After years of debate, the Fullerton City Council adopted a measure in a 4-1 vote to regulate the number of short-term rentals in the city with new guidelines and taxes in place for rental operators.
Now, homeowners who rent out rooms or entire houses like Airbnb will be required to register with the city, follow parking and noise complaint regulations and pay the same taxes as motels and hotels based on rental costs per night.
The city also set a cap of 325 permits for whole-house rentals, which could force some of the current 333 properties to close down, and will prohibit any new developments without going through the city first.
The motion received broad public support, as multiple commenters and council members raised concerns that allowing so many full-house rentals would make it harder for long-term residents to find housing.
Owners of the property will be required to stay on-site or in the area, and register a phone number with the city in case of any complaints about the visitors.
“I asked for this to be put back on the agenda so that we could try to make a good decision and put to rest an issue that we've been studying and studying,” said Mayor Jennifer Fitzgerald. “I will be honest, it's not the ordinance I would like, but I think it's a good compromise.”
Councilwoman Jan Flory, a former real estate broker, was one of the motion’s biggest supporters as well, saying it allowed a new framework for the city to manage the business and revoke licenses for the rule-breakers.
“I'm very sensitive about turning our residential neighborhoods to a commercial use. We didn’t buy our homes because we wanted to live next door to a motel, I get that,” Flory said. “But I think this ordinance is a good balance between people who are already employing this use for property, and protecting the residential character of our neighborhoods.”
Councilman Bruce Whitaker, the sole “no” vote and a professed libertarian said he was concerned about the amount of work it would bring for the city. He said he disliked how the regulation would affect all the rentals, not just bad landlords who refused to comply with parking and noise requirements.
“Those problems, whether it's a short-term rental or it’s a full-time resident, they can be handled by other means,” Whitaker said. “I’m concerned about that approach, because it keeps expanding the city government’s mission. As what was mentioned, we’re going to have a huge amount of volume with first of all making sure these people are compliant.”
City staff projected the new system would net over $340,000 a year for the city.
The new taxes come as Fullerton desperately searches for new sources of revenue to help the city’s increasingly shrinking savings.
The city has placed a measure to increase sales tax in front of voters this November labeled Measure S. According to city staff, without the new taxes, the city will have to cut at least $5 million out of the budget every year to stay out of debt and would still be out of savings by 2025.