It’s Tuesday, November 6^th. Tonight marks the conclusion of election day, the day where Americans will vote to elect or re-elect representatives in the House and the Senate, and, perhaps more importantly, voice the direction in which he or she thinks the country should move. Americans are opinionated, and they’re sharing that opinion. 36 million people voted early in this election, indicating a voting turnout some are comparing to a presidential election.

So why are Americans turning up to vote more than expected? They have something to say.

According to the Pew Research Center, immigration is a top priority for both Republicans and Democrats, and is the most important issue being voted on today among voters, a potential reason voters are showing up in staggering quantities at the polls. As a caravan of migrants moving from Central America towards the United States increasingly became an election strategy over the past two weeks, the topic has emerged as a “closing statement” on the campaign trail, making the issue more immediately relevant. And voters have strong opinions about this. Basic immigration literacy, however, like so many other policy issues, is largely disconnected from reality.

Americans have voiced that immigration policy is a top priority, even a reason they are showing up in record numbers at the polls, but data show that many fail to grasp basic facts about the subject.

More than 42% of individuals polled incorrectly identified that fewer than half of US immigrants are here legally. Current estimates suggest that around 75% of immigrants are in the United States legally. Perhaps even more alarming is the fact that immigration information, supposedly grounded in fact rather than opinion, is so starkly split along party lines.

The above graph, reporting public opinion about crime rates, shows a wide spread in public opinion—distinctively along party lines—regarding an issue that is theoretically nonpartisan.  While 42% of red voters believe that undocumented immigrants are more likely than US citizens to commit serious crimes, 12% of blue voters hold the same opinion, representing a 30% spread.

While the divide between the right and the left is ever-reported and increasingly evident in everyday interactions, this problem manifests itself in crucial policy discussions. Without basic knowledge of rudimentary facts—facts integral to voters’ most crucial issues—the public is useless in engaging in the meaningful and nuanced conversations that are required to debate immigration policy.

I would argue that the emphasis placed on immigration in the polls is both warranted and necessary. These policies are part of an elite group that impact almost every facet of the American story—GDP, employment, inequality, and social trajectory. But we cannot possibly discuss the true issues behind the policy—issues of economic value creation and job displacement and inequality enhancement—if we do not first address the fact that Americans don’t understand the issues we claim to care the most about.

We should fear—and fight—those who speak (and vote) without adequate information, regardless of what colors they wear.

A row of old warehouses came into the view as the car went pass the green Vincent Thomas Bridge to reach the coastline of southern San Pedro. Lindsay Cruver stopped at the spacious parking lot at Berth 58, locked the car and stepped into her office — two retrofitted shipping containers, orange and blue, with the company name Catalina Sea Ranch printed on them.

Catalina Sea Ranch is an offshore mussel farm operated in federal United States waters. Cruver has been working as a researcher for the company since its foundation two years ago.  “Our country is actually lagging behind in aquaculture,” Cruver said, “what we are doing is really to catch up with other countries and try to grow more seafood by ourselves.”

Over 90 percent of seafood consumed in the United States is imported. Nearly 65 percent of aquaculture production is inland and concentrated mostly in the tropical and subtropical regions of Asia.

In recent years, the United States has slid to 17th place in world farmed seafood production, slipping behind Myanmar and almost leveled with Malaysia, according to the Food and Agriculture Organization of the United Nations (FAO).

The country is consuming very little seafood. Compared to the recommended 20 percent, seafood accounted for 5 percent of total consumption from the protein foods group in 2014, which was dominated by meat and poultry.

Culturally, the Americans are more inclined to consume terrestrial meat than seafood. Beyond that, the country does not farm fish the way it farms cows and chickens. The amount of fish and shellfish harvested from the wild annually in this country is about 7 times greater than the amount produced by domestic aquaculture farms.

Now the search is on for a more sustainable way of getting food from the sea, as 85 percent of the world’s marine stocks are either fully exploited or overfished, World Wildlife Fund says.

One of the options would be developing sea ranches and farm fish in the ocean. But they are never perfect businesses as the aquaculture farms bear the risks of spreading diseases to wild fish, harming local habitat and impacting fishing activity.

Cruver said the it had been very hard for sea ranches, both coastal and offshore farms, to get permit. “It’s not just the regulators,” she said while pointing at the other side of the terminal island, “people who live there do not want to see warehouses and fishing nets – they want to have the view of the beautiful, clean sea surface.”

Due to the concern on aquaculture pollution and transmitted disease carried by the finfish, there had not been any permit given to offshore finfish producers. The shellfish farms are easier to manage, as mussels, oysters and clams do not move around, nor do they feed on small fishes. So, the Catalina Sea Ranch started as a pilot to farm shellfish. For now it is the only offshore sea ranch in Southern California.

It takes an hour for the boat to reach the sea farm from the port behind the warehouse. On the surface of the sea one could only see the floater and the data monitors powered by solar panels.

The ranch is underwater, where thousands of mussels were tied onto the grouped ropes. “Technically, the mussels grab onto the ropes,” Cruver said, “as they had numerous ‘hands’ called mussels threads.” When a mussel is put close to something, it naturally attaches itself to it within minutes using those threads.

The sea ranch currently sees a satisfying performance as it delivers 2 million pounds of mussels year-round to the retailers all over Southern California. It has to prepared itself for challenges, though. With climate change bearing down on the tropics, the changing ocean condition makes it more difficult to predict what’s going to happen for a business under the sea.

Cruver said that anyone in the west coast aquaculture industry would be familiar with the crisis confronted Whiskey Creek Shellfish Hatchery. In 2008, the hatchery almost went out of business as the baby oysters they attempted to produce wound up dead on the bottom of the tanks month after month, causing a 75 percent decrease in its oyster production in the year.

It turned out that the “ocean acidification,” a byproduct of climate change, is to blame, as opposed to foreign bacteria, which is a more commonly seen problem in sea farms. A study in 2009 by FAO predicted that it is likely that diseases affecting aquaculture would increase both in incidence and impact.

Multiple universities and research institutions are attempting to provide solutions to the chronic threats, as the human society needs to turn to the sea for more food in order to ease the resource-intense inland farming industry.

Sarah Lester, an assistant professor at Florida State University, recently found in her study that Southern California has huge potential for offshore ocean farming, as long as it was carefully planned.

This gives more weight to the two containers at the giant warehouse in San Pedro. Cruver and her other 20 colleagues will also have to be prepared for future competitions, as what they are doing is setting a pace for more new comers in this under explored business field.

1Malaysia Development Berhad (also known as 1MDB) is a multibillion sovereign wealth fund set up by the ex-Malaysian prime minister Najib Razak following his 2009 election victory, under the guise that it would finance projects like power plants to help the Malaysian people but in truth was one of the biggest frauds in history. Razak, the fund’s mastermind and so-called “Zelig of the good life” Jho Low, Malaysian politicians and global bankers were beneficiaries of this embezzlement. By diverting 1MDB funds to use for personal gain, they illegally acquired “billions of dollars worth of assets, including real estate, art, a luxury yacht and proceeds from the film The Wolf of Wall Street” (Bloomberg). The irony that a film about Jordan Belfort – a stockbroker who made untold riches and then was imprisoned for fraud – was financed with laundered money would be rich enough. This detail represents only a minuscule part of a scandal which has brought down a prime minister and now involves multinationals across nearly a dozen countries.

Court filings claim that, over the past decade, Razak’s personal bank accounts were filled with approximately $700 million of the fund’s assets. Upon learning of the prime minister’s central role in the fraud, Malaysians enacted deserved retribution by voting Razak out of office in January. Six months ago, the ruling Barisian Nasional coalition, which had been led by Razak’s party, lost command for the first time since Malaysia became an independent nation in 1957. The coalition officially disbanded in August. Malaysia’s central bank governor also resigned. As the scandal’s fallout has unexpectedly brought opposition leader Mahathir Mohamad, the nonagenarian former prime minister, to power, Malaysia teeters on the brink of legitimacy; it remains to be seen what measures will be taken to ensure the protection of its finances.

The penalties for Goldman Sachs, which earned an unusually high share of $600 million in commissions for underwriting three 1MDB bond offerings worth $6.5 billion, could be significant (FT). The firm, now under Justice Department investigation, has told investors this month that its “potential losses related to legal proceedings involving 1MDB could run as high as $1.8 billion” above initial estimates (FT). These allegations could damage Goldman’s reputation even more so than in the postscript to the 2008 financial crisis. Why? In this case, it is the senior members of the firm who have pleaded guilty to bribery, been indicted or placed on leave –– former partner Tim Leissner, former managing director Roger Ng, and co-head of Asian investment banking Andrea Vella, respectively (WSJ). Additionally, the bonds were approved by 30 executives, including immediate past head Lloyd Blankfein and newly appointed CEO David Solomon (FT). Overall, this scandal threatens to cast doubt on Solomon’s leadership abilities at the embryonic stages of his tenure as CEO and erase the goodwill Goldman has desperately sought to regain following massive fines paid out for its role in the crisis.

According to Britannica, “investigations launched by Swiss and U.S. authorities determined that an estimated $3.5 billion had been embezzled from 1MDB and laundered” around the world. Singapore, off of Malaysia’s coast, has barred multiple Swiss banks from operating within its borders due to their rule-breaking; Switzerland is delving deep into the books of J.P. Morgan Chase, Credit Suisse, UBS and other powerful financial institutions to determine possible crimes. The United States Department of Justice’s anti-kleptocracy unit seeks to recover billions in 1MDB assets – “the largest asset recovery operation in the organization’s history” (Bloomberg). While the scandal-plagued will face severe consequences, there is now cause for governments and international authorities to enact stringent laws – true global financial reform – vis-à-vis money laundering and corruption. It will be fascinating to see how Malaysian society and institutions throughout the world recover from this calamity.

Sources:

Billion Dollar Whale: The Man Who Fooled Wall Street, Hollywood, and the World, by Tom Wright and Bradley Hope, Hachette, RRP. 2018.

https://www.wsj.com/articles/goldman-disclosure-in-1mdb-probe-points-to-potential-control-culture-concerns-1541461239

https://www.channelnewsasia.com/news/commentary/malaysia-general-elections-ooi-kee-beng-rot-barisan-nasional-10221134

https://www.ft.com/content/76cd99b8-e0f8-11e8-a6e5-792428919cee?kbc=e09d5857-96d7-31aa-bdac-ae689cc95a53

https://www.bloomberg.com/graphics/2018-malaysia-1mdb/

https://www.bloomberg.com/news/articles/2018-05-24/how-malaysia-s-1mdb-scandal-shook-the-financial-world-quicktake

https://www.britannica.com/biography/Najib-Razak

https://www.wsj.com/articles/malaysias-1mdb-the-secret-money-behind-the-wolf-of-wall-street-1459531987

https://www.nytimes.com/2018/11/01/business/goldman-sachs-malaysia-investment-fund.html

Xinyan Zhang’s high school was in Beijing, and she got a score of 550 out of 710 in her gaokao, which is China’s National Higher Education Entrance Examination. She chose the Communication University of China, one of the top universities in China.

Because Zhang wanted to major in Broadcast Journalism, she took the arts exams with other applicants and ranked 71. When entering her college, Zhang felt very confident about her scores until she met three classmates from Jiangsu, ranking from 1-3 on the art exams.

Zhang would never forget the conversation between her and her Jiangsu classmates. Zhang’s classmates said it was impossible for them to come to the Communication University of China if their Arts exam rankings were not high.

This conclusion may all come from the different education policies made by the Chinese government based on the hukou system.

In China, the hukou system is a system of household registration, which identifies a person’s information including residence, name, parents, spouse and date of birth.

The government has dominated the gaokao examination, which is considered a fair game for each student. Especially in Beijing, the government don’t need many migrants and wants to make the scores of policymakers’ children look nicer.

Students usually go to their schools near their hukou, and they are required to take gaokao in their hukou location.

According to the local education bureau offices data, Beijing students like Zhang have a 25 percent chance to get into one of the government-identified top universities. However, Jiangsu students have a less than 10 percent chance to get into such universities.

China’s prestigious Peking University and Tsinghua University, which are both located in Beijing, take 84 students out of every 10,000 Beijingers, 14 out of every 10,000 Tianjiners (a city near Beijing), and only 2 out of every 10,000 Jiangsuers.

This condition has happened not only on Jiangsu students, but also students from Hunan, Hefei, Anhui, etc.

Zhang reminded her high school president talking about how the high school alumni met each other in Peking University and Tsinghua University. Each year, at least 100 students at her school have the chance to go to the two universities. In the entire Jiangsu province, less than 15 students may have the same opportunity, although the population of Jiangsu is 3.5 times larger than Beijing’s.

More importantly, the education quality and even the pressure on students are higher in Jiangsu. Because students have to take their province’s gaokao examinations during the same three-day gaokao period, the difficulty levels are different.

Students joked on Weibo, the Chinese Twitter, that Beijing’s gaokao is the easy mode, Tianjin’s is the medium mode, and Jiangsu’s is the hell mode.

Zhang said one of her classmates from Jiangsu always felt not confident even though she always had the best scores in class and got accepted by one of the top newsrooms in China.

Zhang also called herself a confident girl because she believed that students in Beijing had experienced the ‘encouraged education system.’

As the province that has the highest per capita GDP in China, Jiangsu’s total GDP was 7.06 trillion yuan in 2017. Therefore, some wealthy parents come with two ways to help their children overcome the education disadvantage.

Middle- or high-class parents ask their children to study English and send them to study abroad after graduation. Therefore, these students don’t have to tolerate the unfair competition with Beijing’s students.

On the other hand, more parents are coming up with new methods. In 2017, The China Daily reported on how did some Chinese parents purchase the Republic of Guinea’s citizenship for their children. Therefore, these local students became foreigners, took the easiest gaokao examinations designed for international students, and finally got into Peking University.

 

Sources:

https://www.businessinsider.com/maotanchang-gaokao-factory-town-2013-10

https://www.theatlantic.com/china/archive/2013/06/chinas-unfair-college-admissions-system/276995/

https://www.scmp.com/news/china/policies-politics/article/1945104/thousands-chinese-parents-take-streets-protest

Turns out, mo’ money does mean mo’ problems for many Democratic candidates in the midterm elections– as long as those problems are part of a political agenda. This year, contributions to Democratic campaigns in the midterms have topped $1 billion, while contributions to Republican ones have only reached half of that amount. This high influx of cash has possibly contributed to the Democrats taking the House majority for the first time since 2010, which the New York Times predicts will be at a margin of almost 10%. That would be the highest margin the U.S has seen in years.

Democrats are even getting record funding in deep red districts. Kentucky’s 6th district is notoriously pro-Trump, but this year, things have been shaken up. Retired marine fighter pilot and Democratic candidate Amy McGrath received three times more funding than her opponent Andy Barr. Although incumbent Barr still took the win, McGrath walked away with 47.8% of the vote. To put that in context, Barr’s opponent in 2014 only received 40%.

 

Donations have also crossed state lines. In the Texas senatorial race, Ted Cruz received $24 million from voters, while his opponent and Democrat Beto O’Rourke received $70 million. The Center for Public Integrity reported that a chunk of O’Rourke’s donations came from notoriously blue states like California and New York. Cruz still beat O’Rourke this year with 50.9% of the vote, but in 2012, he won with 6% more breathing room.

 

However, my home state of Illinois may best exemplify the effect of campaign donations on election results. Growing up in Chicago, I knew exactly who the Pritzker family was– they have donated countless buildings, parks, and pavilions to the city. They also own the Hyatt hotels. Now, J.B Pritzker is the next governor. While his opponent Bruce Rauner is worth a measly few hundred million dollars, J.B Pritzker is worth well over $3 billion. Moreover, Pritzker’s campaign spent over $170 million dollars, while Rauner spent around $70 million. To put these numbers in perspective, University of Illinois in Chicago Professor Dick Simpson estimates that a gubernatorial campaign might cost $20 million.

So why have so many people been donating to democratic campaigns this year? Some analysts say the reason is Trump. Donald Trump is nothing short of a polarizing figure, and in an effort to take back political power, Democrats are making sure to donate. In 2018, 64% of American political contributions flowed to democratic candidates; In 2014, that number was 48%.

With Democrats pushing such a strong monetary effort this election year, it begs the question: Will donations be just as high in the 2020 presidential election? If Trump is the driving force that motivates people to dip into their pockets, the blue wave may take over.

The famous Hollywood sign, year-round warm weather, and the beautiful beaches along the coast attract millions of people to travel to Los Angeles each year. According to Discover Los Angeles, the tourism industry in this city generated this year alone $34.9 billion dollars (Los Angeles’ Tourist Industry Generates…).

What makes Los Angeles a hot spot?

As the capital of the world for celebrities, performing arts, acting, and music, you will be sure to spot your favorite artist either walking on Rodeo Drive or performing in a packed concert hall. If concerts are not your favorite, Los Angeles boasts many famous art galleries, like the Getty, Museum of Natural History, Museum of Modern Art, Los Angeles County Museum of Art, the Broad, and many more. From Los Angeles to Santa Monica, tourists can shop until they drop and recover by soaking up some strong UV rays at the beach. Within a 50 mile radius of Los Angeles County, tourist can take advantage of ski slopes, mountains, and amusement parks, as well.

The statistics by Discover Los Angeles found that 41.2 million domestic individuals and 7.3 million international travelers visited the city of angels in 2017 alone. These tourists spent $22.7 billion dollars directly into the local economy, resulting in $34.9 billion in economic impact, which include induced and indirect benefits (Los Angeles’ Tourist Industry Generates…).

How? The tourism industry in Los Angeles encourages investments in infrastructure, attractions, and hospitality, allowing the city itself to thrive, along with all the Los Angeles County residents. Tourism helps fund this county, bringing in $2.7 billion in state and local tax revenues, which in turn saves each household in Los Angeles $837 per year (Los Angeles’ Tourist Industry Generates…). This tax money is translated into improving the city.

Tourism also opens the job market. According to Discover Los Angeles, “Tourism supported 523,800 jobs in L.A. County’s Leisure & Hospitality sector, one of the area’s largest and strongest economic sectors, employing 1 in every 8.5 workers” (Los Angeles’ Tourist Industry Generates…). It is apparent that tourism is an influential economic driver for the local economy.

Daniel J. Stynes writes a report about the economic impacts of tourism and finds many direct, indirect, and induced effects on the economy from tourism. While direct effects would include hotel room sales, indirect effects would include the changes in the job market and business growth in a booming tourism region (Stynes).

Although, this dramatic increase in tourism has also resulted to inflated prices for Los Angeles residents and an increase in traffic.  The book, Global Tourism, written by William Theobald, emphasizes that people study the impact of tourism on the economy because it is “easily quantifiable and measurable. In addition, it was presumed that the income derived from tourism could make up for any negative consequences of tourism. However, over-emphasis on economic benefits have often led to adverse physical and social consequences” (Theobald). It is important for the city to take action managing Los Angeles tourism in a sustainable way.

 

Works Cited

“Los Angeles’ Tourism Industry Generates Record $34.9 Billion in Economic Impact.” Discover Los Angeles, Discover Los Angeles, www.discoverlosangeles.com/press-releases/los-angeles-tourism-industry-generates-record-349-billion-economic-impact.

Stynes, Daniel. Economic Impacts of Tourism.

Theobald, William F. Global Tourism. Routledge, 2016.

Wall Street and its investors are anxiously anticipating the results of the current midterm elections. The expected results are that the Republicans will win the Senate and that the Democrats will win the House. Many investors are hoping for this result as it would cause gridlock. This means that the existing economic agenda would stay relatively the same. If Democrats were to win both houses, there would be sharp sell-offs. If Republicans were to win both houses, then stocks may rally in favor of tax cuts. 

Many of the major banks agree that there will be a split in Congress, however each bank has their own interpretation of how the market will react to this split. The Bank of America Merrill Lynch believes that base case is a boon for equities since markets typically do well under gridlock. Goldman Sachs believes that there will be modest reactions, weaker fiscal stimulus and growth, and no major changes in trade policy. Morgan Stanley believes that a trade risk will be present regardless of the outcome of the election. (Franck)

If there is an upset and the Republicans win both houses, US equity markets will rally broadly as companies sensitive to tax cuts and de-regulation will outperform. Additionally, in bonds, 10-year Treasury yields most likely would break the high end of their recent range. The win would validate the current administration’s aggressive trade approach. Non-US equity markets would be likely to underperform since investors will pursue deregulation and more tax cuts. Finally, the win would result in a strong dollar, which would be bad for emerging markets. (Rapoza)

In opposition, if the Democrats were to win both houses, then deregulation would slow down. It would also create a higher chance of Trump’s impeachment and the creation of legislation designed to constrain Trump. (Rapoza)

There may still be some uncertainty about the elections which is causing many investors to hold back on making big bets just in case there is a surprise outcome. Despite this, Wall Street realistically has very little to worry about. In midterm elections since 1946, the S&P 500 Index has had an average price return of 16.7 in the twelve months following the elections. (Jay, Veiga) While Wall Street as a whole will not be harmed, there may be minor political shifts causing shifts in investments. For instance, shares of gun makers may change as Congress reshapes gun control laws. Additionally, there may be more possible investments in infrastructure because that is an area when Trump and the Democrats may be able to find a common ground. Adversely, pharmaceuticals could suffer because both parties favor drug price control. 

The likely outcome of the midterm elections will be gridlock. This will result in the predictable rise in investments post midterm elections and then subside to the United States continuation of its economic agenda. 

Sources:

https://www.cnbc.com/2018/11/06/heres-what-every-major-wall-street-firm-expects-from-the-election-and-how-to-play-it.html

https://www.forbes.com/sites/kenrapoza/2018/10/04/midterm-alert-what-happens-if-republicans-actually-keep-congress/#694cc3857412

https://www.detroitnews.com/story/business/2018/10/18/midterm-elections-stocks/38201061/

In the aftermath of the disappearance and murder of Saudi-Arabian journalist Jamal Khashoggi, President Donald Trump said that he “really wants” to give Saudi Prince Mohammed bin Salman the benefit of the doubt.

Despite the Trump administration’s condemnation to whoever was behind the killing, Trump, in an interview with Fox Business, said that Saudi Arabia has “always been a very good ally” and that the cost of severing ties with the oil-based state could cost “500,000 jobs.” In a separate interview with the Wall Street Journal, however, Trump upped the number of job losses to the “millions.”

Trump is alluding here to the arms deal with Saudi Arabia back in 2017, in which $110 billion in arms contracts were signed in a meeting with Prince Salman and his cabinet. The press release stated that the deal would support “tens of thousands of new jobs in the United States,” not quite a million.

Saudi Arabia is currently the biggest purchaser of U.S arms exports, far ahead of the United States’ next biggest clients—Iraq, Australia, the United Arab Emirates, and Qatar. However, a labor market study by the Aerospace Industry Association showed that total A&D exports accounted for about 1.42 million jobs as of 2016, about 0.9% of the total U.S labor force. Private sector defense workers made up even less, at about 0.5%.

Even still, it’s hard to believe that by cancelling the arms deal, pulling back from our longstanding support of the Saudi monarch, or even embargoing them would cost “tens of thousands” of jobs. Plus, if those jobs are in the public sector, why not put tha labor to use in less mass-murderous activities? It is the aerospace industry after-all. Plenty of profitable investments besides weapons can be made there.

But what about the oil? Over the past few years, the United States has become less reliant on foreign oil. We now produce most of our oil in house, exporting far more than we are importing. From 2005 to 2015 alone, U.S reliance on petroleum imports fell from 60% to 25% while exports increased by over 300%.

And even of those imports, Saudi Arabia makes up about 9% of them. Almost half of current imports come from our neighbors Canada and Mexico. Combined with the fact that the U.S is slowly increasing investment in clean energy, one has to ask ‘what the hell does Saudi Arabia have on us’? There is no reason why we shouldn’t be sanctioning the Saudi business community, at the very least for their near-genocidal war against the Yemeni people using our tax dollars. Nor should we play dumb and look the other way with a thug like Salman. The fact that Saudi Arabia’s got dollars invested in AMC, Uber, and Magic Leap shouldn’t prevent us from taking a very elementary moral stance

Airbnb has arrived in the Crescent City.  After the city loosened restrictions on short-term rentals, except most of the French Quarter, it only took a license for homeowners to lease out a room.  By December 2017, in one district near the French quarter, one in 10 residences are registered as Airbnbs.Residents need a license to rent out their spaces up to 90 days a year. In October, the New Orleans City Council is moving toward restricting short-term rentals to commercially zoned areas after about 18 months of allowing “temporary” licenses in residential zones.

In February 2018, a report announced that for 10 cities with the largest Airbnb market share in the US, the entry of Airbnb resulted in just 1.3 percent fewer hotel nights booked and a 1.5 percent loss in hotel revenue. But the economic effect of Airbnb goes beyond the Hotel Industry: one study of 100 U.S. studies showed that a 10-percent increase in Airbnbs causes a 0.4-percent increase in rents.

 

Are all short-term rentals Airbnb-style arrangements in the city? Not necessarily.  The Jung Hotel, a newly renovated hotel on Canal Street has leased 111 residences on the hotel’s upper floors to the short-term rental company Sonder, which uses a smartphone application and an online website for booking. Unlike AirBnB, the only people that ever stay in Sonder apartments are guests. None of the 111 units, which had a price tag of $3,900 and $5,900 per month, ever found renters.

 

Sonder applied and received a hotel licence instead a short-term license, exempting them from the future short-term rental regulations.

 

“We’re a deconstructed hotel,” said general manager of Sonder New Orleans to Nola.com. “”It’s a different expectation of service. That’s why I think we’re the future.”

 

 

But what does the economic future look like for New Orleans and short term rentals? Unlike Los Angeles, San Francisco, or Los Angeles, New Orleans is economic profile is different. The city’s tourism industry accounts for nearly 40% of tax revenue. 18 million visitors spent more than $8.7 billion in 2017, according to the New Orleans Advocate. After Hurricane Katrina,  the city’s rebounding Tourism industry helped bring more people back to New Orleans.

 

Airbnb has shared details regarding the positive economic impact of the business, citing that Airbnb guests “stay longer and spend more in diverse neighborhoods throughout the city.” In 2017, Airbnb said that they delivered  $3 million in fees and taxes for short-term rentals for the city.

However, a study released in July tells a slightly different story about how short term rentals are changing the city. The study, which utilized data from  from the Bureau of Labor Statistics, the Census and Airbnb in addition to Yelp reviews, showed that while  white “Airbnb” neighborhoods saw a growth in restaurant employment, restaurants in black or Latino “Airbnb” neighborhoods did not see a similar increase in employment or Yelp engagement.

 

In New Orleans, the parts of the city that have the highest Airbnb concentration are nearly are nearly 50 percent white, compared with 34 percent in the city as a whole.

In study by Loyola University New Orleans professors John D. Levenis, Ph.D., and Mehmet F. Dicle, Ph.D. from 2015 estimated that the Airbnb’s visitors accounted for 4,480 additional jobs that year, with a total value added to the New Orleans economy of 135 million dollars.

Since deregulation in 2017,  locals say that the economic benefits of Airbnb are speeding up the pace of gentrification in the city as well. An investigation by The Lens and HuffPost reported that though tourism lowers crime rates and and cleaner streets, rising rents and home prices are pushing long-time residents out.

“On our block we didn’t have neighbors; we had guests living on our block Thursday to Sunday,” said Christian Rhodes, a New Orleans resident to Huffpost. “Airbnb kind of guaranteed there would be no families.”

 

Sources:

 

https://www.theadvocate.com/new_orleans/news/business/article_3e30be30-5301-11e8-ac87-2f04ffdf5e01.html

https://unsplash.com/photos/ZofZqMM3UU0

https://www.nola.com/politics/index.ssf/2018/10/sonder_jung_hotel_short-term_r.html