Orange County Grand Jury • 2024-2025 • Agency Response
Response to: Long-Term Solutions to Short-Term Rentals 05/22/2

Long-Term Solutions to Short-Term Rentals*

Published: July 20, 2025 7 pages
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Findings and Recommendations 12 findings

F1
Despite increasing media coverage of Online Booking Agencies (OBAs), STRs are not a new phenomenon in Orange County. Response: The respondent agrees with the finding. Short-term rentals have existed in Orange County for decades, particularly in coastal and tourism-centric areas. While Fullerton is not a coastal city, we recognize the historical context of STRs and their evolving impact on communities. Our proximity to attractions in the region makes STRs desirable within the community.
No recommendations for this finding
F2
The steady growth of STR usage in the last decade raises concerns of potential public nuisance. Response: The respondent agrees with the finding. THE EDUCATION COMMUNITY 303 West Commonwealth Avenue, Fullerton, California 92832-1775 (714) 738-6311 • [email protected] • www.cityoffullerton.com The City agrees that the proliferation of STRs has amplified concerns about noise, parking, trash, and neighborhood disruption. These issues contributed to the City Council's adoption of an urgency ordinance for a short-term rental moratorium on July 15, 2025, prohibiting new STR permits and phasing out existing non-compliant ones.
No recommendations for this finding
F3
Even with robust Code Enforcement, a city's statutory ban on STRs is not enough to keep STRs from operating. Response: The respondent agrees with the finding. The City of Fullerton agrees that OBAs and associated entities operate through various methods to post STRs and collect revenue through unregulated or illicit avenues. Furthermore, statutory bans such as the STR moratorium provide a defined set of tools for enforcement, however existing staff case loads and resources do not match this unmet need.
Related Recommendations (1)
R3
Cities that allow STRs should evaluate the benefit of ordinances facilitating Voluntary Collections Agreements requiring OBAs to submit TOT directly, by June 30, 2026 (F4,
F4
Anaheim's ordinance requires OBAs to report Transient Occupancy Tax (TOT) directly to the city. This has led to the favorable result that unpermitted STR income is reported to the city. Response: The respondent partially agrees with the finding. The City of Fullerton agrees that language within Anaheim's regulations mandates OBAs report all TOT tax to the city which has enhanced reporting. City of Fullerton Ordinance No. 3290 establishes TOT collections and identifies enforcement avenues that include administrative fines, penalties, and citations for hosting platforms. Fullerton recognizes this ordinance can be enhanced to mandate reporting by OBAs.
No recommendations for this finding
F5
Proactive home inspections of new and renewing STRs, which have been implemented in some Orange County cities, improve code enforcement and STR compliance with city ordinances. Response: The respondent agrees with the finding. The City of Fullerton agrees that proactive home inspections of new and renewing rentals can improve code compliance. A significant contributing factor to the City's adoption of the July 15, 2025, moratorium was due to the high volume of unpermitted construction work which has been directly tied to operation of unregulated short-term rentals.
No recommendations for this finding
F6
Direct remittance of taxes by OBAs does not capture all TOT for an STR because of direct booking practices. Response: The respondent agrees with the finding. Prior to the moratorium, Fullerton relied on operator self-reporting for TOT. We acknowledge that direct bookings and non-compliant operators can evade tax collection. The use of advanced web scraper tools can assist in identifying non-compliant listings through less popular OBAs.
No recommendations for this finding
F7
Some cities in Orange County have outdated systems for tracking short-term rental TOT making the process less effective and more difficult for staff. Response: The respondent agrees with the finding. Fullerton has relied on advanced web scraping technology to identify rental amounts, unpermitted postings, and the like. These tools also organize data which can be analyzed further with less extraneous staff time.
No recommendations for this finding
F8
In some cases, STRs are improperly recharacterized as long-term rentals to circumvent the collection of TOT and any applicable penalties. Response: The respondent agrees with the finding. Fullerton has encountered several scenarios where operators allege that the STR falls within the definition of a long-term lease but will then swap or fall into the short-term rental territory when use is under 30 days. Unpermitted operators may swap between rental types to avoid penalties. In addition, some operators have been caught utilizing Accessory Dwelling Units (ADUs) for STR, which violations state ADU laws. In the case of Fullerton, the city has a Regional Housing Needs Assessment (RHNA) number of 13, 209 units, whereby ADUs are counted towards meeting this housing (i.e. long term) requirement. STRs cannot be counted towards meeting state RHNA housing requirements.
No recommendations for this finding
F9
Foreign language OBA's are outside the current capabilities of Code Enforcement to monitor and track unpermitted STR's. Response: The respondent agrees with the finding. While Fullerton relies on tools to identify postings, these are typically discovered through English language scraping and key terms. The opportunity for alternate language postings to present challenges in enforcement remains.
No recommendations for this finding
F10
Cities that fail to routinely review their STR waiting lists potentially lose TOT revenue and contribute to a greater prevalence of unpermitted STRs. Response: The respondent agrees with the finding. The City's tools allow for proactive monitoring; however, the tools alone cannot ensure compliance. Existing code enforcement and planning staff routinely assess the listed operators to follow up and establish a record of violation.
No recommendations for this finding
F11
Locations that have hosted major events have reported an outsized increase in demand and pricing of STRs, a situation OC is likely to experience with upcoming 2026 LA World Cup and 2028 LA Olympic games. Response: The respondent agrees with the finding. The City's moratorium stops further escalation of unpermitted rentals and maintains current level of operation. The City's proximity to the LA area as well as possible venues makes it an ideal location for temporary transient stays which can have outsized impacts.
No recommendations for this finding
F12
City leaders have no regular communication with each other concerning STR issues, limiting opportunities to develop strategies and expertise to improve service. Response: The respondent disagrees with the finding. The City's management team frequently attends collaborative discussions as it relates to pressing regional topics including Short Term Rentals. The City's code enforcement division also participates in regional and statewide collaborative trainings through the California Association of Code Enforcement Officers (CACEO) which discusses shared challenges and methods to address issues, including STR violations.
No recommendations for this finding

Conclusions 2

* This report's PDF did not contain easily extractable text and required Optical Character Recognition (OCR) for analysis. There may be minor errors in the extracted findings and recommendations due to OCR limitations with scanned documents.