How Tourism Is Squeezing Rural Coastal Communities

For generations, small towns along America’s coastline have been shaped by fishing, farming, and the quiet rhythms of tight-knit community life. But as these places gain popularity with vacationers, remote workers, and real estate investors, a familiar and painful pattern is emerging: the very people who keep these communities running can no longer afford to live in them.

It often begins gradually. A charming downtown catches the eye of a travel magazine. Vacation rental platforms make it easy for homeowners to list a spare cottage. Property values tick upward, and outside buyers — drawn by scenic beauty and relative affordability compared to urban markets — begin purchasing homes as second residences or short-term rentals. What was once a $150,000 starter home becomes a $400,000 investment property, and the local housing market transforms almost overnight.

As demand from wealthier outsiders floods in, the available inventory of year-round rental housing shrinks. Landlords discover they can earn far more listing a property on a vacation platform for a few peak-season weeks than they can renting to a local family for an entire year. Long-term rental units quietly disappear from the market, and those that remain command prices that bear no relationship to local wages.

The consequences fall hardest on the workers a community cannot function without. Teachers, EMTs, county clerks, sheriff’s deputies, hospitality staff — these are the people who form the backbone of daily life in a small coastal town. Yet their salaries, often set by public-sector pay scales or the modest revenues of small businesses, have not kept pace with a housing market now driven by outside wealth.

A public school teacher earning $42,000 a year cannot compete with a buyer offering cash for a beachside bungalow. A county government worker making $35,000 faces the choice of a grueling commute from across the bay or doubling up with roommates well into middle age. Some leave entirely, taking institutional knowledge and community ties with them.

The ripple effects are significant. Schools struggle to recruit and retain staff. Local government offices face chronic vacancies. Small businesses that serve year-round residents — the mechanic, the dentist, the daycare center — lose their customer base and, eventually, their workforce. The community hollows out, becoming a place that functions during tourist season but falls quiet and understaffed the rest of the year.

The problem is self-reinforcing. As housing costs rise, more homeowners are tempted to sell to outside buyers at premium prices, further reducing the stock of affordable housing. Local governments, strapped for revenue and staff, struggle to implement the regulatory tools — short-term rental caps, inclusionary zoning, workforce housing programs — that might slow the trend. Meanwhile, the influx of tourism dollars can mask the underlying erosion, making it appear as though the local economy is thriving even as its permanent population declines.

Property tax increases tied to soaring assessments add another layer of strain. Longtime residents on fixed incomes — retirees, in particular — may find themselves taxed out of homes their families have owned for decades, forced to sell into the very market that displaced their neighbors.

For locals, there is a recognition that a community is more than its real estate values. A town where teachers, firefighters, and grocery store workers cannot afford to live is a town in danger of losing its identity — and, eventually, its ability to function at all. For rural coastal communities caught in this squeeze, the question is whether they can act quickly enough to preserve what made them worth visiting in the first place: not just the views, but the people.

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Wayne Creed

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