Expert Commentary

Business improvement districts: Impact on public safety within BIDs and in nearby areas

Research by the University of Pennsylvania, the RAND Corporation and Drexel University on the impact of BIDs on robberies and violence, both within BIDs and in neighboring areas.

While thousands of business improvement districts (BIDs) are found around the world today, the concept is in fact a relatively new one — the first, in Toronto’s West Bloor Village, was established only in 1970. Before then, voluntary business associations abounded, but were constantly faced with the classic “free rider” problem — firms that didn’t take part still reaped the advantage of the association’s work. BIDs solve this issue through their status as a public-private partnership with formal authority over a defined geographic area. Once a majority of businesses elect to form a BID, all owners or occupants within the area must contribute.

As noted in a 2007 MIT paper, this authority gives BIDs “considerable autonomy in problem-solving.” Services can include street cleaning, marketing and adding pedestrian amenities, surveillance systems and more. Such improvements have been credited with turning many troubled neighborhoods around, but BIDs generate controversy as well. For longtime residents, they can be seen as drivers of gentrification, and their growing power raises questions about their accountability and inclusiveness — board members are drawn from the commercial sector, with ordinary citizens able to do little other than protest decisions they don’t like.

The security services that BIDs provide are often a flashpoint of disagreement between residents, businesses and visitors, and their effectiveness has been the subject of considerable research. A 2009 study by the RAND Corporation found that BIDs in Los Angeles significantly reduced crime, but similar reductions happened nationwide and in areas without BIDs at the same time.

Four researchers — John MacDonald of the University of Pennsylvania; Daniela Golinelli and Ricky Bluthenthal of the Rand Corporation; and Robert J. Stokes of Drexel University — have looked at the advantages and disadvantages of BIDs in a number of studies. In their 2010 study in Injury Prevention, “The Effect of Business Improvement Districts on the Incidence of Violent Crimes,” the authors looked at before- and after-data on 30 BIDs in Los Angeles, as well as control neighborhoods without BIDs. The findings include:

  • In the areas and time period examined, robbery counts showed a consistent decrease. However, while the drop was 5.7% in areas outside of BIDs, those within BIDs showed a 7% reduction. “During the 12-year period, however, the average yearly count of reported violent offenses dropped by 58% for Los Angeles as a whole, suggesting that it is important to take into account this secular trend in assessing the effects of BID on violent crimes.”
  • The simple existence of a BID was not consistently associated with reduced violence. Instead, BIDs that spent the most on beautification and crime-prevention efforts showed the greatest decrease in crimes. “The overall effect of BID on robberies is consistent with the efforts [expended] on improving the physical appearance of their areas to make them more attractive to commercial business and less attractive to potential offenders (e.g., painting over graffiti, increased street lighting, closed-circuit television, or CCTV, cameras).”
  • The change in robberies varied across the BIDs examined, but overall, neighborhoods that had had the greatest level of economic development or that had invested heavily in crime prevention had the largest decreases in robberies. These efforts are expensive, however: “Approximately 13 of the 30 BID in Los Angeles spend more than US$200,000 a year on such ‘clean’ and ‘safe’ efforts.”
  • On average, implementation of a BID in Los Angeles was found to reduce per-year robberies by 12% and violence by 8%. The researchers estimate that the reduced number of robberies resulted in marginal cost savings of approximately $757,611 annually. “Given that the average annual budget of the 30 BID in Los Angeles was approximately $736,670, this suggests that a sizeable social-cost benefit of BID implementation can be attributed to the reductions in robbery alone.”

In a follow-up 2013 study in Law & Society Review, “The Privatization of Public Safety in Urban Neighborhoods: Do Business Improvement Districts Reduce Violent Crime among Adolescents?” the four researchers looked at the possible “spillover effects” of BIDs. The findings include:

  • While BIDs were found to reduce crime within their immediate boundaries, they had no significant effect on nearby communities. “BIDs are not associated with a decrease in violent crime among youths living near BIDs compared to youths living in other neighborhoods matched on key structural conditions that are known to predict violent crime. These results suggest that BIDS do not produce systemic neighborhood change that improves violence outcomes for youths in and around BID areas.”
  • Household characteristics could have a significant effect on the odds of residents being the victim of violence within the area studied. “Residing in an immigrant household reduces the odds of violence by 45% compared to those of nonimmigrants. Youths with increased bonds to family and school are also associated with less victimization.”
  • The non-democratic nature of BID structures can create serious problems for residents, especially those that do not own property. “BID board members typically consist of commercial landowners, merchants, elected officials, and local resident groups…. In some states, individual votes are weighted by the value of their property, or the size of their BID assessment fee. In short, the BID voting structure can deprive local residents of equal representation in quasi-governmental decision making.”

“While other research suggests that the adoption of BIDs leads to measurable reductions in officially reported crime within BID areas, these crime reductions may not affect the lives of youths and families living in or around them,” the researchers state. “Our study shows that understanding the broader neighborhood dynamics of the areas in which BIDs operate is more important for their roles in creating change than the simple adoption of BIDS.”

Related research: A 2013 study in Urban Affairs Review, “The Postindustrial City Thesis and Rival Explanations of Heightened Order Maintenance Policing,” examines the relationship between an area’s economy and its policing style. The author, Elaine B. Sharpe of the University of Kansas, looks at 180 cities with a population of 100,000 or more; she analyzes arrest rates and charges, governing institutions, policing demands and constraints, and variables representing the “racial threat” thesis — that the increased presence of minorities can trigger intolerance and greater attempts at social control. She finds that there is a strong relationship between the degree to which a city’s economy is postindustrial and oriented toward the creative class and the emphasis on social-control policing, and the greater the share of 18- to 24-year-olds in the population, the greater the emphasis on social control.


Keywords: crime, violence, youth, property, business, urbanism, criminal justice, public/private partnership (PPP),  safety, California

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