Robbins: Stonewalling Continues on Anaheim Short-Term Rental Issue

Over the past several months, residents from all corners of Anaheim have united behind a single banner – one that represents a desire for the Anaheim City Council to impose a ban upon short term rentals in a city that has long been known for its irrefutable ties to the Walt Disney Company and tourism as a whole.

For those who may be unaware, short term rentals are essentially an offshoot of the oft-mentioned “sharing economy” wherein individuals utilize platforms, such as Homeaway.com, to list their properties for rent to “vacationers”. In Anaheim, property owners are permitted to rent their homes out for three days at a time to individuals from all walks of life – families going to Disneyland, individuals attending conventions, and even groups of rowdy teenagers seeking a party destination in the heart of our city.

More or less unsurprising is the fact that each of the aforementioned groups pose different types of threats to the fabric of our communities and are, as a result, turning Anaheim’s residents against the tourism industry.

It is no secret that Anaheim’s economy is driven by tourism. According to the 2015-2016 annual budget for Anaheim, 37% of the city’s general fund is derived from TOT (transient occupancy taxes), which is expected to clock in around $132,989,000, an amount that far exceeds that of surrounding cities. For reference, Garden Grove’s 2015-2016 budget projects $19,000,000 in TOT Taxes (19% of the general fund) and Newport Beach’s 2015-2016 budget projects $20,656,850 in TOT taxes (10.77% of the general fund).

With that being the case, it came as no surprise when, in May of 2014, the Anaheim City Council passed a new ordinance that regulated the short term rental industry. A year later, the properties were met with the requirement of paying TOT. These actions were taken with minimal input from Anaheim residents, but instead incorporated feedback from those already operating short term rentals. As a result, we inevitably had a new ordinance written by the very people that the ordinance was going to be imposed upon. In the words of David Belmer, the current Anaheim City Planner, the short term rental owners had to be “dragged kicking and screaming” to the table to discuss the implementation of TOT on their businesses. At the time, the ordinance was seen as effective by city leaders, given that Anaheim would be receiving the ever-valuable TOT from this new form of hospitality. From that point on, short term rentals remained a non-issue, until the middle of 2015, when it was discovered that over 500 properties in the city were operating as short term rentals – many of which were unpermitted, and many of which were being operated by owners who had no regard for residents’ wellbeing.

As this issue ballooned into the debacle it is now, it quickly became apparent that short term rentals in Anaheim were not at all an example of the aforementioned “sharing economy”. Rather, investors were seizing the opportunity to buy up as many houses as possible, often purchasing in cash (and over the asking price), in order to maximize their market exposure. In fact, certain short term rental owners, very few of whom actually reside in Anaheim, own over 30 properties spread throughout the city. Others established their territory in certain Anaheim communities. Andy Emory (Suite Escapes Vacation Rentals) took Sherwood Village, while Ryan McIntosh (Funtierland Vacation Rentals) took Pepperwood/Kaleidoscope Village. Andy Emory, in particular, has gone as far as suing the Sherwood Village HOA when efforts were made to ban short term rental properties in their community. Talmadge Price (Anaheim Castle House) was one of the short term rental operators that diversified his holdings across the city. On his website, Anaheimcastlehouse.com, one can view the properties, many of which are named after Disney entities. This particular owner seems to enjoy the utilization of Disney copyrights in full – often covering bedroom walls in Disney-themed murals. The catch, in all of these scenarios, is a capitalization on the properties’ proximity to Disneyland, and the irrefutable disregard for the inevitable consequences that may arise from a lawsuit courtesy of Disney’s legal department.

So why does all of this matter to Anaheim residents?

Truth be told, it doesn’t – but I felt compelled to give some background information regardless.

Anaheim residents, on the other hand, care about preserving the sanctity of the communities they have come to know and love. Anaheim, as the “City of Kindness”, seems to have demonstrated a general disdain for “kindness” being shown to residents, and has, instead, launched full force into their efforts to demonstrate kindness to tourists. After having had their concerns rebuffed for years by different departments in Anaheim, residents found themselves fed up with the stonewalling coming from Anaheim’s leaders.

While the Anaheim City Council responded to residents’ concerns with a moratorium on new permits in September 2015, this action seems to have simply fanned the flames and provided residents with evidence that something can, indeed, be done to get short term rentals out of their neighborhoods. By this point, it had become clear that short term rentals, as a business model, were not at all compatible with Anaheim’s neighborhoods. Residents have gotten into verbal altercations with tourists, as well as owners, when expressing concern regarding the actions of the aforementioned tourists. Needless to say, residents are not keen on having to listen to parties that rage into the late hours of the night, nor are they keen on the increased parking problems, trash, and large groups that accompany the operation of a short term rental.

Given the recent support granted to the residents cause by the AUHSD Board of Trustees, perhaps it is also worth mentioning the impact that these properties have on the fabric of residential populations. The 500 properties operating as short term rentals negatively impact not only their neighbors, but also negatively impact the number of children living in Anaheim, negatively impact the availability of single-family homes to permanent residents, and negatively impact a tourism industry that would generate significantly more revenue if the short term rentals guests instead stayed at hotels (in the form of TOT, increased restaurant attendance, and overall greater spending by guests).

Therefore, one has to wonder why the City Council would continue to stonewall the residents on this issue. Could it be about money? Given that short term rentals generate a meager $3.2 million in TOT (just 2.4% of TOT collection), that would be a poor excuse for their continued existence. Could it be about ties to short term rental owners? In a private meeting with ban-STR representatives, Jordan Brandman personally took responsibility for this issue – citing close ties with Frances Noteboom, arguably the owner/operator of Anaheim’s first short term rental, and one of the owners who’s input was heavily utilized in the formation of the first STR ordinance. Kris Murray personally appointed Kandee Beas (a short term rental owner who served as one of six owners on the committee formed to negotiate over the new short term rental ordinance) to Anaheim’s Community Services Board.

Whatever the reason may be, Anaheim residents are no longer willing to put up with short term rentals in their neighborhoods, and should their demands for a ban not be met, chaos is almost guaranteed to ensue. Residential zones are classified as such as a reason, and the usurping of residential zones by STR owners will no longer be met with the kindness that the city is expected to represent.

Daniel Robbins is a 22 year resident of Anaheim and a recent graduate of CSUF with a degree in International Economics.

Opinions expressed in editorials belong to the authors and not Voice of OC.

Voice of OC is interested in hearing different perspectives and voices. If you want to weigh in on this issue or others please contact Voice of OC Involvement Editor Theresa Sears at TSears@voiceofoc.org

  • Chiron Click

    Virtually every municipality in the country allows owner-occupied, primary-residence “home-share rentals”, while many restrict non-owner occupied “vacation rentals”. That is because owner-occupied rentals, like b&b rentals are supervised, and also don’t take away housing stock from the community. Santa Monica is an example of this. Because Anaheim is a tourism-driven economy, however, it would make more sense t simply step up enforcement. Is there a court that handles nuisances? Could a 3 strikes policy be instituted so that “bad actors” would be weeded out, while responsible owners could function?

    • Daniel Robbins

      Hi Chiron,

      Unfortunately, as has been demonstrated over the course of the past year, code enforcement in Anaheim is unable to adequately handle the issues that have arisen as a result of short term rentals.

      In case you aren’t aware, I’d like to bring up the Anaheim Rental Alliance, and their ties to the initial ordinance regulating short term rentals (4.05). If you have time, to and watch the Anaheim city council meeting from May 6th, 2014. In it, you will be able to note how often the city council thanks the ARA for all of their input. If memory serves me correction, the entirety of the city council thanks them at one point or another. Therefore, it can be concluded that the current ordinance was authored by those who it would be regulating.
      Now, originally the ARA was intended to be a group of owners who respected the community and wished to see everyone prosper. As short term rental investment became increasingly popular in Anaheim, control was taken by those who can, irrefutably, be deemed “bad owners”.

      In a document request from the city, it was discovered that the representatives on the short term rental side of the task force, set up in late 2015, had dozens of police responses to their properties, and had tens of thousands in fines from the city for violating municipal codes. These were considered to be the “good owners”.

      Needless to say, you can see where the problem arises. If someone owns 10 properties, do all of the permits get pulled if one gets “striked” out?

      The city has demonstrated a great level of neglect in their closing down of the properties found to consistently be violating municipal codes. Two weeks ago, a group of STRs received notices stating that their utilities were going to be shut off if they continued to operate illegally.

      And yet, most, if not all of them, are still occupied by renters today.

      So the question arises: at what point do the residents lose faith in the cities ability to regulate these properties? If the city is unable to regulate with the current municipal code, what would make anyone believe that more rules, requiring more enforcement, would be the answer?

      Lastly, what exactly is a “good owner”, and where are they hiding? The owners who are supposed to be “good” have been outed as, in fact, being quite “bad”.

      • Chiron Click

        Thanks for your reply. Again, having an owner-occupied primary residence restriction is the easiest solution. But yes, if investor owned STR is allowed, then if an owner has 3strikes that the court deems legitimate, then all of their licences should be revoked.

  • Pierre

    We need a ban on STR:s. The area is zoned residential for a reason. This is our refuge, our home. We don’t need problems with noise, trash, our cars being hit, excessive traffic and more. I own a small business and have to keep it in the area zoned for that, it’s how it should be. When STR:s move in among us, we have no say so. All of a sudden there is a noisy business next door! Keep tourism in the zoned hotel areas.
    A complete STR ban is the solution.

  • Austin Lynch

    Daniel is right; STR’s are hurting Anaheim neighborhoods, housing and jobs. Los Angeles is taking a sensible approach – we should follow their lead