As a historian of cities and economic life, I am interested in how markets transform our understanding and use of space, as well as how local governments grapple with the political and social consequences of those economic changes. Studying real estate as an object with a history offers useful insights for some contemporary urban issues. The city I have studied most closely, Paris, is one of several currently struggling to manage the range of opportunities and challenges presented by the so-called sharing economy. October 1st marks one year since the popular house-sharing service, Airbnb, began including a local tourist tax in its rates for Parisian rentals. One year of the 83 euro cents tax (per rental, per night) has netted the city 5.5 million euro. The city will dedicate the money to tourism expenditures, intending undoubtedly to help maintain the city’s (and country’s) prominence as the second most significant Airbnb market in the world after the United States.
Paris and Airbnb negotiated the tourist fee after complaints of unfair competition from the city’s hospitality industry, as well as in response to ongoing worries about the effect of these short-term rentals on the availability and affordability of housing in the capital city. It is one of several measures introduced by the city government to mitigate the spread of professionalized subletting. When the municipality published data on approved short-term rentals earlier this summer it incurred the ire of owners and residents who viewed the move as encouraging denunciation of neighbour by neighbour. (Critics bandied about the term ‘délation,’ which has distinct links to France’s experience of occupation during the Second World War.) Despite such controversies, historical precedent in the city demonstrates the importance of recapturing some of the income from property market transformations for public purpose.
Links between the real estate industry and tourism are a longstanding feature of modern urban growth. In Paris, these links were established in the wake of the Napoleonic Wars. Affluent British visitors regained access to the continent, creating a booming business in tours to France that went beyond providing transportation and a guide. The agency of John Arthur et Tiffin was founded by Englishman John Arthur in 1818 (it still maintains offices today in the city’s 17th district) and quickly evolved into one of the city’s earliest and most innovative real estate brokerages. William Henry Tiffen, a collaborator who honed his skills in the popular tourist destination of Nice, took over the firm in the 1880s and revolutionized property advertising in the capital with a pioneering marketing journal filled with colour floor plans and photos of country estates. Not content to broker, the company began its own property development operations in the 1890s.
Cover from John Arthur et Tiffen’s Grand Journal Officiel des Locations et de la Vente, 1906
The Pereire brothers, financiers Emile and Isaac, give us the most spectacular example of the links between real estate speculation and tourism infrastructure. Well-known as invaluable financial intermediaries in Haussmann’s famous renovation of Paris in the 1850s and 1860s, the Pereires’ massive Compagnie Immobilière – Real Estate Company – anchored their ventures around the Universal Expositions that took place in Paris in 1855 and 1867, introducing the first American-style luxury hotels to the city with the Grand Hotel du Louvre in 1855 and the Grand Hotel at the new place de l’Opéra in 1862.
The Grand Hôtel du Louvre
But accommodating visitors was not only the business of real estate professionals and hoteliers. By studying tax records we can see how ordinary residential spaces were opened up to a floating population of tourists and temporary residents in the second half of the nineteenth century. Every ten years, tax officials visited each apartment in the capital, climbing stairs, traversing courtyards, and touring homes in order to record their rents, numbers of windows and doors, and tenants’ occupation – all of which were linked to different taxes. Residents who rented out parts of their apartments on a sufficiently regular basis were classified as professionals and taxed accordingly. Their rentals had to be advertised with a specially-coloured sign; some were denounced to officials by neighbours, who complained about the turnover of anonymous residents in the building. These records reveal the spread of middle-class subletting in the fin-de-siècle capital. Importantly, regions of speculative development, where rents were high and – every ten years or so – another Universal Exposition implanted itself in the vicinity, developed distinct traditions of house-sharing, with some buildings even evolving into fully-fledged hotels. Many of these subletters were women, especially widows, looking to support themselves in increasingly pricey apartments.
Municipal tax records (Archives de Paris), showing indications of subletters taxed by the city at the end of the 19th century.
These renters were facing exorbitant rents and – then as now – found creative ways to make ends meet by commercializing parts of their apartments. And corporate property owners and management companies – both new entities in the rental market in the late nineteenth century – tolerated the practice because it allowed them to keep charging high rents and pass on returns to their shareholders. We have few ways of knowing how these temporary house letters viewed their arrangement, whether it came as a regretted last resort or merely provided easy money and a happy distraction to empty nesters. In some instances, renters evolved into professional subletters, accumulating apartments and subletting on a large scale. Importantly, in some buildings I studied, it took only ten years for buildings to move entirely from the long-term to the short-term market, pulled by the opportunities presented in this more expensive sector.
Advocates of Airbnb, Uber, and similar services present these businesses as disruptive alternatives, promising a 21st-century democratization of social relations via market reform. As far as subletting apartments is concerned, though, historical precedent is clear that any equalization of housing accessibility will depend on public intervention to combat the accelerating unaffordability of goods.
Alexia Yates is the author of Selling Paris: Property and Commercial Culture in the Fin-de-siècle Capital (2015).