their own city's code. This guide walks through HCD's six findings, the statutes behind each one, and a six-point checklist you can run against your jurisdiction. For the broader regulatory landscape, see the California ADU Laws 2026 guide. For how SB 543 and SB 9 (2025) interact with these enforcement mechanisms, see our ADU permit enforcement guide.

Bottom Line

On January 20, 2026, HCD sent the City of Sacramento a Government Code §66326 findings letter identifying six specific violations of State ADU Law in Sacramento Municipal Code §17.228.105. [1]
The largest single error: Sacramento caps detached ADUs on multifamily lots at two, while §66323(a)(4)(A)(ii) requires permitting agencies to allow up to eight (capped at the existing unit count). [1][2]
The HCD letter does not automatically invalidate the ordinance. Under §66326, the city has 30 days to either (a) adopt a compliant amendment or (b) re-adopt the existing ordinance with written findings defending its position. If the city does neither, HCD may refer the matter to the Attorney General. [1][3]
Sacramento's 30-day deadline expired February 20, 2026. As of May 14, 2026, public records do not clearly confirm which path the city has taken.
The same six errors appear in dozens of other California city ordinances. HCD has applied this pattern to Dana Point, Glendale, Arcadia, and Cupertino. [4]

If you are building an ADU in California, the most valuable section of this article is the 6-point diagnostic checklist. You can apply it to your jurisdiction in about 15 minutes.

How HCD's Ordinance Review Works (And What It Does Not Do)

When a California city adopts or amends an ADU ordinance, it must submit the ordinance to HCD for review. HCD reviews it for consistency with State ADU Law (Government Code §§66310–66342) and issues findings under Government Code §66326. [3]

The findings letter is not an automatic invalidation order. The §66326 mechanism gives the city a 30-day window with two acceptable responses:

Path	What the City Does	Statutory Authority
A. Amend the ordinance	Bring the Municipal Code into compliance with HCD's findings	§66326(b)(2)(A)
B. Adopt as-is with findings	Re-adopt the existing ordinance and pass a resolution explaining why the city believes it complies despite HCD's findings	§66326(b)(2)(B)

If the city fails to follow either path, HCD is authorized to notify the city of its violation and may refer the matter to the California Attorney General under §66326(c)(1). [1] An AG referral does not automatically void the ordinance, but it sets up an enforcement lawsuit.

A separate mechanism, SB 9 (2025) (effective January 1, 2026), adds a different remedy. Cities that fail to submit an ADU ordinance to HCD within 60 days of adoption, or that fail to fix a non-compliant ordinance within 30 days under defined conditions, can lose their local rules and revert to the most permissive state defaults. [5] Sacramento did submit its ordinance, so the §66326 response process applies, not the SB 9 auto-void remedy.

The practical takeaway: HCD findings letters create legal leverage but not automatic relief. If you are a permit applicant in Sacramento (or any cited city), state law preempts conflicting local rules. You may need to cite the HCD letter in writing to make the city honor it.

The Six Findings, in Plain English

Finding 1: Five 2025–2026 Bills Not Incorporated

HCD listed five recently chaptered bills that the Sacramento ordinance fails to incorporate: [1]

Bill	Effective Date	What It Does
AB 130	June 30, 2025	2025 housing trailer-bill provisions affecting ADU permitting
AB 462	October 10, 2025	Coastal-zone permit timelines for ADUs
AB 1154	January 1, 2026	JADU owner-occupancy revisions; adds §66333.5
SB 9 (2025)	January 1, 2026	Auto-void remedy for non-compliant or unsubmitted ordinances (the 2025-session SB 9, distinct from 2021 SB 9 on lot splits)
SB 543	January 1, 2026	15-day completeness clock, 60-day approval clock, interior-livable-space redefinition

Sacramento's ordinance was adopted December 10, 2024, months before any of these bills became operative. A city is not required to re-adopt every time the Legislature acts, but it cannot continue to apply rules that have been superseded.

Finding 2: "The Two Options May Not Be Combined"

Sacramento Municipal Code §17.228.105 A separates ADUs into two categories — units subject to local development standards (Gov. Code §66314) and units entitled to ministerial approval under §66323 — and then says the two categories "may not be combined" on the same lot. [1]

This is the single most consequential finding in the letter. Here is why.

State ADU Law defines two parallel paths a homeowner can take:

§66314 path: An ADU that complies with local objective standards on size, height, setback, parking, design, and similar items, within the caps state law imposes on those local standards. This path can permit larger ADUs (typically up to 1,200 sf or larger) but the local agency may apply more rules.
§66323 path: A "ministerial" ADU that fits within four state-defined categories. These ADUs are approved by checklist, and only state standards apply. Local development standards do not apply at all. [2]

Government Code §66317 requires the permitting agency to approve or deny any application under §66314 that meets the standards. [6] Government Code §66323(b) requires the agency to ministerially approve any qualifying §66323 ADU. [2]

The two paths are not mutually exclusive. A homeowner can have both: one §66314 ADU plus the §66323 ADUs allowed by state law on the same lot. By stating that the two options "may not be combined," Sacramento truncated what state law allows. The HCD letter directs the city to permit the full allotment and combination of §66314 and §66323 units. [1]

Finding 3: "Street Side-Yard" — A Term That Does Not Exist in State Law

§17.228.105 B.2.c.iii applies a "street side-yard" setback to all ADUs. [1]

Government Code §66315 caps what local standards can do: the agency cannot impose any standard beyond those listed in §66314. [7] The setback categories state law recognizes are front, side, and rear. Not "street side-yard."

This finding looks technical, but it matters on corner lots, where Sacramento had been imposing a more restrictive setback by reframing one of the side yards as a "street side-yard." HCD requires the city to apply only the three statutory categories.

Finding 4: Front Setback Imposed on §66323 ADUs

§17.228.105 B.2.c.iii.1 applies a front-yard setback to any ADU within 60 feet of the front property line. [1]

The problem is not the front setback itself. It is that Sacramento applies the front setback to all ADUs, including §66323 ministerial ADUs. §66323 ADUs are categorically exempt from local development standards beyond what the section itself authorizes. [2] A front-yard setback rule that prevents an otherwise-conforming §66323 ADU from being placed on a lot is an unlawful additional standard under §66323(b).

The fix is small in wording but significant in practice. The ordinance must note that the front-setback rule does not apply to §66323 ADUs.

Finding 5: Owner-Occupancy for All ADUs, Not Just JADUs With Shared Sanitation

§17.228.105 B.2.c.3.b requires the property owner to reside on-site for any ADU, with limited carve-outs for government agencies, land trusts, and housing organizations. [1]

State law treats ADU and JADU owner-occupancy differently:

ADUs: owner-occupancy cannot be required at all (prior 2025 sunset was eliminated, making the no-owner-occupancy rule permanent).
JADUs: owner-occupancy can be required only when the JADU shares sanitation facilities with the primary dwelling, per Government Code §66333(b) as amended by AB 1154, effective January 1, 2026. If the JADU has separate sanitation facilities, owner-occupancy cannot be required. [8]

Sacramento's blanket rule applies owner-occupancy to all ADUs. That conflicts with the ADU rule outright and with the JADU rule by being too broad (it ignores whether sanitation is shared). The state-law fix removes the barrier for the overwhelming majority of ADU configurations and frees long-distance landlords and family trusts to invest. For the JADU-specific decision and the bathroom question that interacts with this rule, see our AB 1154 JADU owner-occupancy guide.

Finding 6: Multifamily Detached Cap of 2, When State Law Allows 8

§17.228.105 C.1.d limits detached ADUs on a multifamily lot to two. [1]

Government Code §66323(a)(4)(A)(ii) requires permitting agencies to allow up to eight detached ADUs on a lot with an existing multifamily dwelling, subject to the rule that the number cannot exceed the count of existing primary units. [2] This baseline was set by SB 1211 (2024) and folded into the §66323 framework. [9]

The math: a Sacramento multifamily owner with eight units, who under state law could add up to eight detached ADUs, was being told under the city ordinance that only two were allowed. That is a 75 percent reduction in unit count for the entire affected category.

If you own a small apartment building in Sacramento, this is the finding that most directly affects your build capacity. The HCD letter does the heavy lifting on legal authority. You can cite it in your permit application. For the broader SB 1211 strategy, see our multifamily ADU playbook for apartment owners.

The Master Key: §66323 vs. §66314

The six findings make far more sense once you internalize the two-path structure of California ADU Law.

Government Code §66314 sets out the maximum standards a local agency can impose on an ADU. Height, setback, size, parking, design, and similar items can be regulated, but only within the caps state law imposes. Anything within those caps the city is allowed to require. Anything beyond them is preempted.

Government Code §66323 creates four categories of "State-mandated" ADUs that must be approved ministerially. These ADUs are subject only to the standards in §66323 itself. Local development standards do not apply at all.

The four §66323 categories are: [10]

A converted ADU inside an existing single-family or accessory structure, with limited expansion allowed.
One detached ADU up to 800 sf, with statutory height limits (typically 16 to 25 feet depending on configuration) and 4-foot side and rear setbacks.
The "multifamily conversion" path: ADUs inside non-livable areas of an existing multifamily building, up to 25 percent of the existing unit count (or at least one unit).
Up to eight detached ADUs on a lot with an existing multifamily dwelling. This is the Finding 6 number.

When a city writes its ordinance, it has to keep these two paths separate. Most non-compliant ordinances make one or both of the following mistakes:

Mixing the standards: applying §66314 local development standards to §66323 ADUs. That is Sacramento's Finding 4 problem.
Truncating the count: capping the number of §66323 ADUs below what state law requires. That is Sacramento's Finding 6 problem.

Once you see the structure, you can spot these errors in any city's ordinance.

A 6-Point Diagnostic for Your City's ADU Ordinance

You can run this checklist on any California city's ADU ordinance in about 15 minutes. Find your city's ordinance via the HCD ADU Ordinance Review page or your city's municipal code online.

#	Question	Why It Matters
1	Does the ordinance reference AB 130, AB 462, AB 1154, SB 9 (2025), and SB 543?	Pre-October 2025 ordinances are almost certainly missing at least one [1]
2	Can a §66314 path ADU and a §66323 path ADU coexist on the same lot?	If the ordinance restricts to one format, it is non-compliant [1][6]
3	Does the ordinance use only "front," "side," and "rear" setback terminology?	Invented terms like "street side-yard" are unlawful expansions [1][7]
4	Does the ordinance exempt §66323 ADUs from local development standards (front setback, height, etc.)?	§66323(b) categorically preempts these for §66323 ADUs [2]
5	Does the ordinance require owner-occupancy only for JADUs with shared sanitation facilities?	Any broader owner-occupancy rule conflicts with §66333(b) [8]
6	Does the ordinance allow up to 8 detached ADUs on multifamily lots (capped at existing unit count)?	Lower caps conflict with §66323(a)(4)(A)(ii) [2][9]

A single "no" or "I cannot tell from the code" answer is reason to look more closely. If you suspect non-compliance, you can submit a request to HCD's Housing Accountability Unit for review at hcd.ca.gov/planning-and-community-development/accountability-and-enforcement. [4]

If you are already in the middle of a permit application that has been blocked or delayed by one of these rules, the HCD letter for your city (if one exists) is the single most powerful document you can put in front of your planning department.

Two Myths to Avoid

Two pieces of misinformation circulate widely in coverage of California ADU compliance. Both appear in LLM-generated summaries, social media posts, and occasionally in legal blog content. Both are wrong.

Myth 1: "AB 1061 changes the rules for ADUs in historic districts."

False. AB 1061 (Quirk-Silva, Chapter 505, Statutes of 2025) amends Government Code §65852.21 and §66411.7. Those are the SB 9 statutes governing two-unit projects and urban lot splits. AB 1061 does not amend any of the ADU statutes (§§66310–66342). The historic-district carve-out for ADUs sits in Government Code §66314(b)(1), which authorizes objective standards only for properties individually listed on the California Register of Historical Resources, not for properties merely located within a historic district. [11]

Myth 2: "An HCD non-compliance letter automatically voids the city's ordinance."

False. §66326 gives the city a 30-day window to amend or to defend. Only if neither response is filed does HCD have authority to escalate to the Attorney General. The mechanism that does automatically void a non-compliant ordinance is SB 9 (2025), and it applies only if a city has failed to submit its ordinance for HCD review in the first place. [5] If the city submitted its ordinance and HCD then found problems, the response process applies, not auto-void.

What This Means for Sacramento

Sacramento had until February 20, 2026 to respond to HCD. Public records as of May 14, 2026 do not clearly confirm which path the city has taken. The city has a separate active workstream, its Accessory Dwelling Unit Objective Design Standards project, but the HCD letter's findings are not principally about design standards. They are about the structural mismatch between the city's ordinance and the §66314 / §66323 framework.

The realistic enforcement track, based on HCD's pattern with other cities: [4]

Dana Point: findings letters December 2024 and August 2025.
Arcadia: findings letter November 2024.
Cupertino: findings letter April 2025.
Glendale: findings letter August 2025, resolved via MOU October 2025.

Most cities respond eventually. Few have been formally referred to the Attorney General. HCD's leverage in 2026 is more reputational and procedural than litigation-based, though SB 9 (2025) added new tools that have not yet been heavily exercised.

For Sacramento homeowners and small investors who are building right now: state law preempts the city ordinance on every one of the six findings. You can apply for a permit under the more permissive state-law standards and, if the city pushes back, cite the HCD letter directly.

Three Takeaways

The §66314 / §66323 distinction is the most important framework in California ADU Law that most homeowners have never been taught. It determines whether the city can apply its own rules to your project at all.
If your city's ADU ordinance was last amended before October 2025, it is almost certainly missing at least one of the five recently chaptered bills. Treat that as a compliance flag worth checking.
When the local ordinance conflicts with state ADU law, state law wins. You may still need the HCD letter, or your own statutory citations, to make the city honor what state law already requires.

References

California Department of Housing and Community Development. Review of Sacramento City's Accessory Dwelling Unit (ADU) Ordinance under State ADU Law (Gov. Code, §§ 66310 - 66342). January 20, 2026. https://www.hcd.ca.gov/sites/default/files/docs/policy-and-research/ordinance-review-letters/sacramento-adu-findings-012026.pdf
California Government Code §66323. https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=66323&lawCode=GOV
California Government Code §66326. https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=66326&lawCode=GOV
HCD Housing Accountability Unit — Accountability and Enforcement. https://www.hcd.ca.gov/planning-and-community-development/accountability-and-enforcement
SB 9 (2025) — Effective January 1, 2026. Bill text via leginfo.legislature.ca.gov.
California Government Code §66317. https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=66317&lawCode=GOV
California Government Code §66315. https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=66315&lawCode=GOV
California Government Code §66333. https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=66333&lawCode=GOV
SB 1211 (2024). https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240SB1211
HCD 2026 ADU Handbook (March 2026), §66323 Units FAQ. https://www.hcd.ca.gov/sites/default/files/docs/policy-and-research/adu-handbook-update.pdf
AB 1061 (Quirk-Silva, Chapter 505, Statutes of 2025). https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202520260AB1061
Sacramento Municipal Code §17.228.105 — Accessory Dwelling Units. https://codelibrary.amlegal.com/codes/sacramentoca/latest/sacramento_ca/0-0-0-36106