Sudden intense algae blooms are often a sign of nitrogen run off used as a fertilizer from farmers. When the algae dies off bacteria attack it and use up all the oxygen in the water. This causes fish to die. The condition is known as hypoxia.
An interesting question! It is true that blooms of algae can cause decay later and use up oxygen in the water. But that only happens if there is no flow, either of the water on the surface containing algae or the middle waters containing decay organisms. In nature, flow is usually present in some form. It sounds like some sewage is flowing into this environment from people’s houses and businesses. It is also necessary that the water flow away.
In regards to algae, one bad kind of algae can grow in blooms like this, and later poison shellfish that eat it. (And then, the people who eat the shellfish). It is the variety called dinoflagellates. They are unicellular, and some people consider them as animals, rather than plants, because they move around and possess a kind of eye. But they are truly algae, and are the organism responsible for red tides. They tend to grow in fresh waters, but not just there.
So, what does all this mean? Well, if the algae remain there all the time, maybe there are more nutrients available than there were before. It may mean that the waters will not be as clear all the time, or just some of the time. The algae may be poisonous or not, and decay of algae may cause suffocation of fish, or not. It may even be a food that attracts other fish.
On a beach where people swim, algae will be an annoyance, for sure. But they will not harm people directly - unless they are varieties which cause people to get itchy! That is another effect that some species of algae can have.
Anyways, we the people have to understand that if we put sewage freely into the water, it doesn’t just “go away”. We may expect effects from our actions, and more algae may be one of the effects.