The Impact of Business Improvement Districts on Property Values: Evidence from New York City
Since World War II, most cities in the United States have lost a substantial share of their businesses to the suburbs, and their tax bases have suffered as a result. The formation of Business Improvement Districts (BIDs) is one strategy that city governments have adopted to counter this long-term trend. Despite the proliferation of BIDs--by 1999, there were an estimated 800 BIDs worldwide--very little work has been done to measure their effectiveness. This paper examines the impact of BIDs on commercial property values in New York City. New York has 55 diverse BIDs that encompass a broad range of budget sizes, services and locations. This variety, together with the city?s tremendous size and diversity of neighborhoods, allows the authors to examine the impact of BIDs in very different types of areas. The analysis provides insight into the underlying mechanisms through which BIDs influence property values and the circumstances under which BIDs may be a useful tool for local economic development.