Brea city officials introduced a short-term rental pilot program last week, alongside an associated permit tagged with a $1,000 fee.

The pilot program is expected to bring in $500,000 in revenue annually, with the permits generating $100,000 and Transient Occupancy Tax – a hotel bed tax – making over $400,000.

Short-term rentals are often used as Airbnbs and Vrbos, and are popular alternatives to hotels in high-tourist areas, offering stays less than 30 days.

Before the recent council decision, short-term rentals were illegal in the city because of concerns of noise and parking – although city officials noted some have been operating in the city, regardless of city laws.

The pilot program will require that residents obtain a permit to rent out a property in the city and must be renewed yearly.

Permits come with a $1,000 price tag and require the property to pass a building, fire, and safety inspection and hold a Brea business license.

Owners must provide on-site parking, limit guests based on available bedrooms, and require a minimum two-night stay.

Properties must also have signs notifying guests that outdoor amenities or noisy outdoor activities are prohibited between 10 p.m. and 7 a.m., to mitigate noise complaints.

Under the pilot program, accessory dwelling units, known as granny flats, and city-owned affordable housing cannot be rented out.

Despite the rentals being previously illegal in the city, it was reported at a December meeting that over 50 were operating.

“Our pilot ordinance does give us some more teeth to allow them (short-term rentals), but then also enforce in a less challenging way,” Community Development Director Jason Killebrew said at the Jan. 20 meeting.

The introduced ordinance will allow the city to crack down on the illegal residences, as well as making sure new short-term rentals follow the new regulations.

Since the program is a pilot, it will expire Dec. 31, 2029, unless the council votes to extend it.

“There is an opportunity to offramp if it does turn out to not be favorable for the city,” Killebrew said at a Dec. 16 meeting.

100 total permits will be distributed by a lottery system and will be designated by region. The Northwest sector will get 25, the Southwest sector will get 50 and the East sector will get 25.

The discussion surrounding short-term rentals was spurred by budget concerns brought to light in May of last year.

[Read: Brea Leaders Eye Airbnb Pilot Program Ahead of 2028 Olympics]

With two major upcoming tourist attracting-events occurring in Orange and Los Angeles  counties – the 2026 FIFA World Cup and the 2028 Olympics – short-term rentals have the potential to bring revenue into surrounding cities, like Brea.

OC Cities Eye Short-Term Rentals

Several other cities across the county are looking to introduce or update their short-term rental policies in the face of the 2026 FIFA World Cup and 2028 Olympics, following a recommendation by the OC Grand Jury.

[Read: Another Wave of Airbnb Regulations May Soon Come to Orange County]

Cities like Seal Beach, Orange and Newport Beach are allowing short-term rentals, with some regulations.

Other places like Santa Ana and Stanton have banned them completely, following resident complaints about noise and parking complaints.

According to a 2024-2025 report by the OC Grand Jury, complaints are often not responded to timely and citations are taking a long time to be filed.

“This, along with laxity in enforcement, may explain why fewer than ten percent of STRs record a complaint in a given year, a number that fails to reflect the frustration of STR neighbors.”

Michelle King is a Voice of OC Tracy Wood Reporting Fellow. Contact her at mcaitlin254@gmail.com