Fullerton officials are starting to look into potentially leasing or selling off three city owned parking lots in downtown to make way for new homes on the heels of slashing millions in spending to adopt a late budget. 

The move comes two years after settling a lawsuit with the state for failing to turn in the housing plan on time and as they struggle to make progress on their state mandated housing goals. 

Last week, city council members voted 4-1 to give staff the greenlight to look into potentially selling or leasing three public lots under state law requirements and start soliciting developers – prioritizing a vacant section of the SOCO parking structure across from Heroes Bar & Grill.

Staff will also be exploring housing opportunities at the Fullerton Transit Center parking structure and a surface lot off of Chapman Avenue across from Bank of America. 

Councilwoman Shana Charles said this is only a preliminary conversation on bringing housing to these locations. 

“This plan is an excellent one,” she said at the Aug. 18 meeting. “We’re starting the conversation, and it might end up being something that also helps our financial situation. Thinking about surplus land and also more housing in downtown, which is so walkable already, and people really can live, work, and play in that area.”

The three sites were chosen after the city received a $300,000 grant administered by the Southern California Association of Governments and the OC Council of Governments which they used to hire a consultant to search for housing opportunities in the downtown area. 

Councilman Nick Dunlap, the lone dissenting vote, raised concerns that community input wasn’t gathered first on what sites in the city should be looked at for housing and said the locations may be better for retail.

“Sometimes we just kind of put the cart before the horse, and I think that happens when you don’t get the community input,” he said. 

“I do have concerns about just some of the renderings and the way things are presented with respect to these really high-density residential developments – areas that , in my view, would be a little more conducive to retail commercial uses.”

The direction comes right after elected officials slashed millions in spending on a score of vacant positions including seven public safety openings, library programs & staffing, city events and graffiti removal after failing to agree on a sales tax measure earlier this year.

[Read: Fullerton Defunds Vacant Positions, Library Services & More to Balance Late Budget]

Consultants estimate if all three sites are developed the city could collect over $418,000 in building permit fees and nearly $3.2 million in park fees.

A view of the SOCO District of Downtown Fullerton on Oct. 5, 2025. Credit: ERIKA TAYLOR, Voice of OC

Councilman Ahmad Zahra said building housing and retail at the SOCO parking lot would help drive up foot traffic.

“This could drive people to encourage them to walk along and then create that sort of connection and so it may help the other businesses,” he said. “It’s a good site for maybe a nice and interesting, creative concept of housing.”

According to a staff report, there could be potentially 60 housing units and 4,500 sq feet of retail space at SOCO parking site, 100 housing units at the Fullerton Transit site and possibly 105 across from Bank of America. 

Consultants also said each site would have to have some level of affordable homes, adding that 10% of units for very low-income residents would work with developers’ financing. 

“Everything we modeled here has some affordable housing in it because they’re all using state legislation to increase the density over what’s allowed now and that comes with a requirement to provide some amount of affordable housing,” said Steve Gunnells, Chief Economist for PlaceWorks – the consultant.

“Generally, what seemed to work best across all of these was 10% very low income.”

The Orange County median income for a four-person household is $136,600, with low income households making $135,350 annually and very low income households making $84,600. 

Under the state’s current housing planning cycle that started in 2021, Fullerton officials have to zone for over 13,000 new homes by 2029 and close to 5,200 of them have to be designated for very low and low income families.

So far, the city has permitted over 1,300 homes since the start of the cycle through 2025, according to a California Department of Housing and Community Development database.

Dunlap said the city isn’t deterring housing opportunities.

“We get beat up constantly about housing. The City hasn’t actually said no to housing. The market forces have not supported housing development,” he said 

“In the time that I’ve been on council, I think every housing project that’s come forward has gotten approved.”

Hosam Elattar is a Voice of OC reporter. Contact him at helattar@voiceofoc.org.

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