Anaheim’s tourism district is looking to contribute toward funding affordable housing in town — about $3 million in the first year — and councilmembers this week welcomed the proposal.
The City Council voted unanimously Tuesday to begin a months-long process to make changes to the tourism district, created in 2010, that would direct a portion of its revenue into a separate account within the city’s housing trust fund. But councilmembers also agreed to give a new committee — to be created to oversee that account — final say over how the money is spent.
The tourism district includes 93 hotels that agreed to collect a 2% surcharge on each night’s stay to fund tourism promotion and transportation improvements. Its members say they want to also start using some of the money to help employees in the local hospitality industry who struggle to afford to live in the city where they work.
The proposal would direct a portion of the tourism district’s annual revenue toward workforce housing. According to city staff, 9% of the district’s annual assessments — which currently would equal about $3 million — would be set aside to support affordable housing programs for hospitality workers.
Under the plan, the new five-person housing committee would decide how the money is divided among first-time homebuyer programs, housing stability programs, such as emergency rent assistance, and affordable housing construction. The committee would include hoteliers, at least one representing a small hotel with fewer than 300 rooms, and a city representative.
Who decides where the money goes
Originally, the housing committee was meant only to “provide advice and recommendations” to the city manager and council on how to use the funds, but Councilmember Norma Campos Kurtz proposed giving the committee final say over spending, which her colleagues ultimately approved.
“Those hoteliers know their employees, they know their workforce, they know what their workforce needs,” said Kurtz, whose council district includes the resort area. “If they see money going to one program, but they see a growing need in another, they can quickly make changes.”
But some on the dais, including Councilmember Carlos Leon, questioned whether shifting the decision-making authority to the housing committee could conflict with state audit requirements, since tourism district funds are still considered a form of public money. A recent report from the California State Auditor said the city should have monitored the money from the resort district’s hotel room fee more closely, noting that some of it was used for political purposes.
“Are we comfortable that we’re not going against any state auditor recommendation, mindful that this is a self-imposed assessment, but they are also public funds?” Leon asked.
The city attorney said the arrangement is “within the confines” of what the city is allowed to do, and Assistant City Manager Greg Garcia added that the council would maintain an oversight role, including receiving annual reports on how the tourism district’s funds are spent.
Asked whether the city might be giving too much authority to a yet-to-be-formed committee, city spokesperson Mike Lyster said the committee would be governed by rules set by the City Council and written into the municipal code.
He explained that the city’s housing trust fund currently provides three types of assistance: building affordable communities, down payment help for first-time homebuyers and emergency grants for residents facing eviction or homelessness.
The committee would be “governed by the rules that the council ultimately would adopt, and they wouldn’t have the ability to really go beyond those buckets,” Lyster said. The rules would spell out how the money is spent and who is eligible to apply for funding, he added.
Residents can expect specific rules to be included in the ordinance the council will review in November.
Additionally, Lyster said the tourism district funds alone wouldn’t be enough to build an entire affordable housing community, but they could help a project reach completion. He compared it to the contribution to the housing trust made by the Walt Disney Co., which he said the city hopes to use to fill funding gaps in larger projects that have already received city, state or federal support.
“I think what would happen is we would actually bring them projects, and then their board would evaluate and then give a recommendation on what they think may be in their best interest to fund,” he said.
Kurtz said the idea to direct some tourism district revenue toward affordable housing programs for hospitality workers came out of challenges hotel operators were seeing among their staff.
“Everything from, ‘We’re losing people because they can’t afford something here in Anaheim’ to those that said, ‘My gosh I just had an employee who needs some help who has to choose between fixing their car and paying their rent,’” she said.
That conversation among hoteliers “started more than two years ago, and they’ve been relentless,” she added.
If approved, the money would go into a subaccount of Anaheim’s housing trust fund, which launched recently with $15 million from Disney — the initial payment of a $30 million community benefit included in the city’s approval of the theme parks’ DisneylandForward development project — and $1 million in federal funding the city had.
The tourism district’s revenue for 2025 is projected at $32 million, with 75% going to tourism marketing and 25% to transportation. While these percentages won’t change, the actual dollar amounts for marketing and transportation will adjust as some funding is redirected to workforce housing, according to the city.
Garcia said the district’s boundaries would also be updated to include the new Viv Hotel and any future hotels along a developing section of Anaheim Boulevard.
Tuesday’s council vote starts a review process set to run through December. During that time, hotels in the district will vote on the proposed changes, and if a majority — weighted by their ATID contributions — approve, the process will move forward. Lyster said the results of the vote are expected to be announced at the formal public hearing on Nov. 18.
Paul Sanford, CEO of Wincome Hospitality, which owns two resort-area hotels, urged the council to prioritize using most of the funds on helping workers buy homes rather than for rental assistance.
“We have the opportunity to make a difference in our workers’ lives. Generational wealth is usually started through home ownership,” he said.
Councilmember Natalie Rubalcava echoed that point.
“When we’re throwing money at people who are renting, that is a bottomless hole, it’s not really assisting them in getting out of debt, it’s just furthering the problem more,” she said. “I think somebody said this earlier, ‘The best pathway out of poverty is homeownership.’ So that is something I hope the committee takes into consideration, is the majority of that should go to first-time homebuyers.”
The proposal also calls for including new timeshares in the tourism district. Councilmembers stressed that residential areas, including the mobile home parks west of Anaheim Boulevard, would not be included in the expansion.
“Staff was very careful to only include commercial zones. There’s been some fear among the mobile home residents that we were trying to take their land away, we are not,” Kurtz said.
A public meeting for comments and questions is scheduled for Oct. 28, with a formal public hearing set for Nov. 18. The council is expected to hold a second vote on Dec. 9, and if approved, the first workforce housing funds could be allocated starting in February.