Assembly Bill 365 mandates that political subdivisions with zoning ordinances must permit at least one accessory dwelling unit (ADU) on each parcel designated for single-family or multi-family residential use. The bill outlines specific prohibitions for these subdivisions, including the inability to charge fees beyond standard building permit fees for ADUs, impose unique dimensional or design requirements that do not apply to single-family homes, enforce additional parking requirements based on the presence of an ADU, or require separate utility connections for ADUs. Additionally, the bill allows for size limitations on ADUs, stating they cannot exceed 75% of the existing single-family dwelling's square footage on the same parcel.

Furthermore, the bill renders any covenants or restrictions that prevent or unreasonably limit the construction or use of ADUs void and unenforceable. Homeowners associations are also restricted from imposing such limitations, except when necessary for public health and safety. The legislation aims to enhance housing availability by reducing barriers to the development of accessory dwelling units, reflecting a legislative intent that private restrictions on ADUs are contrary to public policy.