ANAHEIM, Calif. -- Ten years after moving into a quiet Anaheim neighborhood to raise his five boys, Fred Cornejo is thinking about leaving.
Because of the Disneyland resort in this Los Angeles-area city, seven nearby houses -- including the house across the street -- have been converted recently to short-term rentals, booked through online sites such as Airbnb, VRBO and HomeAway.
Some have bunk beds and converted garages to pack in large groups. Late-night parties, loud music and traffic are routine on his tree-lined block.
"It's totally destroying the neighborhood," Cornejo said.
Anaheim thrives on tourism. But now city officials must respond to frustrated homeowners while trying to oblige rental owners -- a new tax source -- who host visitors to Anaheim's biggest tax-generator and employer: Disneyland.
"We are trying to strike a balance," city spokesman Ruth Ruiz said.
The Anaheim City Council adopted a moratorium on short-term rental permits this fall to give its staff time to research new regulations.
Tourist-heavy towns such as Santa Monica, Los Angeles and San Francisco are grappling with similar issues. San Francisco voters recently rejected a ballot measure to impose tough restrictions on short-term rentals.
In Anaheim, short-term rentals raise new problems for a city that long tried to maintain a peaceful coexistence between residents and the theme park.
By the time Anaheim adopted its temporary moratorium in September, it already had approved 221 permits for short-term rentals and was in the process of reviewing 182 additional applications. Although Anaheim is home to 150 hotels with nearly 20,000 rooms, the city was receiving five to 10 applications a week to operate new rentals.
"It's a hot industry," said Charlie Ryan, head of sales for Pillow, a San Francisco vacation rental management company. "There are a lot of people trying to make money off of it."
Compared with other nearby tourist hubs, Anaheim has a particularly dense concentration of short-term rentals in a small area near Disneyland.
Residents say family neighborhoods are teeming with tourists crowding the curbs with parked cars. On a few blocks, short-term rentals nearly outnumber owner-occupied homes.
In the Sherwood Village townhouse development, about a block from the Anaheim Convention Center and less than 2 miles from Disneyland, 50 of the 221 units have city permits to operate as short-term rentals, according to city data.
The surge in applications to operate short-term rentals in Anaheim began soon after the city adopted rental regulations in 2014.
A short-term rental in Anaheim must pay an annual $250 registration fee and a 15 percent room tax, which generates $200,000 to $300,000 a month for the city government, officials said.
Anaheim's regulations don't restrict the number of rentals allowed in a designated area or limit the number of days a home may be rented each month.
In the Los Angeles-area cities of Hermosa Beach, Huntington Beach and Dana Point, short-term rentals aren't allowed in residential areas.
In Cambria, about halfway between Los Angeles and San Francisco, short-term rentals can't open within 200 feet of an existing short-term rental. In San Francisco, a property owner who doesn't live in a home can rent it out for a maximum of 90 days a year.
Anaheim is now considering whether to adopt similar restrictions.
But if Anaheim rules become too onerous, the city could drive the short-term rental market underground and lose out on its tax revenue, property managers say.
Matt Curtis, a spokesman for the online booking site HomeAway, gave the example of Palm Desert, about 120 miles east of Los Angeles.
The popular retreat for "snowbirds" imposed tough regulations for short-term rentals, requiring a temporary-use permit and a $500 annual fee, plus a 9 percent transient occupancy tax.
But the city's planning staff determined through an online search that several hundred short-term rentals were operating without permits. In 2012, the city relaxed its rules, charging instead a $25 annual fee plus the transient occupancy tax.
"The market demand is so strong that people will find a way to do it, one way or another," Curtis said.
For homeowners, strong demand means big profits.
In Hermosa Beach, a two-bedroom home can generate an average of $6,530 a month, according to Pillow.
Business on 11/20/2015