Since its grand opening on July 17, 1955, Disneyland has transformed Anaheim, California, from a quiet agricultural town into a bustling hub of tourism and economic activity. Often dubbed “The Happiest Place on Earth,” Disneyland’s influence extends far beyond its magical gates, significantly shaping the city’s real estate market. This blog post delves into how Disneyland has impacted Anaheim’s real estate prices, exploring both the opportunities and challenges it presents for homeowners, investors, and residents.
A Catalyst for Economic Growth
Disneyland’s arrival marked a turning point for Anaheim. Before 1955, the city was primarily known for its orange groves and modest residential communities. Walt Disney’s vision to create a family-friendly theme park changed the trajectory of the city, drawing millions of visitors annually and spurring economic development. According to a 2019 study by Cal State Fullerton’s Woods Center for Economic Analysis and Forecasting, Disneyland Resort generates approximately $8.5 billion in economic impact for the region, supporting over 78,000 jobs and contributing nearly $510 million in annual state and local tax revenue, with $162 million going directly to Anaheim’s general fund.
This economic engine has fueled demand for real estate in Anaheim, particularly in the Anaheim Resort District, which encompasses Disneyland, Disney California Adventure, and surrounding hotels, shops, and restaurants. The tourism industry, driven by Disneyland, accounts for 50% to 60% of Anaheim’s annual tax revenue through occupancy, sales, and property taxes. This influx of revenue has enabled infrastructure improvements, such as the Anaheim Convention Center and luxury hotels, further enhancing the city’s appeal to visitors and residents alike.
Rising Property Values
The presence of Disneyland has undeniably driven up property values in Anaheim. According to Redfin, the average home price in the Disneyland area of Anaheim was $711,000 as of January 2023, reflecting a 7.7% increase from the previous year. By 2023, the median home price in Anaheim had climbed to $802,500, compared to the California state median of $743,200. This appreciation is particularly pronounced in neighborhoods close to the resort, such as those in West Anaheim and the Anaheim Resort District, where proximity to Disneyland is a significant selling point.
Homes marketed with features like views of Disney’s nightly fireworks or proximity to the park often command premium prices. For example, a listing on Redfin highlighted a property at 1313 S Petal Place, described as a “rare find” due to its location near Disneyland and its large lot size, ideal for buyers seeking proximity to the resort’s attractions. The competitive nature of the market is evident, with homes selling for about 1% above list price on average and hot properties going pending in as little as 19 days.
The Disneyland Resort District’s economic output, generating $190.35 million in tax revenue per square mile compared to $3.53 million for the rest of the city, underscores its role as a real estate hotspot. Investors and developers have capitalized on this, building luxury hotels, condominiums, and gated communities like 100 West by Toll Brothers, which cater to buyers seeking modern amenities near the resort.
Tourism and Short-Term Rentals
Disneyland’s draw of over 25 million visitors annually has created a robust market for short-term rentals, such as Airbnb and Vrbo properties, particularly in the Anaheim Resort District. This demand has increased property values for homes and condos that can be converted into vacation rentals, as investors seek to capitalize on the steady stream of tourists. However, this trend has also reduced the supply of long-term rental housing, contributing to higher rental prices. The average apartment rent in Anaheim is $2,307 for an 847-square-foot unit, significantly above the national average.
The rise of short-term rentals has sparked concerns among residents, as it exacerbates housing affordability issues. With 46.5% of Anaheim residents owning their homes, the competitive rental market makes it challenging for renters, particularly low-wage workers, to find affordable housing. This dynamic highlights a downside of Disneyland’s influence: while it boosts property values, it can strain affordability for those not directly benefiting from tourism-related income.
DisneylandForward and Future Impacts
In May 2024, the Anaheim City Council unanimously approved DisneylandForward, a $1.9 billion expansion plan to redevelop existing areas of the resort over the next decade. This project aims to add new attractions, shops, and restaurants without expanding the park’s footprint, promising significant economic benefits. According to an analysis by Cal State Fullerton, every $1 billion Disney invests in the resort generates $253 million annually in economic output, $15 million in tax revenue, and 2,292 jobs.
The expansion is expected to further drive real estate demand in Anaheim. Disney’s commitment to invest $85 million in traffic improvements, $30 million in affordable housing, and $8 million in park enhancements signals efforts to mitigate growth-related challenges. However, critics argue that the privatization of public streets like Magic Way and the creation of low-wage jobs could exacerbate traffic congestion and housing affordability issues.
The promise of new attractions, such as an Avatar-themed experience, is likely to increase tourism, further boosting demand for nearby properties. Real estate investors may see opportunities in developing or renovating properties to cater to this influx, but residents worry about rising costs and quality-of-life impacts, such as noise and traffic. An environmental impact report for DisneylandForward addressed these concerns, proposing measures like 12-foot noise barriers and enhanced architectural designs to minimize effects on adjacent neighborhoods.
Challenges: Housing Affordability and Low-Wage Jobs
While Disneyland has elevated Anaheim’s real estate market, it has also contributed to affordability challenges. The median home price in Anaheim, which was over $600,000 in 2007, is now more than three times the national average. This price surge is partly due to the city’s tourism-driven economy, which creates a high demand for housing near the resort but also generates many low-wage jobs. Disneyland employs approximately 28,000 workers, making it Orange County’s largest employer, but many of these jobs offer wages that struggle to keep pace with the city’s cost of living.
In 2007, Disney faced criticism for opposing a plan to build 1,500 apartments, including 225 subsidized units, on a site zoned for tourism, highlighting tensions between the company’s interests and the need for affordable housing. Residents and advocates, like former council candidate Arturo Ferreras, have called for policies to ensure tourism revenue benefits the broader community, such as a proposed $1 ticket tax that could fund local services.
The high cost of living has forced many Disneyland employees to live outside Anaheim, in cities like Orange, Santa Ana, or Fullerton, or to share apartments with multiple roommates. City Councilwoman Natalie Rubalcava emphasized the need for Disney to contribute more to affordable housing, noting that the 13,000 new jobs expected from DisneylandForward are likely to be low-wage.
A Double-Edged Sword
Disneyland’s impact on Anaheim’s real estate prices is a double-edged sword. On one hand, it has transformed the city into a desirable destination, driving property value appreciation and attracting investors. Neighborhoods near the resort benefit from high demand, and the city’s tax revenue supports infrastructure and services that enhance its appeal. On the other hand, the influx of tourism and short-term rentals has strained housing affordability, particularly for low-income residents and Disneyland employees.
The DisneylandForward expansion is poised to amplify these dynamics, promising economic growth but also raising concerns about traffic, noise, and housing costs. Disney’s investments in community benefits, such as affordable housing and traffic improvements, aim to address these issues, but their effectiveness remains to be seen.
Conclusion
Disneyland has been a defining force in shaping Anaheim’s real estate market, turning the city into a vibrant hub with some of the most competitive housing prices in California. While it has created wealth and opportunities for homeowners and investors, it has also highlighted the need for balanced growth that prioritizes affordability and quality of life for all residents. As Anaheim navigates the next chapter with DisneylandForward, the city and Disney must work together to ensure that the magic of the resort benefits the entire community, not just those who can afford to live in its shadow.
For those considering buying or investing in Anaheim, the proximity to Disneyland remains a unique selling point, but it’s crucial to weigh the benefits against the challenges of a competitive market and rising costs. Whether you’re drawn by the fireworks or the investment potential, Anaheim’s real estate market is as dynamic as the theme park that defines it.
