Fullerton's Development Story Starts With a Lawsuit

By Eric Engelbert  |  Originally published July 2026, updated September 2026

Most cities in Orange County are adding housing because the state told them to. Fullerton is adding housing because the state told them to, then sued them when they did not move fast enough, and then signed a legal settlement that set hard deadlines for compliance. The Governor's office, the California Attorney General, and the Department of Housing and Community Development were all involved. It is the kind of regulatory pressure that does not leave much room for debate at the local level.

The result is one of the most dramatic rezoning programs in Orange County history, and in 2026 it is finally producing real buildings. This guide covers both halves of the story: the policy framework that unlocked the growth, and the specific projects now under construction or moving through city hall. Each major project has its own detailed post, linked below.

The Mandate: 13,209 Units and a 600 Percent Increase

Every California city receives a Regional Housing Needs Assessment allocation each planning cycle. For the 2021 to 2029 cycle, Fullerton's allocation is 13,209 units. To understand how significant that number is, the previous cycle's requirement for Fullerton was 1,841 units. The 2021-2029 mandate is more than 600 percent higher than what came before it.

Of the 13,209 required units, 5,187 must be deed-restricted for low or very low income households, which is the category that the private market is least likely to produce without subsidy or regulatory incentive. The remaining units are spread across moderate and above-moderate income categories where market-rate development is more feasible.

When Fullerton inventoried its existing capacity, the shortfall was nearly the full 13,209. The city simply did not have enough residentially zoned land to accommodate the mandate through existing zoning alone. The entire city needed to be rethought as a place where housing could be built on parcels that had never previously allowed it. That is what the Housing Incentive Overlay Zone is designed to accomplish.

How the State Forced Fullerton's Hand

California has been systematically using legal enforcement to push cities that resist housing growth into compliance. Fullerton became one of the higher-profile cases. The city failed to adopt a state-compliant Housing Element within the required timeline, which triggered an enforcement action by the California Department of Housing and Community Development.

In January 2024, California Attorney General Rob Bonta, Governor Gavin Newsom, and state housing officials announced a formal settlement with the City of Fullerton. The terms were specific and legally binding:

  • Adopt a compliant Housing Element no later than November 5, 2024
  • Modernize the city's zoning code to accommodate new housing by December 29, 2024
  • Comply with the Affirmatively Furthering Fair Housing statute, which requires the city to actively work against patterns of segregation in its housing planning

The City Council adopted the Housing Element on January 7, 2025, slightly past the settlement deadline but close enough to satisfy the state's core requirements. The HIOZ zoning program followed as the implementation mechanism, converting the policy commitments of the Housing Element into legally enforceable zoning changes on the ground.

The HIOZ: 759 Parcels, By-Right Approval, and What It Means for Developers

The Housing Incentive Overlay Zone is the legal mechanism that makes Fullerton's housing mandate executable. Applied to 759 currently non-residential parcels across 593 acres of the city, the HIOZ allows developers to build multifamily housing on land that previously could not accommodate it, under a streamlined by-right process that eliminates the lengthy discretionary approval hearings that can delay California projects by years.

The deal for developers is straightforward: include a minimum of 20 percent deed-restricted affordable units in your project and you qualify for by-right approval. No lengthy environmental review, no discretionary hearing, no opportunity for neighborhood opposition to kill the project through the approval process. The city processes the application administratively if the project meets the overlay zone's design and affordability criteria.

The total theoretical buildout capacity of the 759 HIOZ parcels exceeds 35,000 units, far more than the 13,209 the state requires. That headroom is intentional: California's housing law requires cities to demonstrate capacity at 125 percent of their RHNA allocation to account for projects that do not move forward. The realistic number of units that will actually be built through 2029 will depend heavily on interest rates, construction costs, and market conditions, but the legal and zoning pathway is now open in a way it has never been before in Fullerton.

The Fullerton Transportation Center: The Transit-Oriented Anchor

The most significant long-term development opportunity in Fullerton sits on 35 acres immediately adjacent to the Fullerton Transportation Center, Orange County's busiest Metrolink station. The FTC serves approximately 3,000 passengers daily on Metrolink commuter rail lines connecting Fullerton to Los Angeles, Riverside, and San Bernardino, as well as Amtrak's Pacific Surfliner between San Diego and San Luis Obispo.

The City of Fullerton commissioned the Fullerton Transportation Center Specific Plan, a form-based code framework that envisions:

  • 1,560 multifamily residential units
  • 100,000 square feet of retail
  • 100,000 square feet of office space
  • 120,000 square feet of hotel development
  • A new parking structure, parks, and pedestrian-oriented public space
  • Preservation of the site's historic buildings

The FTC development is a long-term vision rather than an immediate construction project, but the planning framework exists, the site is identified, and 3,000 daily train passengers already provide the built-in ridership that makes transit-oriented development at this scale viable. California's SB 79, which took effect in 2026, further strengthens the case by upzoning parcels near high-frequency transit statewide, so land within walking distance of Fullerton's train station now has enhanced by-right development rights under state law.

What Is Being Built Right Now

The framework above is what unlocked the growth. Here is what it is actually producing. Fullerton reports more than 1,100 units approved or under construction across the city, with more in plan check. The biggest projects each have a dedicated guide:

Atlas Fullerton: 329 apartments at the Town Center

A national developer, The Dinerstein Companies, is converting an underused portion of the Fullerton Town Center at Orangethorpe and Lemon into a 329-unit, five-story apartment community with ground-floor retail. Anchor tenants like Amazon Fresh, AMC Theaters, and Costco stay put while surface parking and dated retail become housing. Completion is expected in 2027. Read the full Atlas Fullerton guide.

Pineridge (The Pines at Fullerton): 113 new homes for sale

Lennar replaced the old Sunrise Village shopping center at Euclid and Rosecrans with 113 for-sale homes, now marketed as Pineridge. The detached Torrey single-family homes, which released around $1.5 million, have sold out, and the Hazel townhomes are still releasing from around $1 million. This is one of the few new-construction ownership options in the city. Read the full Pineridge guide, including current pricing and the special tax district.

Student housing near Cal State Fullerton

A large student-oriented project of roughly 420 units plus retail is being delivered along East Chapman Avenue near campus. Purpose-built student housing provides a stable occupancy floor that makes these projects easier to finance even when broader demand softens.

Pointe Commons and the affordable pipeline

Pointe Commons, a 62-unit affordable development at 1600 W. Commonwealth, is one of several affordable and HIOZ pipeline projects moving through the city's review process, representing the first wave of development under the new by-right pathway.

The City Opens Five Downtown Sites to Housing

The most significant policy development of 2026 came on August 18, when the City Council voted 4 to 1 to direct staff to begin the preliminary work needed to open several city-adjacent sites to housing, including three city-owned properties. Several are municipal parking lots in and around downtown, which marks a real shift: rather than waiting for private developers, the city is now studying its own land for housing.

A planning firm called PlaceWorks, supported by a $300,000 REAP 2.0 grant, narrowed eight candidate sites down to five. The vote does not approve construction. It authorizes staff to start the Surplus Land Act process, zoning reviews, and site analysis. The five sites under study are:

  • 118 W. Santa Fe Avenue. A city-owned lot next to the Transportation Center, prioritized as the strongest opportunity, able to share the nearby SoCo parking garage so no new structure is needed. Staff recommended focusing here first, with a rezoning from industrial to mixed-use.
  • 122 Pomona Avenue. Strong potential, but an existing parking structure raises costs and would likely require smaller units and reduced parking.
  • 1401 S. Harbor Boulevard. A privately owned site where the existing bank would remain and roughly 65 homes could be added through a lot split.
  • 125 Chapman Avenue. A city-owned parcel now used for Events Center parking, leaning toward residential with leasing and amenity space instead of storefronts.
  • 2200 W. Orangethorpe Avenue. A church-owned site that could deliver up to 36 homes under California's SB 4, the 100 percent affordable pathway for housing on religious property, with no CEQA review required.

The study found that combining the Chapman and Harbor sites could produce as many as 52 affordable units, versus about 10 to 13 if developed separately. The process will take years, not months, but the direction is clear: Fullerton is now looking at its own downtown parking lots as future housing.

Harbor Boulevard Gets a Road Diet

One of the clearest signals that a city is serious about density is investment in the pedestrian and cycling infrastructure needed to support more residents living close together. In April 2025, Fullerton secured a $4.85 million grant from OCTA and SCAG for the Harbor Boulevard Complete Streets Improvement Project, and construction was scheduled to begin in summer 2026.

The project reduces Harbor Boulevard from six lanes to four between Brea Boulevard and Valencia Mesa Drive, converting the freed-up space into buffered bicycle lanes and improved sidewalks. Narrowing the roadway slows traffic, makes crossing easier on foot, and creates the conditions where ground-floor retail can succeed and residents feel comfortable walking to the train station, the coffee shop, or the park rather than driving to each. For the Transportation Center area and the downtown sites now under study, a more walkable Harbor Boulevard makes the case for transit-oriented development even stronger.

Cal State Fullerton and the Built-In Demand Base

Any discussion of Fullerton's housing market has to account for Cal State Fullerton, one of the largest universities in California with more than 40,000 students and a significant faculty and staff population. CSUF sits less than two miles from downtown and generates consistent, year-round demand for rental housing in a way that most Orange County cities simply do not have.

Student housing demand is particularly valuable for infill development economics because it is not cyclically sensitive in the same way that traditional homebuyer demand is. Students need to live somewhere near campus regardless of interest rates. That baseline demand provides a floor under rental occupancy and helps justify new construction when market-rate demand from working professionals might be softer. Combined with transit access to Los Angeles employment and the HIOZ by-right pathway, it creates a compelling case for Fullerton as a multifamily market over the next decade. A growing renter population drives demand for ownership housing as well, and as density increases around downtown the neighborhood becomes more urban and walkable, which historically translates to sustained appreciation for owners who bought before the transformation is complete.

Key Dates and Numbers

Milestone Date / Figure
Fullerton RHNA allocation (2021-2029) 13,209 units (600%+ over prior cycle)
State settlement with Fullerton announced January 2024
Housing Element adopted January 7, 2025
HIOZ parcels rezoned for by-right housing 759 parcels / 593 acres
HIOZ total buildout capacity 35,611 units (theoretical max)
Units approved or under construction (2026) 1,100+
Atlas Fullerton (Town Center apartments) 329 units, completion 2027
Pineridge / The Pines (Lennar for-sale homes) 113 homes (Torrey sold out, Hazel from ~$1M)
Chapman Avenue student housing ~420 units + retail
Five downtown sites opened to housing study City Council vote August 18, 2026
FTC Specific Plan: site size 35 acres (adjacent to Metrolink/Amtrak)
FTC Specific Plan: residential units at buildout 1,560 units + hotel/retail/office
Daily Metrolink/Amtrak passengers at FTC 3,000
Harbor Blvd Complete Streets grant April 2025 ($4.85M from OCTA/SCAG)
Harbor Blvd construction start Summer 2026

What This Means for Buyers and Sellers

Fullerton is in the middle of a transition that most Orange County cities are only beginning. The regulatory framework is now producing real projects, and the pace is accelerating.

For buyers, the near-term ownership opportunity is clearest at Pineridge, where new townhomes are still releasing but the single-family homes are gone, and in the growing rental market around downtown and CSUF as communities like Atlas come online. For owners, the longer-term picture is favorable. As density increases around downtown and the transit corridor, the area becomes more urban and walkable, which historically supports sustained appreciation for people who bought before the transformation was complete. The downtown parking lot conversions, if they move forward, would reinforce that trend by putting more residents and activity into the heart of the city.

Explore Homes for Sale in Fullerton and Nearby

Fullerton is one of many North Orange County cities reshaping their housing landscape. See every development across the county on the New Developments in Orange County page.

Homes for Sale in Fullerton  |  New Construction in Fullerton  |  Brea  |  Anaheim  |  Placentia  |  Buena Park

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