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Posted in Featured, HISTORY, Living Well with tags , , , , , , , on January 18, 2017 by katrinafilm

We hope you leave us with great memories of your visit.

Regardless of whether you live in Faubourg St. John or are a visitor,  everyone is glad you are here. Faubourg St. John has one of the best reputations in New Orleans as a community that cares.

vincamajorFaubourg St. John loves visitors. In Faubourg St. John, you get a unique, extraordinary experience. Faubourg St. John gives visitors an authentic, high-quality New Orlean experience that you will remember for a long time.

Jazz Fest, Bayou Boogaloo, and the Voodoo Experience are premier festivals that draw people from around the world because of the great fun the festivals provide. Bayou St. John is a beautiful inland waterway where you can rent a kayak to explore yourself or get a kayak tour and learn lots of great things about New Orleans.

Fortier Park, located in the 3200 block of Esplanade, offers natural beauty and modern art in a restful space. The park was redeveloped and is maintained by Faubourg St. John residents.

Fortier Park is just across from Faubourg St. Johns central business district where you can visit with local people running local businesses. Top rated restaurants, a day spa, a coffee shop and two great local grocery stores are all waiting for you to experience.

Take a short bike ride down Esplanade to Broad and Bayou Road and you’ll find even more unique shops and great local folks waiting to serve you.

City Park is a short walk from Faubourg St. John where you’ll find the New Orleans Museum of Art, Morning Call (coffee and beignets!), Storyland (rides and fun for the kids), and City Putt (minature golf for all ages). City Park is one of the largest urban parks in America.

On your way to City Park, on Esplanade Avenue, stop by St. Louis Cemetary #3 where you can see the beautiful above-ground tombs.

bayoustjohn-magnoliabridge-1937PITOT HOUSEFaubourg St. John is also home to the Pitot House at 1440 Moss Street. It’s where the first mayor of incorporated New Orleans lived. It’s nestled along Bayou St. John and across from the Magnolia Bridge.

Faubourg St. John is just a mile from the world famous French Quarter with bus and streetcar service to interesting places all around New Orleans.

Information below courtesy Rachel Dangermond:

City Park and Bayou St. John
The intersection of Esplanade Ave. at Bayou St. John and City Park Ave. is one of the points of higher elevation in the city. Bayou Metairie flowed into Bayou St. John here. Bienville is supposed to have found the Indian village of Tchou-Tchouma in 1718 where the Esplanade Ave. bridge is now located. In the 18th and 19th centuries Bayou St. John provided an important second water route to the city. The mouth of the bayou at Lake Pontchartrain was protected by a fort built by the Spanish.

Ocean going vessels were able to travel as far as the present end of the bayou. From this point goods were carried to and from the city by portage during the 18th century along Bayou Road. In 1805, a canal was dug, following an earlier canal by Spanish governor Carondelet, which brought the ships to a turning basin just behind what is now the Municipal Auditorium at Basin St.

Statue of Pierre Gustave Toutant Beauregard
(May 28, 1818 – February 20, 1893) was a Louisiana-born American author, civil servant, politician, inventor, and the first prominent general for the Confederate States Army during the American Civil War. Beauregard was trained as a civil engineer at the United States Military Academy and served with distinction as an engineer in the Mexican-American War.

His arguably greatest achievement was saving the city of Petersburg, Virginia, and thus also the Confederate capital of Richmond, from assaults by overwhelmingly superior Union Army forces in June 1864. However, his influence over Confederate strategy was marred by his poor professional relationships with President Jefferson Davis and other senior generals and officials. In April 1865, Beauregard and his commander, General Joseph E. Johnston, convinced Davis and the remaining cabinet members that the war needed to end. Johnston surrendered most of the remaining armies of the Confederacy to Maj. Gen. William T. Sherman, including Beauregard and his men.

Following his military career, Beauregard served as a railroad executive and became one of the few wealthy Confederate veterans because of his role in promoting the Louisiana Lottery. Today he is commonly referred to as P.G.T. Beauregard, but during the war he rarely used his first name and signed correspondence as G.T. Beauregard. Nicknames were The Little Creole, The Little Napoleon, Bory, Felix

Place of birth: St. Bernard Parish, Louisiana ontreras” sugar-cane plantation in St. Bernard Parish, Louisiana, about 20 miles (32 km) outside New Orleans, to a white Creole family, the third child of Jacques Toutant-Beauregard and Helene Judith de Reggio Toutant-Beauregard. He had three brothers and three sisters. Beauregard attended New Orleans schools and then went to a “French school” in New York City. It was during his four years in New York, beginning at age 12 that he first learned to speak English. He trained at the United States Military Academy at West Point, New York. One of his instructors was Robert Anderson, who would later become the commander of Fort Sumter and surrender to Beauregard at the start of the Civil War.

In 1841, Beauregard married Marie Laure Villeré, the daughter of Jules Villeré, a sugar planter in Plaquemines Parish and a member of one of the most prominent Creole families in southern Louisiana.

Marie was a paternal granddaughter of Jacques Villeré, the second governor of Louisiana. The couple had three children: René, Henri, and Laure. Marie died in March 1850, while giving birth to Laure.

Ten years later, the widower Beauregard married Caroline Deslonde, the daughter of André Deslonde, a sugar planter from St. James Parish. Caroline was a sister-in-law of John
Slidell, a U.S. senator from Louisiana and later a Confederate diplomat. She died in Union-occupied New Orleans in March 1864. They had no children together.

On first meeting, most people were struck by [Beauregard’s] “foreign” appearance. His skin was smooth and olive-complexioned. His eyes, half-lidded, were dark, with a trace of Gallic melancholy about them.

His hair was black (though by 1860 he maintained this hue with dye). He was strikingly handsome and enjoyed the attentions of women, but probably not excessively or illicitly.
He sported a dark mustache and goatee, and he rather resembled Napoleon III, then ruler of France—although he often saw himself in the mold of the more celebrated Napoleon Bonaparte.

Place of death: New Orleans, Louisiana and was buried in the Tomb of the Army of Tennessee, Metairie Cemetery, New Orleans

City Park is a beautiful and well maintained urban park, the largest in the city and fifth largest municipal park in the United States and, at this writing, is reported to be one of the safest. In 1854, the first section of the park was acquired by the city. This tract of land, fronting on Bayou St. John and present City Park Ave., was part of the Allard Plantation. The first improvements to the park were made in the 1890’s. The park is laced with lagoons (the lagoons along City Park Ave. are part of old Bayou Metairie, seven miles of them which contain bass and bream), and trees typical of the region such as magnolias and live oaks
(the dueling oaks are named for the duels that were supposed to have taken place from 1804 to 1830).

The amusement park area has a fine old carousel dating from 1904. The Casino, dating from about 1914 is the center for information, rentals, and refreshments (coffee and beignets!) (domed band shell and Beaux Art style pavilion were built in the 30’s). The park has three 18-hole golf courses. Major restorations and all of the paving of roadways, construction of bridges, drainage and other improvements in a large area of the park were done under WPA in the late 30’s.

copy of the Pitot Housec. 1940
800 Moss Street
A modern Pitot House (see 1440 Moss Street) facsimile. One of the original Pitot House mantels still survives in the newer residence.

Louis Blanc Housec. 1798
924 Moss Street
Formerly the plantation and home Louis Antonio Blanc. The second story gallery has slender colonnettes and the French window, jalousies and steep roof are characteristic of
Louisiana colonial plantation houses; similar to Parlange and Homeplace Plantations elsewhere in the state.

Spanish Custom Housec. 1784
1300 Moss Street
A small-scale typical Louisiana Plantation hose. Various reasons have been given for the name of the so-called “Custom House” although there is no real tradition that it ever functioned in this manner. Probably built for Don Santiago Lloreins when the land formed part of his plantation.

Evariste Blanc House
(Holy Rosary Rectory)
c. 1834
1342 Moss Street
Some Greek Revival alterations have been made in this Bayou St. John plantation house, although evidence of an earlier style including slender colonnettes and round arched doors, is plainly visible.

Cabrini High School1964 – 1965
1400 Moss Street

Morel-Wisner House
c. 1850’s
1347 Moss Street
Mid-19th century, possibly constructed as a residence for the attorney Christoval Morel in the late 1840’s after he purchased a large tract of land on the Bayou St. John in 1847. The house served as New Orleans’ first Fencing Club in the 1880’s and one time as a rowing club. From
1935 until her death the house served as the home of Dr. Elizabeth Wisner, an original member of the faculty and later the dean of the School of Social Work at Tulane University.

Christoval Morel’s father, Pierre L. Morel dueled under the oaks in City Park while his wife (Victorine de Armas) was pregnant with Christoval. The Duelling Oaks in City Park have seen some of the most colorful scenes in New Orleans’ history. For years sword clanged against sword and bullets streaked between the ancient trees.

An article in the Times-Democrat, March 13, 1892, said, “Blood has been shed under the old cathedral aisles of nature. Between 1834 and 1844 scarcely a day passed without duels being fought at the Oaks. Why, it would not be strange if the very violets blossomed red of this soaked grass! The lover for his mistress, the gentleman for his honor, the courtier for his King; what loyalty has not cried out in pistol shot and scratch of steel! Sometimes two or three hundred people hurried from the city to witness these human baitings. On the occasion of one duel the spectators could stand no more, drew their swords, and there was a general melee.”

In early Creole days more duels were fought in New Orleans than any other American city. Creole honor was a thing of intricate delicacy, to be offended by a word or glance. The Duelling Oaks were a favorite setting for these affaires d’honneur, with pistol, saber, or colichemarde, a long sword with a broad forte and very slender foible, a favorite duelling weapon since the seventeenth century.

Creoles were expert swordsmen and often delighted in any and every opportunity to exhibit their art. Duels were fought over real and trivial insults, were sometimes deliberately
provoked by young men anxious to display their skill. A quarrel between rival lovers, a fancied slight, a political argument, a difference of opinion regarding an opera, any one of these things was ample excuse for a duel under the oaks. In his History of Louisiana, Alcee Fortier states that on one Sunday in 1839 ten duels were fought here.

In 1855 the police began to enforce the laws against duelling, but it continued surreptitiously for many years, despite frequent arrests and prosecutions. Finally, however, the law began to have some effect and there seems to have arisen a simultaneous loss of interest in the affairs. At last the time came when a man challenged to defend his honor with the sword or pistol, suffered no stigma by refusing an invitation to the Oaks. By 1890 duelling was only history.

The house is a frame one and a half story Greek Revival style structure raised off the ground on six-foot-high piles. The large half story created by the gabled roof is broken by two fine dormers on the Bayou St. John façade. The roof which extends outward to form a gallery across the bayou façade is supported by six square wooden columns resting on the brick piers below.

The entrance façade is five bays wide with the front door placed at the center. The façade is covered with ship-lap siding while ordinary weatherboards cover the solid brick exterior walls. The rear, which once contained a gallery and two cabinets, has been converted to a kitchen/den/breakfast area.

The house is very similar to raised houses in the Bayou-Lafourche area. However, by the 1840’s the traditional Creole plan with no hall had been replaced with the increasingly popular center hall plan favored by Americans. As such, this house is an important example of two different building styles. Morel house is a New Orleans landmark.

Pitot House
c. 1796 – 1799
1440 Moss Street (Formerly 1370 Moss Street) In 1964 as a result of a trade with Cabrini High School the Pitot House, threatened with demolition, was moved about 200 feet and is now located in a corner of the Desmare Playground. It is another fine Moss Street example of the Louisiana plantation house on a fairly small scale. While the upper part of the present structure is totally original, some of the older brick columns were either re-used or rebuilt after the move. Restored under the auspices of the Louisiana Landmarks Society. Open Thursday 11 am – 4 pm.

Musgrove-Wilkinson Housec. 1850’s
1454 Moss Street
A large, extremely simple Greek Revival residence, with wide central hall and plain interior mouldings.

New Orleans Museum of Art
1911 City Park
1971 Additions: Stern Auditorium, Wisner Educational Wing and City Wing – August Perez & Associates, Architects and Arthur Feitel, Consulting Architect.

The Degas House 
Historic Home,
Courtyard & Inn
 2306 Esplanade Avenue 
New Orleans, Louisiana 70119 
(504) 821-5009

jazzfestassholesWe love the folks who visit Faubourg St. John. However, there are some visitors who drink a bit too much and forget their manners. If you wouldn’t do it at your momma’s house, please don’t do it here.

For your safety, please consider checking out some of the information below:

Stash cash, credit cards and any currency.
Don’t make yourself vulnerable.
Work that cellphone.
Carry makeshift self defense weapons.
Identify safe places and people.

Please visit the link below for more:

Assume people driving cars do not see you. Drivers may be drunk, tired and sunburned; don’t expect that the drivers see the red light, let alone the periodic Jazz Fest reveler jumping out in the middle of the street.

Beware of bikers. A good rule of thumb is to treat a bike like a car. If you see one coming, don’t think you can run across the street right in front of it. Bikers will come upon you faster and be much slower at stopping than you think.

When walking from Jazz Fest to the location of your post-festing-party, remember that you may be traveling through potentially dangerous areas. Do not walk alone, know where you’re going and be aware of your surroundings.

Do not forget to hydrate! Dehydration can make people disoriented and alcohol adds fuel to the dehydration fire. I cannot count the number of Jazz Fest partiers I have seen take a spill due to too much alcohol and too little water. Don’t look like an amateur, drink lots of water!

More information in the link below:

New Orleans weather is unpredictable and the Fair Grounds tend to be muddy, so bring lawn chairs, an umbrella, and garbage bags, which double as a raincoat and a dry place to sit. The Louisiana heat can be unforgiving, so pack your sunscreen and a hat too.

Do not forget toilet tissue, as you are sharing those port-o-potties with 400,000 others.

To avoid the heavy crowds, walk on the circular horse racing track around the perimeter of the Fair Grounds, and venture out to the grandstands for food demonstrations, art installations, shade and clean restrooms.

More information in the link below:

Venture Beyond the Headliners
Absolutely Do Not Get Behind the Wheel
Come hungry
Linger in Mid-City
Indulge Intelligently
Don’t Miss NOLA by Night
Go for the Double

More information in the link below:

To ensure proper safety and preparation, please read the following rules and policies:

All persons and bags are subject to search

• Single, collapsible folding chairs (NO foot rests, side tables) and small folding
blankets are permitted.
• Wheelchairs permitted. Strollers for children permitted.
• NO tents or shades of any fashion.
• NO bicycles or other wheeled personal transport devices allowed on the
grounds or infield.
• NO flashing devices of any kind.
NO unauthorized vending.
• NO weapons, illicit drugs, contraband or fireworks.
• NO outside food, beverages or glass allowed.
• NO flag/kite-flying of any kind.
• NO Inflatables of any kind – this includes beach balls.
• NO pets.

Festival chairs and/or festival baggage are not allowed to be set-up anywhere in the
Grandstand, Paddock or Apron areas. They are only permitted on the Infield in certain areas.

All entrances and exits will be clearly marked for your safety.

fsj-bastille-2014Bayou St. John is the beautiful waterway that runs through Faubourg St. John.

We are so glad you are here.
Please leave no trace.

Bring yourself to the bayou.
Take your stuff home with you. ‪#‎leavenotrace‬


Below is short explanation of what the Faubourg St. John Neighborhood Association is about:

The Faubourg St. John Neighborhood Association (FSJNA), organized in 1977, is a benevolent group interested in continuing improvements in this historic New Orleans neighborhood through its people, children, historic waterway, public spaces and other environs.

FSJNA has participated in numerous beautification efforts throughout Faubourg St. John from Parks and Playgrounds to simple street plantings. A few examples of this are Desmare Playground, rebuilt by FSJNA in the early 90’s and beautified with tree plantings in 2008, the maintenance and care of Fortier Park, the beautification of the median on Esplanade Avenue and plantings along Bayou St. John. FSJNA worked in conjunction with KABOOM to restore the children’s’ play area at Stallings Playground, which was negatively impacted by Hurricane Katrina. After playground equipment was installed, FSJNA obtained a loan to purchase additionally needed rubberized safety tiles for the area. FSJNA also continues to apply for grants to support these activities. Our Keep Louisiana Beautiful grant allowed us to obtain benches and garbage cans for local parks.

FSJNA works to keep its membership informed. The website (available to anyone) is a library of the events, benefits, and programs FSJNA provides. Additionally is a resource for paid members (dues are $10 per year) this is a “yahoo group” website where members can exchange ideas, get neighborhood information, and even get hurricane updates.

During previous hurricanes, this site was a welcome source of information from people who stayed in the neighborhood to those who evacuated. It can be very reassuring to know the status of your home when you are away. The Faubourg St. John Neighborhood Association is also represented on FACEBOOK and TWITTER.   Faubourg St. John is also at…

No one in the organization gets paid. The Faubourg St. John Neighborhood Association is an all volunteer organization where any donations or membership dues go directly back into making Faubourg St. John the best neighborhood in New Orleans.

While zoning matters can be contentious, they are a necessary function of an involved neighborhood organization. FSJNA has successfully negotiated and worked with most of the neighborhood businesses to protect the quality of life and increase the appeal of the area for those businesses and residents through limiting traffic and noise pollution, helping with the elimination of blight and providing safer streets.

FSJNA also works with and reaches out to other non-profits and bordering neighborhood organizations by participating in area festivals, cultural events, community workshops and informational seminars. Future work will continue to focus on building partnerships with local non-profits and community organizations to help retain the historic character and positive quality of life we enjoy.


Posted in CRIME, Featured, HISTORY with tags , , , , , , , , , , , , on June 8, 2016 by katrinafilm


brinkman_j_lgby Emile J. Brinkmann

intlunionI am submitting these comments in connection with the City Planning Commission’s reconsideration of the issue of Short-Term Rentals (STRs) in Orleans Parish, and the City Council’s directive that a proposed zoning ordinance be drafted. As a point of background, I am the retired Chief Economist of the Mortgage Bankers Association in Washington and spent years running a research group dedicated to housing and housing finance issues. I have appeared on all of the major network and cable news shows, and have been quoted in newspapers through the US and other countries. Even though I retired and moved back to New Orleans two years ago, I am still the US representative on the executive committee of the International Union of Housing Finance, a 100-year old organization dedicated to housing issues around the world.

strdestructionBased on my background, I cannot think of an action that would be more destructive to the fabric of our neighborhoods and the well-being of our homeowners than the legalization of STRs for the benefit of a few, thereby rewarding those who take advantage of a lack of enforcement to violate existing laws with impunity. In Part One of my comments, I will make three basic points about the negative economic effects on homeowners. In Part Two I will address comments that have been made to the effect that AirBNB, VRBO, and similar operations are like Uber and are merely part of the growth of the so-called sharing economy.

Part One
1) STRs fundamentally upset residential valuations by introducing unsustainable commercial valuations into residential neighborhoods.
We have already seen home prices in historically significant neighborhoods increase at rates far in excess of the local incomes needed to support those prices. A significant portion of those home price increases are due to ability of some of the properties to earn upwards of 20 percent to 25 percent return on investment through illegal renting. This is great news if you already own a home in one of these areas and will be selling soon. Because the Assessor’s Office has no way to separate out house sales for STR usage, this is great news if you are the city collecting residential property taxes based on values inflated by STR commercial use. It is bad news if you are trying to buy or rent in Mid-City, Treme, the Bywater, or other impacted neighborhoods in order to live in the city.

It is terrible news if you are a long-term resident with no intention of moving, but are now faced with an annual property bill driven up by the valuation effects of illegal renting.

The valuation and property tax problem will likely be exacerbated by the idea that the city can mitigate the negative impact of STRs by limiting the number allowed per block face. The owner of the first one on the block makes a killing, and the value of that property goes up. However, the other owners on the block not only have to deal with the disruptions caused by the STRs and the higher property taxes, they are precluded from selling at the higher STR-driven prices because no other STRs will be allowed on their block (assuming for the sake of argument that the city would actively enforce density limitations). Therefore, the idea that the negative impacts of STRs can somehow be ameliorated by reducing the permitted densities can actually make more people worse off from a valuation perspective.

Given the instability of this structure and the lack of equitable treatment in terms of valuation and who is allowed an STR and who is not, I do not believe density limits would survive legal or political challenges, and are therefore not a viable option to prohibition.

Crown Point neighborhood signsThe result is that if you are a New Orleans resident with no intention of selling and moving, you would not only face the prospect of having weekly fraternity parties next door, you get to pay higher property taxes for the privilege. The result is that if you are looking to buy, you risk over-paying and being underwater on your mortgage if something were to happen suddenly to impact negatively the STR business, as will be covered in the next point.

2) Short-term Rentals directly inject the business risk of tourism into residential neighborhoods.
keepneighborsHotel owners and operators are accustomed to the business risks associated with the travel and hospitality industry. These risks are reflected in their operational plans, capital investments, and equity and debt financing costs. They understand that in a recession, travel is disproportionately impacted as businesses cut back on discretionary travel as a first response. They learned in the aftermath of the 9/11 attacks that terrorism can interrupt air travel, and that even when flights are restored, companies will impose travel restrictions on key personnel.

In New Orleans and other hurricane-impacted areas, they have learned that even the threat of a storm, with or without a mandatory evacuation, can cause their rooms to empty and disrupt operations for some time. (As a side note, would operators of STRs be required to maintain enforceable hurricane evacuation policies for their guests, or would responsibility for these visitors fall on the city?)

In contrast, the health of the hospitality industry has a more muted impact on the traditional residential housing market in New Orleans. Tourism is only one of the legs of the New Orleans economy, and there are other legs to support the New Orleans jobs market and home prices. STRs, however, directly inject the risk of the tourism market into every neighborhood of the city where they exist. Demand for houses and high prices exist when owners can earn high returns, but what happens in a downturn? What happens when tourism suddenly slows for one of any number of predictable and unpredictable reasons? What happens is what we have seen in other housing markets dominated by investors and speculators. At the first sign of a reversal, they sell with a vengeance, driving down prices and leaving the long-term residents suffering the consequences of rapidly falling prices and “For Sale” signs everywhere. If the properties are leveraged, they can sit for months and years as they work their way through the mortgage foreclosure (and probably bankruptcy) process, further depressing values.

Real estate speculation is a fact of life. Some people win and some people lose. When a strip mall goes bankrupt on Airline Highway, the negative consequences (other than to the property’s owners and lenders) are limited to having one more eyesore around town. When that speculation, however, is driven by STRs and is occurring in some of the city’s most important and historic residential neighborhoods, the negative consequences of a drop in tourism will go right to the hearts of these neighborhoods, and will be much more severe and widespread than any normal downturn.

3) Weekly bachelor parties are more than a nuisance. They represent a real loss of value for the neighbors.
Many of the comments presented to the CPC and the City Council on this issue have dealt with the horror stories of late night parties and the problems that occur when out-of-towners believe that they can freely extend the revels of Bourbon Street to the residential neighborhood where they have rented a house for the weekend. The problems go far beyond loss of sleep, frustration with the inability of an under-staffed NOPD to deal with noise issues, and the absence of a private right of action to move against the owners of the offending properties. They represent a real loss of value to anyone attempting to sell an impacted home to anyone other than an STR operator. (I do not know whether the failure to disclose a nearby nuisance STR in a real estate declaration has been tested in a Louisiana court, but I am fairly certain it would be actionable in other jurisdictions.)

The logical outcome is that once an STR opens on a block, the only informed sales that would not be negatively impacted by the existence of the STR would be those to another STR operator. As already noted, however, such a sale would be prohibited if density limitations were put in place as part of an attempt to make STRs politically palatable.

This points again to the utter fallacy of putting any faith in density limitations. The idea that the CPC and the City Council would not be inundated with requests for exceptions, and that many of those requests would be granted, simply ignores political reality. That assumes, of course that the many illegal operators of STRs would even apply for exemptions to the density limits. The reality is that the city has failed for years to deal with illegal STRs. Based on this history, it is reasonable to expect that any density limits would be ignored or gutted in a few years.

keepneighborhoodsIn conclusion, the adoption of a legal STR framework for residential neighborhoods, particularly for non-owner occupied structures, would have tremendous and largely irreversible negative impacts on the fundamental character of the city for years to come. Ignoring the quality of life issues, the economics alone will lead to a further hollowing out of the city’s full-time residents. Homeowners will see that the rational action is to sell. They would avoid both the higher property taxes and the risk of a speculative bubble bursting with downturn in the tourism industry.

Part Two
AirBNB is not like Uber
It has often been argued that AirBNB and similar operations are nothing more than Uber for houses, that they are simply one part of an irreversible movement toward a shared economy where technology brings together the buyers and sellers of various services. At their best, such arguments are facile and do not stand up to even a modest amount of economic scrutiny. At their worst, they are a bald-faced attempt to direct attention away from what is illegal activity by saying that it is no different from what everyone else is doing in other areas of the economy. In reality, the only similarity between Uber and AirBNB is that both rely heavily on computers and smart phones.

Uber is an example of what the Austrian-American economist Joseph Schumpeter described as “creative destruction”. The idea is that in a capitalist system, economic growth occurs when innovators put their money behind new ideas for goods and services. While the creative process is the key for creating new markets and new opportunities, it comes at the cost of destroying old products and services, and the capital invested in delivering those old goods and services.

A prime example is Blockbuster versus Netflix. Blockbuster invested huge sums in brick and mortar stores and an inventory of video tapes, and later DVDs, to fill the shelves in those stores. It had a large complement of employees to man the cash registers and stock those shelves. Along came Netflix with the idea that people could go to their computers, select what titles they wanted to see, and have the DVDs delivered a few days later by the postal carrier. Immediately successful, the service Netflix created began the destruction of the hundreds of millions of dollars Blockbuster had invested in its system. Later, when Netflix switched to streaming content, it effectively destroyed the capital Netflix itself had invested in DVDs and its mail order business.

In Uber’s case, it challenged the existing way of summoning a taxi, as well as introducing a model that matched supply and pricing to peak periods of demand. Uber was challenging the economic model of the taxi business, but, more importantly, it challenged the local regulatory framework for taxis that existed in each of the cities where it sought to operate. Its success has come in exposing and differentiating between those regulations that were necessary for the public’s protection and those regulations that merely existed to protect the status quo. After all, until Uber, the method of summoning a cab outside a hotel had not really changed since the 1800s. This is Schumpeter’s creative destruction process at work.

The key difference between Uber and AirBNB (and similar companies) is that there is nothing fundamentally illegal about the service Uber provides. Paying someone to take you in his or her car from Point A to Point B is not inherently illegal, provided appropriate licensing requirements are met. The only ones harmed by the Uber innovation are those invested in the old ways of doing business.

In contrast, AirBNB and similar services are providing technology platforms that offer services that are fundamentally illegal. The regulations of which AirBNB facilitates the violation are not there to protect capital invested in the hotel industry. Rather AirBNB is facilitating, for a profit, the violation of zoning laws that were enacted to protect individual homeowners from this type of commercial activity. If the only harm was to the established hotels and legal bed and breakfast establishments, it could be argued that AirBNB is just another example of Schumpeter’s creative destruction. However, the true harm and destruction is to the residents of the neighborhoods disrupted by the illegal short-term rentals. The residents of these neighborhoods do not have capital at risk in the hospitality industry like Marriott or Hilton. Rather the capital they have at risk is in homes that they trusted would be protected by zoning laws and the enforcement powers of the city government. It appears that trust was misplaced.

Therefore, AirBNB has nothing to do with Uber or Schumpeter’s growth through creative destruction, but is simply a case of making a fast buck at the expense of someone else by facilitating an illegal activity. The closest parallel to AirBNB is not Uber, but hiring prostitutes with Craig’s list.

Emile J. BrinkmannNO-short-term-rentals