I love when people start doing this sort of thing for genre literature! I feel compelled to jump in here and add that while, yes, Holly Block is probably the most influential writer of fae romance novels of the past few decades, she really cannot be considered the initiator of this subgenre - fae romance was already an increasingly common and popular style of romance in the late 90s and early 00s. The earliest one that comes to mind for me is O.R. Melling's Chronicles of Fae series, starting with Hunter's Moon, which was published in 1993; this was back when romantic YA marketed explicitly to teen girls / young women was just beginning to become a popular category. I also have to note that Butcher is not the codifer of the Summer & Winter Court motif in modern fantasies about faeries - this is an older preexisting trope that shows up in Melling as well (the second book of her series is The Summer King, for example, published in 1999), and can probably be traced back to New Age & contemporary pagan / Wiccan ideas about older Celtic mythologies (which itself likely has at least some loose basis in historical ancient druidic religions etc, but I fear I don't have the necessary scholarly background to assess precisely how much.)
I find it interesting that you can really see the difference in reader expectations in a book like Hunter's Moon - Melling can't rely on people already being familiar with 'standard' fairy romance tropes, so she's doing a lot more work to create and build up the surrounding mythology than you see in current publications (and basing it off a great deal of actual historical mythological and folkloric sources) - and the result is a much more grounded and compelling setting, to my eyes. Though I'd have to reread the book to verify this, my memory of Melling's series was that it owed a pretty clear debt to earlier low fantasy YA-adjacent series like Susan Collins's The Dark is Rising (about Arthuriana myths recurring in a modern urban setting; first book published in 1965), and that the author had probably also at least read some of Guy Gavriel Kay's Fionavar Tapestry series (a portal fantasy about a group of college students getting sent to a Tolkienesque, Arthuriana-inspired high fantasy world; first book published 1984). So I would link some of the earliest versions of this trope to the growing popularity of Arthuriana retellings in a low fantasy mode.
The explosion of fae romance within YA specifically is also fairly co-terminous with the explosion of YA itself, which took off around the 2000s in large part due to tailwinds from the Harry Potter (first book 1997) and Twilight (2005) booms. (I would probably trace romantasy as a direct descendent of YA more than of any other genre.) Note that Twilight was not just urban fantasy but specifically a YA paranormal romance, which was also becoming a huge category within the adult romance industry at around the same time. The early 2000s are when you get paranormal romance novel writers like Nalini Singh, Kelly Armstrong, Patricia Briggs (who could also be fairly called an urban fantasy writer with a large dose of romance), Laini Taylor, and Kresley Cole etc all taking off; most of the paranormal romances out there began with more traditional vampire & werewolf stuff, but a lot of them start getting very eclectic and 'anything goes' with their mythological references in much the same way Jim Butcher does. (Note that the first Harry Dresden book comes out in 2002, and the first Nightside book - a very similar noir urban fantasy - by Simon R Green in 2003; these authors are all influencing each other, yes, but also all responding to the same trends at more or less the same time.)
Before these authors, the first genuinely popular paranormal romance writers I know of are Tanya Huff's Victory Nelson series (1991), and Laurel K Hamilton with her Anita Blake: Vampire Hunter series (1993). Hamilton was in turn extremely influenced by, who else, Anne Rice & her Interview with the Vampire, from all the way back in 1976. Huff herself is also writing in the shadow of Rice, but I think even more than Hamilton owes a debt to the low fantasy tradition of 'fantasy noir,' ie fantasy in the style of noir mysteries like Raymond Chandler's or Hammett's - you see this influence in 70s authors like Roger Zelazny, who was writing from the intersection of high fantasy & 'sword & sorcery' Conan the Barbarian style low fantasy, which is linked, fascinatingly, to the rise of the 'fantasy hero as hardboiled PI' trope. I've heard this can be traced to works like Leiber's The Swords of Lankmar (1968) and Cook's Garrett PI series (1987), neither of which I've read - but this is how you get Huff's hardboiled PI heroine investigating & romancing various handsome supernatural creatures in the 90s, which in turn is how characters like Butcher's Harry Dresden arrive on the scene. Anyway, Hamilton's subsequent Merry Gentry series is one of the first adult fae romances out there, & it started publishing in 2000.
Wen Spencer's 2003 Tinker seems like another key step in the development of the fae romance trend, I agree! I would suggest that Tinker in turn seems very influenced by Mercedes Lackey's SERRATed Edge series (first book published 1992), about magical Tolkien-esque elves living in modern society & engaging in hobbies like car racing, wooing mortal women, etc. (Older fantasy romance authors like Mercedes Lackey are underrated as influences in the current romantasy explosion, imo.) Charles de Lint also kicks off his Newford series with its first book, Dreams Underfoot, in 1993, which I would argue is probably one of the major influences on Butcher & other urban fantasy writers in terms of the sort of classic urban fantasy setting, ie a bunch of magical / fantastical beings from diverse & contradictory myths jostling uncomfortably together in a modern Western city. (Neil Gaiman also copies de Lint fairly shamelessly in American Gods and Neverwhere.) As far as I'm aware, de Lint is the one of the earliest authors to invent this kind of location as a permanent basis for an ongoing series. Holly Black's first book, the fae romance Tithe (2002) owes quite a bit to de Lint, and I think probably also made it to publication in part due to Hamilton's making the fae romance trend relevant via her own Merry Gentry series.
I wasn't aware of Terri Windling's 1986 Borderland series before, so I'm glad I've stumbled across it because of this post! A glance at the authors who wrote for this anthology is pretty interesting - Charles de Lint is published in it, as is Ellen Kushner and, later on, Patricia McKillip and Steven Brust, all of whom are major fantasy writers of the late 20th c. McKillip is a writer best known to me as one of the group of authors who first started to popularize the 'fairy tale retelling' as a distinct form of fantasy in the 80s and 90s, along with people like Gail Carson Levine (Ella Enchanted, 1997), Robin McKinley (Beauty: A Retelling, 1978), Patricia Wrede (Dealing with Dragons, 1990), Juliet Marillier (Daughter of the Forest, 1999), and Tanith Lee (Red as Blood, 1983).
So I would make the inference from this connection that the earliest forms of paranormal / urban fantasy are developing in relation to the popularization of the 'gritty' or 'dark' fairy tale retelling that starts to take off in this era (along with the similar but lighter 'fairy tale satire' which is more in line with what Wrede is doing, for instance; think also Shrek), and that this is directly related to the newfound popularity of writing about faeries who are tall, dangerous, inhumanly beautiful, immoral or amoral, & thus appealing love interests - as opposed to the kind of classic, bowdlerized Victorian / Disney version of fairies as small friendly cutesy creatuers with wands & flowers etc. (Terry Pratchet is doing something similar in his 1992 novel Lords and Ladies, where much of the humor derives from the contrast between the characters' expecations of elves and the unpleasant reality they encounter.) The same cultural push to create 'realistic' adult versions of children's fairy tales seems to be behind some of the earliest books about faeries in urban fantasy settings.
(I think it's also helpful to keep in mind that the elf vs faerie distinction is more or less a modern invention - these aren't really discrete categories in most of the historical mythologies they're derived from, and of course the modern concept of the 'fantasy elf' is pretty much entirely due to Tolkien, who was himself working from essentially the same body of myths that people later went back to in order to reinvent cutesy Victorian faeries as sexy fae lords. As you note above, older anglophone literature often uses 'elf' synonymously with faerie! Obviously this is a bit of a simplication & the divergences between Germanic versus Celtic folklore etc are real - but that's more a matter of interest to actual folklorists. The takeaway is, when Mercedes Lackey or Wen Spencer write about urban fantasy elves, they're often pulling from a similar mélange of source folklore as other contemporary authors writing about the fae. It's all more or less the same trope, imo.)
Anyway, then Melissa Marr's Wicked Lovely series publishes its first book in 2007, and this is, I would say, where the tropes of fae romance that are most popular today really become codified - this is an explicitly romantic YA urban fantasy series about high school girls falling in love with various faerie kings and lords, and the plot beats I think will be pretty recognizable to anyone reading contemporary books in this genre today. Holly Black's later The Wicked Prince series is definitely, to some degree, in conversation with Marr (who of course was in turn writing in conversation with Black's earlier Tithe when she created Wicked Lovely).
All of which is to say that I think it's correct to point to urban fantasy as an influence in the development of the 'fae lord' as a classic romantasy love interest today, but it isn't quite fair to call urban fantasy the 'source' of tropes about the fae - because urban fantsy itself developed in tandem with paranormal romance, which was in turn strongly influenced by straightforward fantasy authors like Patricia McKillip and Susan Collins. I would argue that the real innovation that Sarah J Maas made in turn was to take what was already, by 2015 (when A Crown of Thorns and Roses was published), the extremely well-known paranormal romance trope of the 'fae lord' love interest, and move him out of the urban fantasy setting back into a high fantasy world.
It's the combination of classic high fantasy stakes and setting (every major character is a king or a lord or a general or a royal advisor! their actions have consequences for thousands upon thousands of innocent nameless subjects! everyone bows & curtsies a lot! the continued existence of the world is always somehow in need of saving yet another time! etc) with the narrative tropes of paranormal romance, in particular (every aspect of the plot revolves around the heroine and her romantic choices & desirability! every man she meets is doomed to love her! every problem can only be solved via the correct utilization of her unique magical abilities, ancestral inheritance, piercing insight, or innate personal virtue! which i say with amusement & affection, not scorn), that makes 'romantasy' a distinct genre, imo. Romantasy is the importation of the paranormal romance plot into a high fantasy world. And that's essentially what Maas invented with her fae romance series.
So in summary, I would argue there are two threads here: one is the paranormal romance, which I trace back to originating authors like Hamilton and Huff, and which is strongly influenced by Anne Rice's take on vampires on the one hand, and by the low fantasy 'noir' trends popularized by writers like Glenn Cook and Roger Zelazny (Simon R Green is an early 90s trendsetter for this kind of thing, as well) on the other. Thus all roads lead back to Anne Rice (obviously) and also to Raymond Chandler (less obviously but more or less inevitably for any American author - and the British are not immune! look at Pratchett's Night Watch). I would classify this thread as the stylization and codification of horror, grit, cynicism, urban grime, etc in a fantastical / supernatural context - things that used to be regarded as frightening, inappropriate, ugly, unspeakable, or otherwise transgressive, like murder and corrupt cops (see: Chandler) or scary monsters from folklore committing thinly-veiled metaphors for sexual assault (see: Rice).
This becomes the standard spooky, gritty, cynical, hardboiled vibe for a lot of early books in the paranormal line. The prevalent attitude is basically 'you thought werewolves were a silly children's story? jokes on you! this werewolf is about to eat your face &/or attempt to sexually assault you' (and of course, in the explicitly romantic books especially, this is all highly eroticized). As happens with all tropes, the original transgressive sources of these vibes are eventually lost until only the vibes remain, and we end up with things like the trope of the paranormal PI main character with no clear explanation for why except that 'it's paranormal, of course you need a PI hero' or 'it's paranormal, of course you need a vampire love interest.' Faeries thus become incorporated here as another instance of the seemingly harmless child's story that are, in the story's mythbusting 'reality,' highly dangerous, scary, & socially liminal figures, & thus capable of filling essentially the same narrative role as the vampire or werewolf lover.
The other thread is the urban fantasy setting itself, which is what revitalizes the modern concept of the faerie as a potential style of love interest in the first place, and this I would trace to late 90s - early 00s YA like Melling's faerie series, which draws from Arthuriana and Celtic mythology - and again, dating to 1993, is the earliest publication of explicitly romantic fae novels that I know of (as in the romance is a large chunk of the main narrative, and not just a subplot). (The separate but related notion of dropping your characters into a hodgepodge of conflicting myths and enjoying the chaos as a storytelling method I think is also coming into popularity at the same time via authors like K.A. Applegate in her very underrated 1999 Everworld series, a truly and delightfully insane YA portal fantasy involving, yes, dangerous faeries.) Melling is writing in turn at the same moment that Charles de Lint's urban fantasies are coming out, and both authors are influenced by the popularization of the 'fractured fairy tale' retelling taken up by many major female fantasy authors of the late 20th c. - all of which blend together in a lot of interesting weird ways in the 90s and then play a major role in shaping the YA boom of the 2000s. The role of Arthuriana retellings in the works of writers like Susan Collins and Guy Gavriel Kay I think is also important (both of whom have also, amusingly, admitted to being directly influenced by Sir James Frazer's iconic 1890 work of late Victorian anthropology, The Golden Bough, thus confirming my personal conspiracy theories re: all modern literature. But that's beyond the scope!)
The style of love interest that emerges from this thread is, at least originally, somewhat more in line with much older legends about faeries taking mortals as lovers - that is, these are highly aestheticized and romanticized narratives (as opposed to the 'grit' of early paranormal) that nonetheless derive most of their tension and suspense from the impossibility of any mortal truly being able to trust or rely on a faerie, who are depicted as inherently capricious, inhuman, unfeeling, and unreliable lovers. (Think of the faeries playing games with the mortal characters in A Midsummer Night's Dream - not quite actively malicious, but certainly high-handed and careless enough to feel that way to their victims.)
In the hands of 2000s and 2010s writers like Holly Black, Julie Kagawa, and Melissa Marr (all of whom I would read as some of the direct antecedents to Maas, especially Marr) this narrative merges with the tropes of the paranormal romance to create a kind of gritty fairy tale romance, with fae love interests who take on the narrative role traditionally played by vampires in, for example, Twilight - powerful and compelling supernatural figures who, because of their fundamental nature, pose a danger to the female heroine they are inevitably in love with. (Vampires inherently want to drink your blood! Werewolves inherently want to eat you! Faeries inherently want to fuck with you just for the sake of it! Which makes a human woman attempting to romance any of them inherently fraught & dangerous, & therefore a structurally interesting premise for a romance novel. And, of course, the metaphors for the difficulty of regular human heterosexual romance abound.)
The appeal of the faerie lover specifically over the vampire or werewolf is, I think, that the faerie still retains some of the wondrous, fanastical, romantic glamor by which we tend to define high fantasies and classic fairy tales more generally - they can be magical, capital r Romantic figures in a way quite distinct from the gritty, noir-coded, 'realistic' supernatural appeal of the vampire as depicted in paranormal romance. So the resurgence in popularity of fae lord love intersts today over the vampires or werewolves of the previous decades we might put down to a broader cultural turn away from a kind of emphasis on realism, cynicism, low fantasy 'punk' aesthetics etc, and towards a desire for more idealistic or romantic (or, in the cynical view, more sanitized) narrative figures - which is also, perhaps, echoed in the current parallel surge of the popularity of romantasy over the older paranormal romance.
I think there's also something worth unpacking in the transition from the popularity of socially liminal paranormal love interests like vampires, werewolves, etc - all of whom, in urban fantasy / paranormal settings, tend to explicitly exist in various underworlds, demimondes, on the margins of real or normal society, & so on - to today's version of the romantasy fae lord, who has been transformed from his original urban fantasy character (where, again, he essentially fulfills the same narrative function as the vampire - mysterious, dangerous, liminal, beyond the bounds of the real) into sort of the opposite of a socially marginalized role. Instead of living in the fantasy demimonde & concealing his true nature as a faerie from society etc, the romantasy fae lord (who in most romantasy I've seen - ie the Maas version - is functionally just a pop version of a Tolkien elf; there's very little of actual faerie mythology remaining in these depictions) is fully socially integrated into his world, & inhabits a role of overt social & political power - he's literally a feudal lord. So what's being eroticized & romanticized is no longer transgression or 'the outsider' in any sense, but rather a much more traditional (some might argue regressive) figure of inherited, established (& necessarily masculine) authority. It's a really interesting shift, anyway!
*post script: I'll also add that the various permutations of 'soulmates' and 'mated lovers' & the relentless tendency to call people 'males' & 'females' etc in romantasy I believe comes almost entirely from Maas, who in turn is getting it pretty exclusively from older high fantasy paranormal mashups like Sherrilyn Kenyon's Hunter Legends series (1999) and Wilson's Lord of the Fading Lands series (2007). (So for example the Wilson series is, to the best of my memory, about an immortal shapeshifting dragon king & his romance with his reincarnated true love / fated soulmate, a human woman; I do acknowledge that I read it a very long time ago & so may be wildly misstating the plot - the jacket summary calls him a 'Fey King,' which I simply don't remember at all, but seems even more suggestive!) Anyway, these are all popular tropes in this kind of fantasy romance, & as far I'm aware don't really have much to do with the incorporation of faeries as love interests specifically - it's just a sort of intersection of Maas's particular writing habits & the paranormal romance tradition that shaped them.
*post post script: a little more browsing led me to Emma Bull's War for the Oaks, published 1987, which according to Wikipedia is in fact one of the earliest instances of urban fantasy & is also, serendipitously, a faerie romance. Cool! Anyway this seems relevant for those interested in the timeline; I haven't read it myself & thus can't especially comment on its role in the development of the genre, however, beyond noting the fact that it too seems to be taking much of its fantasy & fae references from pre-existing Celtic & British folklore.
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