Red Tide, the first half of American Horror Story's season 10 Double Feature, is set in the vacation town of Provincetown, Massachusetts. Also known as "P-Town" by locals, the town becomes home to the screenwriter Harry Gardner and his family as he takes up a winter residence to search for inspiration. The town immediately has a spooky feel to it, with Harry joking that "every house in Provincetown is haunted" by "ghosts of old whalers." The real history of Provincetown suggests why series creator Ryan Murphy may have been drawn to it as a setting, presenting it as a town with plenty of its own ghosts.
Provincetown was one of the earliest European settlements in North America. As noted in the series, the Pilgrims aboard the Mayflower landed there before Plymouth Rock, signing the Mayflower Compact to found their new colony. Like Roanoke, another American Horror Story setting, Provincetown is thus associated with colonialism and all of the violence and racism that came with it. Red Tide certainly wouldn't be the first horror story to use the terrors of American colonialism as a source for supernatural hauntings.
As Harry suggests, Provincetown was also a major part of the whaling trade in the 19th century. The town was part of the Cape Cod area that was a whaling hub, and even today hosts an annual Moby Dick marathon in honor of that history. The Portland Gale in 1898 destroyed much of the town's whaling and fishing industry. This natural disaster, or the frequent killing of intelligent animals for their fat, could be the kind of tragedy that also leads to haunting.
Red Tide's black pills plot suggests that Provincetown is full of writers and creators, and this is also true in reality. Many famous writers have spent time in Provincetown such as playwrights Eugene O'Neill and Tennesse Williams, novelists Kurt Vonnegut and Michael Cunningham, and director and queer icon John Waters. Murphy himself is a sometimes resident of P-town. So it's not unrealistic that Harry would run into other successful writers there, and this wealth of imaginative people could easily perceive the town as having something spectral about it.
Provincetown has also been home to its fair share of ghost stories and spooky occurrences. The town's Crowne Point Inn has long had stories of ghostly and disturbing happenings, like the Cecil Hotel used in American Horror Story as the setting of a previous season. These include the appearance of a ghostly figure in a trench coat who looks like a sea captain. Other Provincetown ghost stories include tales of a ghostly choir, a family of slaves, and images of Rosalia Bangs, who died being struck by lightning during the construction of the Pilgrim Monument
American Horror Story: Red Tide has so far avoided becoming another ghost story, instead featuring black pills that turn the users into vampire-like creatures. Given the outlandish plotting that the franchise is known for, ghosts could still be a factor, but there's no sign of it so far. But even without actual ghosts, the history of Provincetown provides a haunted atmosphere that explains why it is the location for this half-season of American Horror Story.