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Do Improvement Districts Cut Crime?

LOS ANGELES business improvement districts (BIDs) experienced a greater decline in crime than other areas of the city. A new study from the RAND Corporation finds that while Los Angeles has seen a decrease in crime overall, its BIDs experienced larger drops in crimes such as robbery and a greater overall decline in violent crimes when compared with non-BID areas. BIDs are defined commercial areas where business owners pay an additional tax that is used to fund the BID programs to improve the community through various means.

The RAND study looked at crimes officially reported to the Los Angeles Police Department (LAPD) and compared the crime decreases in BID areas with the overall city crime decreases. The findings included an additional 12 percent drop for robbery in BID areas and an additional 8 percent drop for violent crime.

The results shouldn’t be taken to mean that BIDs are a panacea to the city’s crime problems, says the study’s coauthor John M. MacDonald, a University of Pennsylvania criminology professor. He stresses that each BID environment is different.

“The crime reduction benefits from BIDs weren’t uniform. They depended on not just the operating budget—where they were spending, the priorities of BID spending—but also the neighborhoods in which they’re situated,” says MacDonald, adding that some BIDs spent more money on public safety, while others were located in neighborhoods that had already gone through significant economic revitalization. MacDonald stresses the importance of looking at the needs of the BID community and the areas the BID is investing in.

There is also the possibility that communities that are more likely to adopt BIDs are also more likely to foster the types of changes that lead to crime reductions in general. “The BID is an important mechanism, but there’s an underlying willingness in that community of business owners and property owners to be engaged,” says MacDonald.

Many of those involved with BIDs aren’t surprised by the findings. “Basically, it’s like a sort of formalized Neighborhood Watch program. And it really has the community acting as the eyes and ears of the Los Angeles Police Department,” says Kent Smith, executive director of the LA Fashion District BID, which puts more than $1 million into its BID each year. The money helps the BID hire private security officers and implement other measures.

Though all agree that any crime reduction is a welcome change, some are not convinced that BIDs are the best way to bring such change about. For example, Moshe Adler, a Columbia University economics professor and the director of economics consulting firm Public Interest Economics, is concerned that BIDs, by privatizing security funding, may essentially push crime to communities not able to fund such efforts.

RAND looked at the possibility of displacement of crime, but MacDonald says that the group did not find any evidence of it. However, Adler is still concerned that BIDs contribute to an inequality of services in cities. “We are creating a system that unless you can pay for cleaning your own neighborhood, your neighborhood will not be clean,” he says.

Peter D. Salins, a senior fellow at the Manhattan Institute think tank, agrees that because BIDs come with a tax increase for funding, it is more likely that wealthier neighborhoods will be able to form BIDs.

Adler adds that “wealthier neighborhoods usually have more political power than other neighborhoods. So, if a neighborhood gets clean streets from the BIDs, then this neighborhood is not going to pressure the city to provide better cleaning services, because they are already getting clean streets…. So, basically, what the BIDs do is they break the city into individual areas. Where the wealthy live is safe and clean. And where the poor live, nobody cares.”

Policymakers should not look at BIDs as a quick-fix solution, says MacDonald. But, he adds, the evidence that BIDs offer a public-private partnership option for improving a locality’s security is “pretty compelling.”