Due to New Orlean's location at the base of the Mississippi River, it led to the city having an influx of immigrants traveling down the river. It was considered a melting pot, or an accumulation of people from all different backgrounds, and this is what helped it develop such a rich and diverse musical heritage. Each of these different cultural groups had styles and customs that were unique, but when fermented with other cultures created a entirely new juxtaposition that worked.
While Jazz was thought to have been created in the brothels themselves of the Red Light district (also known as Storyville and The District) in New Orleans, research by Donald Marquis, a leading expert on New Orleans jazz, found that it was more likely to have started in the cabarets and dance halls that were in the District. (Gioia, Pg 29)
After considering many points to the argument, the most important factor appears to be the great diaspora of people that were forced together in New Orleans. Their ability to work together and compete with each other led to a musical hot bed that was unlike anywhere else in the United States, possibly the world. This urge, or even need to make music led to breakthroughs and edgier music that was played throughout the city to all walks of life, be it a wealthy parlor hall or the dirty lobby in "The District". Influential factors such as the Mexican contribution were also vital, as it allowed the jazz players to have a sense of technic and harmony.
Commented on Ethan Reul's Blog