The rise of beach McMansions in New Jersey, Florida

Large homes are not just for suburban locations. Two recent pieces highlighted their role in changing beach communities. First, from New Jersey:

Decades ago, when I was a teenager, I rented a surf shack in the then-humble town of Beach Haven on the New Jersey shore. Four of us crammed into a squat cinder-block hut tucked behind a bungalow. We worked as lifeguards for $2.50 an hour. Still, our rent was only $187.50 each for the summer. We had a place to sleep, shower, and create memories. We didn’t need more…

But there is another less visible cost that rarely gets mentioned when Americans talk about coastal development and risks. Since the modern coast emerged after the Second World War, a series of land bubbles have wildly inflated land values, to the point that many ordinary families can no longer afford to live at the coast, or even afford a weekly summer rental. On Long Beach Island, a popular resort in Ocean County, where I worked as a lifeguard, $15 billion worth of property now crowds a narrow, 18-mile-long shoreline. The average price of a new home is about $1.1 million, with many costing millions more. Rentals run as high as $5,000 a week. Yet, paradoxically, the island was conceived by Morris Shapiro and other developers as an enclave for middle-class and blue-collar families – teachers, plumbers, electricians, and so forth…

I suppose it is unsurprising there are few, if any, surf shacks left. Most beach towns have been supersized. But unanticipated costs have come with that growth. High school and college students have few places to live and the labor pool for lifeguards, waitresses, hotel workers, amusement-ride operators, and so on has shrunk dramatically. Many shore towns now rely on a special federal visa program to supply summer help. Workers come from Eastern Europe, Ireland, even Australia. Even so, some businesses have been forced to cut hours or even close.

The change over multiple decades is drastic.

And from the Gulf Coast of Florida:

Anna Maria Island may be largely built-out, but that hasn’t stopped developers from buying older existing homes, tearing them down and replacing them with new high-end homes…

Officials in the cities of Anna Maria, Holmes Beach and Bradenton Beach say it is a worrisome long-term trend and that they are doing their best to maintain the island’s unique character and sense of place…

Stephen Gilbert, building official for the city of Bradenton Beach, said the land is often much more valuable than the existing older home that sits on the lot.

Of the new homes built in the last decade in Bradenton Beach, only a couple were intended as homes for the owners. The others were intended as investments to be quickly turned over for more cash, he said.

While the change here has come more recently, it sounds like a similar process: people with money and/or an interest in investments come in, tear down older homes, and construct beach McMansions. This has happens over a sustained period of time and the feel of neighborhoods and communities changes.

These changes certainly have local effects on hundreds of beach communities across the United States but there are larger processes at work. Are the big homes the cause or the symptom of bigger issues? The nature of real estate capital today plus the rapid rise in real estate values puts even small communities at the mercy of global markets. Communities can respond but turning down big amounts of new money is not easy and often requires significant opposition from local residents and leaders.

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