Wednesday, 18 April 2012

Business Improvement Districts

Some lessons for Portas Pilots and other attempts to 'turn around' UK high streets from an interesting piece in the Journal of Urban Economics on which businesses choose to take part in Business Improvement Districts: "Business Improvement Districts (BIDs) provide supplemental services to urban commercial corridors using funds from member assessments. They have become a very popular urban revitalization tool, but their formation is still largely unexplained. [...] I find that BIDs are more likely to form when there is more commercial space over which the BID benefits can be capitalized and when there is homogeneity in service and spending preferences across properties. BIDs also tend to form in neighborhoods that possess signs of appreciation and growth. Generally, BIDs are more likely to form in neighborhoods with higher valued properties with the exception of very wealthy areas. The BID boundary, however, is comprised of relatively less valuable properties."

In other words BIDs are most likely to form in established neighbourhoods showing some appreciation (so not great for turning round decline); a critical mass of more valuable properties are needed to ‘anchor’ the bid; and property homogeneity helps (because know you are going to get the kind of services you want).

[Update: Pre-publication version available here]