The Fullerton City Council is preparing to discuss an urgent ordinance on May 20 aimed at establishing a temporary moratorium on new short-term rentals (STRs) within the city. This proposed initiative is designed to protect public safety, health, and welfare as city staff evaluate the impact of STRs and work to create appropriate regulations.

According to city staff, the urgency ordinance would put a stop to the approval of new STRs for a limited time, allowing for a comprehensive assessment of how these rentals influence the community. Officials assert that the moratorium is not expected to significantly affect the city’s finances, as the Transient Occupancy Tax (TOT) will continue to be collected from existing short-term rentals, which to date have generated approximately $1,054,000 in STR-related TOT revenues.

The discussion on STR regulation gained momentum after the adoption of Ordinance No. 3290 on November 2, 2020. This ordinance laid the groundwork for a permitting system and established operational standards for rentals of fewer than 30 days, as codified in Fullerton Municipal Code (FMC) Section 15.55.020(F). The regulations were modified on April 20, 2021, following community feedback, resulting in a prohibition on “whole-house” rentals when the owner is absent, effectively narrowing operations to “home-sharing” arrangements. Existing operators were granted a one-year compliance period. Additionally, Resolution No. 2021-30 reduced the cap on whole-house STR permits from 325 to 100, while placing no restrictions on partial rentals.

Current regulations mandate that all STRs register, collect TOT, and comply with the City’s Good Neighbor Guidelines. These guidelines aim to minimize community disruptions related to noise, parking, and property maintenance. However, despite compliance from many STRs, the city still grapples with unpermitted operations, safety inspections, and enforcement challenges. Reports indicate that approximately 180 operators are currently operating without permits, complicating enforcement efforts and raising concerns over community well-being.

City staff are tasked with monitoring violations, issuing citations, and ensuring compliance; yet, existing regulations lack efficient measures to tackle unpermitted operations. There are also concerns regarding property owners who may modify properties for STR use without necessary building permits, which poses safety risks that may only be identified after approvals or during inspections.

Additionally, the City has faced STR applications that, while compliance-technical, have generated substantial neighbor opposition based on quality-of-life concerns. The proposed emergency moratorium seeks to provide city staff with crucial time to reassess the current policies, address enforcement complexities, and develop solutions that equitably balance community interests with responsible STR operations.

As of April 2025, the City reported issuing 84 whole-home permits and 22 partial-home permits, setting the stage for a critical upcoming council meeting that promises to significantly influence the future of STR regulation in Fullerton.

The impact of STRs on community dynamics extends beyond regulatory compliance. Many homeowners cherish the sense of community fostered by familiar neighbors, contrasting sharply with the transient nature of short-term guests who may inadvertently disrupt neighborhood harmony.

Real estate investors often face a choice between short-term and long-term rentals. While STRs offer flexibility and potentially higher earnings, they demand more hands-on management and are susceptible to market fluctuations. Conversely, long-term rentals provide stable income and require less frequent management, targeting a more consistent tenant base.

Neighbor complaints related to short-term rentals are increasingly common, often citing issues like excessive noise, parking congestion, and trash accumulation. Over time, such grievances can strain neighborly relationships, exacerbated by the lack of familiarity that short-term tenants have with local norms.

Long-term rentals, typically leased for a year or more, are designed to offer steady housing solutions for individuals and families seeking stability. These rental agreements clearly outline the rights and responsibilities of landlords and tenants, focusing on consistent monthly income with reduced turnover.

Ultimately, as the City Council prepares to deliberate on this crucial measure, the health of Fullerton’s neighborhoods and the dynamics of its rental market remain at the forefront of community discussions.