Spillover effects of business improvement districts on residential housing values: a focus on the northern region in Los Angeles county, California

Abstract

In response to the decline in commercial areas, there has been a growing interest in the implementation of Business Improvement Districts (BIDs) in large developed cities in North America. However, there is limited understanding of whether BIDs have economic effects on surrounding neighbourhoods. This study aims to answer the following research question: do BIDs positively affect nearby residential properties? To analyze the influence of BIDs on the housing market, we examined single- and multi-family home sale transactions between 1995 and 2007 in the City of Los Angeles, California. We employed the Adjusted Interrupted Time Series Difference in Differences (AITS DID) model to analyze changes in both the price levels and trends of housing values, and to establish the causal impact associated with the implementation of BIDs. Our findings show that the implementation of BIDs had a significant impact on the value of properties located within a 1/2 mile of the BIDs in single- and multi-family homes, as well as in low-income neighbourhoods. The findings from this study will provide valuable insights for planners, residents, and local governments to better comprehend the heterogeneous nature of spillover effects associated with BID programs.