Staff presented Fullerton’s 2025 Annual Housing Element Progress Report to the City Council on March 17, 2026, noting that all California jurisdictions are required to submit an update to the state by April 1 each year.

Fullerton has been assigned a Regional Housing Needs Assessment (RHNA) target of 13,209 units for the 2021–2028 planning cycle. These units are distributed across affordability categories, including above moderate (market rate), moderate, low, and very low income. New reporting categories—extremely low and acutely low income—have been added, though the city currently has no assigned targets for those levels.

Since 2021, Fullerton has received credit for 1,384 units, leaving a remaining obligation of 11,825 units.

Housing production includes a mix of single-family, multifamily, and accessory dwelling units (ADUs). ADU production has steadily increased, from 60 units in 2021 to 160 units in 2025. Multifamily production has fluctuated depending on project activity.

The city currently has 11 large residential projects (25+ units) in various stages. Three projects are under construction: Point Commons, The Fullerton, and The Pines. Two projects are stalled due to financial constraints, while the remaining are in plan check, staff review, or environmental review.

Council Questions and Discussion:

Councilmember Dr. Ahmad Zahra asked whether “above moderate” income is equivalent to “market rate.” Staff confirmed that the terminology has changed, but the meaning is effectively the same.

Zahra expressed concern over the city’s slow progress, particularly in meeting affordable housing targets.

Community and Economic Development Director Sunayana Thomas attributed delays largely to economic conditions, including high interest rates, rising construction costs, and financing challenges. Several approved projects have stalled because they are no longer financially feasible.

One example cited was the Atlas Fullerton project (approximately 400 units near Lemon Street and Orangethorpe Avenue), which required multiple extensions before finally breaking ground after several years. Other projects, including Casa Bella (25 units) and a development on State College Boulevard, remain on hold due to financial constraints.

Thomas emphasized that these challenges are not unique to Fullerton but reflect broader statewide trends. Developers often secure entitlements based on initial assumptions, but shifting market conditions—such as financing costs and construction pricing—can render projects unviable.

Zahra questioned why nearby cities like Anaheim have been more successful in meeting housing targets. Staff cited several factors, including land availability, lower land acquisition costs, and fewer site constraints. Fullerton has limited vacant land, requiring costly property acquisition and demolition, which increases project costs.

Affordable Housing Challenges:

Zahra asked what the city can do to encourage more affordable housing development.
Staff responded that the city has taken steps to streamline processes and adopt a compliant housing element, but emphasized that development ultimately depends on private market conditions.

Affordable housing projects face additional challenges due to complex financing structures, including reliance on tax credits and layered funding sources. Limited availability of these resources has slowed project development.

Council Comments:

Zahra requested a comparative analysis of housing production across Orange County cities to identify best practices.

Mayor Pro Tem Nicholas Dunlap noted that Fullerton’s housing element approval was delayed in part by litigation. He clarified that the city was already in progress before staffing turnover caused delays.

Council discussion also highlighted broader market dynamics, including increased borrowing costs and competition for limited state and federal affordable housing funding.
The role of surplus city-owned land was identified as a key tool for supporting affordable housing development.

Additional Project Update:

Councilmember Dr. Shana Charles asked about a long-delayed project at Placentia Avenue and Yorba Linda Boulevard (Target site). Staff explained that progress depends on the primary leaseholder, Target, and that previous development proposals have expired. The site remains in a holding pattern.

Public Comment:

A speaker argued that Fullerton’s zoning code and development standards—such as minimum lot sizes, parking requirements, and design rules—are limiting housing production, particularly “missing middle” housing like duplexes and fourplexes.

The speaker warned that due to the city’s lack of progress, state laws such as SB 35 could reduce local control over development approvals. Additional legislation, including SB 79 and policies enabling housing on college campuses, may further expand development opportunities regardless of local action.

Council Action:

The City Council voted to authorize the City Manager to submit the Housing Element Annual Progress Report to the state. The motion passed unanimously.