Beach front property is NOT "local" housing.  People who can afford to rent such property can easily buy it as well. 

It will be rented out because for owners of vacation housing, many will continue to live there or depend on that income for their living expenses. So they cannot rent to "local" renters. 

The free market is saying to the state and the City to subsidize local residential housing on less expensive land.

Don't believe hotel and union propaganda.