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Additional Costs Cause Demand to Decrease

I understand. When homeowners continuously get hit with increases in fees, taxes, penalties, and other costs, they begin to rethink their investments. Are the costs worth the investment? Hike the water bill; hike the trash bill; raise the insurance rates; raise residential parking fees; raise state, county, and local taxes. There are surely other fees, fines, and penalties that are not mentioned here. But the point is they all add to the total cost of living in a beach area (or any area for that matter).

Will an 8-20% insurance rate increase create a desolate beach area? It probably won’t. However, renters and renting agencies will have to increase their rates to ensure revenues exceed costs. This means consumers (mostly tourists) will have to pay more.

On the other hand, is that so bad for locals? If tourists have to pay more, that means less tourists; right? Is that what we’re trying to achieve?

I once lived at the beach, and I know tourists can be annoying. If one more person parked in my yard, I was certain to break out my BB gun. But I realized we need those tourist dollars to fuel the local economy. So, we have to decide if the beaches are going to be exclusive to home owners or if they will be catering to tourist needs (demands).

There was once a small desert community that decided where the focus should be. But the name of that little town escapes me. I can’t recall if it was that successful. Their insurance rates probably crippled their economy. Oh yeah…Las Vegas! They managed to integrate high-end living with a tourist economy. So, what’s going on here?

Should the beaches be exclusive to the residents? Or should the focus be on tourism? The equilibrium point is so elusive!

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