Fullerton’s City Council has approved a compromise that will limit the number of Fullerton’s 325 allowable short-term rentals (STRs) to 100 rentals that can be rented out without an owner on site.

Screen shot of available Airbnb short term rentals in Fullerton.

The compromise was placed on the agenda at the request of 1st District Council member Fred Jung, who supported an earlier amendment to the ordinance governing STRs that passed in April but changed his mind about it during the amendment’s required second reading on May 4.  That amendment kept the total number of STRs to 325 throughout the city, but banned outright so-called “whole-house” rentals, the practice of renting out entire residences without an owner present. It passed in April on a split 3 to 2 vote, but failed by the same margin when Jung changed his mind on May 4. He also declined to join Mayor Bruce Whitaker and Mayor Pro Tem Nick Dunlap, in voting to reject the amendment altogether. Instead, Jung asked that a compromise be brought before the Council for its May 18 meeting.

The compromise settles the controversial question of whether homes in Fullerton can be rented short term, often to tourists visiting Southern California, where pleasant weather promises a minimum of vacancies and lucrative profits for owners. A whole-house STR ban would have effectively prevented investors from purchasing multiple properties for use as rentals, although many who spoke in favor of the compromise amendment during the May 18 meeting presented themselves as owners of single properties, sometimes inherited from family. They argued that their homes were neatly kept and well managed, and that ordinances preventing them from renting them out were infringements on their property rights.

They were opposed by residents who countered that STRs remove scarce housing from the rental and sales market and rob their streets of community by substituting strangers who rent STRs for neighbors. Many speakers against the compromise were members of UNITE HERE Local 11, the hotel and restaurant union whose threat to sue the City over the original ordinance  adopted last year led to the first proposed amendment allowing 325 total STRs, but no whole-house rentals. Many of the union’s members argued that competition from STRs threatened their jobs in hotels and while simultaneously making much-needed housing unavailable to them.

Jonah Breslau of LAANE (Los Angeles Alliance for a New Economy) spoke against the compromise. Identifying himself as a former hotel bellman, he said it was frustrating to hear UNITE HERE union members who reside in Fullerton and who spoke that night out of concern for their own interests being called “outside interests” by a “small group” of property owners looking out for their own interests. He said the Council members would have to decide whether they would stand up for housing or short-term rentals, and that union members believed the whole house ban was itself an “excellent compromise.” He and others urged the Council to return to that model.

Under the earlier measure, STR owners would have up to a year to keep using their properties as rentals before either adhering to the whole-house ban or ceasing to rent them out.

STR owner James Hong supported the 100-limit compromise, taking issue with Council member Jesus Silva’s assurance in an earlier meeting that property owners who purchased homes within the last 6 months, but chose to sell them sometime during the next year if they couldn’t use them for whole house rentals would not be in danger of losing money on their investment due to the strong housing market. Hong countered that new flooring, cabinets, kitchen, and other upgrades, including sewer pipes, represented more total expenses than could be recouped within 12 months.

Attorney Fred Gaines, who represents 40 STR owners, said that other businesses, like sober living houses, are allowed in residential neighborhoods.

Before moving the item to a vote, Fred Jung pointed out that championing the rights of property owners or union members was different than the Council’s task of governing, calling 100 whole-house rentals “an ample compromise,” before pointing out that the cities of Irvine, Anaheim, Orange, and Villa Park had all banned STRs outright at some point, but were still experiencing affordable housing issues.

Council members Ahmad Zahra, Jesus Silva, and Fred Jung were joined by a reluctant Mayor Bruce Whitaker in approving the compromise amendment. Whitaker said, “I do want to assure those who will be the losers on this that I certainly fought for your cause.” Mayor Pro Tem Nick Dunlap opposed the measure, citing figures showing that only a small fraction of Fullerton housing would be affected even under the larger number of 325 whole house rentals in the Council’s original ordinance.