Council members say the Camping and Storage of Personal Property Ordinance would require public streets in Merced to be clean and accessible.
Unhoused residents also face jail time if they are caught storing cots, sleeping bags and other personal property within 500 feet of a school.
City workers would also have the authority to clear encampments and personal property immediately if code enforcement determines they pose a threat to life, health and safety.
Over the summer, Governor Gavin Newsom told local government agencies to address encampments or risk losing out on state funding.
He also ordered state agencies to do the same after a Supreme Court ruling that cleared the way for camping bans.