Authorities say women travel from China and other countries on tourist visas to give birth in the United States.
"Now they've given birth to an American citizen who in 17 or 18 years is going to be back here using our UC system and everything else they can use, and I think it's wrong," said Arcadia resident Linda Dalli.
Police say so-called birth tourism is not illegal. But responding to public concern, Arcadia is hiring a detective to investigate the operations.
"At this point, we're not sure exactly how extensive the problem is, and that's the reason why we've assigned a detective to focus his efforts on this particular problem as far as quality of life issues in Arcadia," said Capt. Larry Goodman with the Arcadia Police Department.
City Manager Jason Kruckeberg said officials are focusing on local land use issues such as zoning, building and safety issues.
Maternity homes are operating in other Southern California communities. One Chinese website offers packages ranging from $5,000 to $15,000 for pregnant women to stay at a home in Chino Hills.
"They try to legalize their kids or their relatives later to come to the United States. I mean, that's not fair to the legal immigrants," said Arcadia resident Spencer Su.
Authorities said they are investigating at least a dozen maternity home operations.