Why might a profitable motel shut down if the land it is located on becomes valuable due to surrounding economic development? 

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There are several reasons why such a motel might shut down. One reason is that the cost of operating the motel might go up in this scenario. As economic development grows in the area, the land the hotel is on would probably become more valuable. Assuming the proprietor owns the property, his or her property taxes would rise, perhaps to the point where profitability is affected. Depending on the kind of economic development that is taking place, other investors might want the property, either because they don't want a motel (usually not associated with high-end businesses) next to their businesses or because they think buying the land the motel is built on is a good investment. This process, where businesses and housing catering to (or owned by) people with lower incomes are forced out by rising costs associated with economic development is known as gentrification.

Perhaps the economic development is industrial in nature, and in this case, zoning issues might cause ownership of the motel...

(The entire section contains 3 answers and 603 words.)

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