Tourists coming to Anaheim could soon help fund housing for Disneyland workers, hotel employees and various other resort workers.
It comes as city officials eye reallocating a portion of tourism tax dollars collected to market the Disneyland Resort – a fund created through a self-imposed, additional 2% room tax instituted on resort hotels in 2010.
It’s the same pot of money that’s the subject of a scathing state audit released last January that led Anaheim City Council members to institute new oversight measures on Visit Anaheim, the city’s tourism bureau.
In their report, auditors concluded Visit Anaheim improperly gave $6 million of those public dollars over a span of a decade to the Anaheim Chamber of Commerce which then used it to lobby elected officials and support political campaigns.
On Tuesday, Anaheim City Council members – a majority of whom had their campaigns heavily backed by Disney – voted unanimously to notify the public and hoteliers in the resort district their intent to use 9% of the annual tourism tax dollars towards supporting workforce housing.
City Councilwoman Norma Campos Kurtz, who called for the changes, said hoteliers came to them more than two years ago to ask how they could support their workers.
“I want to thank the hoteliers who came literally more than two years ago and said, ‘how do we do something more for our employees, for the people that work for us?’,” she said at the Tuesday meeting.
“They’ve been relentless.”
City staff said the proposal could come back late October for another public discussion, followed up by a proposed ordinance in November.
In the summer of 2023, hotel workers across Orange County including Anaheim kicked off waves of rotating strikes to demand pay increases as workers struggled to afford rent amid rising housing costs.
Almost a year later, employees secured a $5 pay raise after months on the picket line.
Those strikes ended roughly a month after questions started to pop up in the wake of the state audit on whether the tourism tax dollars could be spent on other things like housing.
At a council meeting in February 2024, Deputy City Manager Greg Garcia said that’s up to hoteliers because they’re the ones that imposed the 2% hotel tax on their resort hotels.
“It requires the approval of all the hoteliers, they put this private assessment on themselves,” Garcia said at the time. “Any change to that would require their approval to do so.”
Visit Anaheim gets 75% of that money and is supposed to secure bookings at the city-owned convention center and boost hotel stays through advertising. The other 25% is placed in a separate fund allocated for transportation needs in the resort area.
Councilwoman Natalie Meeks said it was groundbreaking to have the hoteliers step up and support housing for resort workers.
“To have a segment of our business community come forward and say we are taking our self assessment and not using it for self marketing. We are going to use it for housing, to serve our employees and take on some of that burden is unheard of,” Meeks said at Tuesday’s meeting.
Councilman Ryan Balius also praised the move.
“This funding is going to truly help many of the hard working people who help make Anaheim a great place to visit,” he said. “We know there’s a real challenge when it comes to affordable housing.”
Council members were also supposed to discuss putting a measure on a future ballot to place a gate tax on the Disneyland theme park and other large entertainment venues as officials have scrambled with rocky budgets.
[Read: Anaheim Delays Disneyland Gate Tax Proposal]
Meanwhile, Anaheim officials in the past six years have struggled to boost their affordable housing stock in a city where about half of residents are on the county’s public health plan.
Between 2018-2024, nearly 5,600 homes were built in Anaheim – of which about 90% were for above moderate income families, nearly 5% were for very low income families, nearly 3% for moderate income families and about 2% for low income families, according to a state database.
Orange County’s median income for a four-person household is close to $128,000, roughly $13,000 above what’s considered low income, according to the California Department of Housing and Community Development.
A four-person household making less than $72,000 a year is considered very low income.
Tourists Could Help Pay for Housing
Under the proposed changes, 9% of the tourism tax dollars collected could go towards a first-time homeowners program to help local workers put a down payment on their first home, rent assistance and towards building affordable homes for employees, according to a staff report.
City staff said 9% of the $32 million in tourism tax collected each year equals roughly $3 million.
City Councilwoman Natalie Rubalcava said she would like to see a majority of the money go towards a first-time homeowners program.
“First time home buyer programs are probably one of the most important investments that we can make in our community, especially within the lower income communities,” she said.
“When we’re throwing money at people who are renting, that is a bottomless hole,” Rubalcava added. “The best pathway out of poverty is homeownership.”
A five-person committee is expected to decide how that money will be spent every year and is slated to consist of a representative picked by the city manager, the biggest contributor to the improvement district and three hoteliers – including a small hotel owner.
The proposed changes will also expand the Anaheim Tourism Improvement District to include The Viv Hotel on Anaheim Boulevard and any new hotels built along that road near the 5 freeway and the Ball Road intersection.
The proposed amendment will make new timeshare units built in the area be subject to the tax as well.
In letters to the city council, local housing advocates like the Kennedy Commission and Orange County Congregation Community Organization supported the initiative, but also called on officials to use the funding specifically to support housing for low and very low income resort workers.
They also said expansion of the tourism district boundaries shouldn’t displace or fracture the communities already living there.
Marisol Ramirez, co-interim director of Orange County Communities Organized For Responsible Development, also raised concerns in a Tuesday letter to the city council about who will sit on the housing committee and called on the board to include a resort area worker.
She also called for public reporting on how the money is spent, prioritizing spending on the poorest of residents and preventing people from being displaced.
“OCCORD supports the City’s leadership in aligning economic development with housing justice, and we believe the proposed modifications can be strengthened by embedding worker and community representation, prioritizing affordability for the lowest-income families, and implementing strong accountability measures,” she wrote.
Trying to Boost Affordable Housing in Anaheim
The allocation for workforce housing comes as Anaheim officials look for ways to boost the city’s affordable housing stock in recent years.
Amid a seemingly shifting dynamic between city officials and Disneyland resort interests, elected leaders are beginning to lean more on the entertainment juggernaut and surrounding businesses to help with that endeavor.
[Read: Anaheim Leans on Disneyland Resort Interests to Boost Affordable Housing]
In May, Anaheim officials approved allocating millions of dollars towards a first-time homeowner buyer program, an eviction protection program and an initiative to create more affordable homes.
Most of the money to kick start those programs came from Disney as part of an agreement approved last year to expand their iconic theme park.
As part of the expansion agreement, Disney executives agreed to give the city $30 million that would go to a housing trust and be used for affordable homes.
It was then that Rubalcava asked Disneyland Resort President Ken Potrock if they would be willing to direct a portion of tourism dollars to support housing resort workers.
Potrock publicly said at the time they had to discuss the idea with resort businesses and called it a wonderful solution to bring a sustainable revenue stream to fund affordable housing.
Months after the expansion was approved, Anaheim City Council members voted to launch their housing trust to help fund programs like eviction protection assistance, down payment assistance for homebuyers and gap financing for affordable homes
They also went on to approve a mandate last year that requires developers in Anaheim to build affordable homes in certain residential projects or pay a fee – an ordinance that officials had long resisted implementing in a city where about half of residents are renters.
The changes to the Anaheim Tourism Improvement District, if approved, will go into effect next February.
Hosam Elattar is a Voice of OC reporter. Contact him at helattar@voiceofoc.org or on Twitter @ElattarHosam.