The presence of improvement districts across in cities across the world has been increasing since the 1970’s. But what are they, why are they created, and which policies make for success?
Improvement districts go by many names, largely dependent upon location. These names include community improvement districts, business improvement districts, and innovation districts. While these districts hold different names in title, they typically share most qualities. Improvements districts are a form of public-private partnership, whereby government entities and private actors share responsibility. Districts are formed by citizens, who receive approval to implement additional self-taxing power on residential and commercial property owners in a given contiguous area within a municipality. The district then creates an advisory board to oversee organisational and financial duties.
In New York City there are currently 76 improvement districts across the city, with one or more district being created in the majority of years since the first one was implemented in 1976. Improvement districts in New York City alone disperse approximately $167 million annually in funds across all five boroughs, and serve areas that are home to around 100,000 individual businesses. In New York City, each improvement district is required to be governed by a Board of Directors, which must include local elected officials, residents, merchants, and property owners within the district. Similar districts can be found in cities that include, but are not limited to, London, Toronto, Johannesburg, Washington D.C., Buenos Aires, Los Angeles, and Brussels.
Why are Improvement Districts created?
Improvement districts are implemented by residents and property owners of a city to provide additional services to communities through efficient means. Funding is used by improvement districts to provide services, which can range from capital improvements, road and transit maintenance, street and sidewalk cleaning, public safety implementation, and community event organisation.
Communities that want to either address specific issues facing the local area or improve upon the current state of a neighborhood may create improvement districts. Improvement districts are designed to respond to these needs faster than the centralised city government may be able to respond, and residents and property owners are expected to have greater information about and oversight of the implementation process of district activities.
Are Improvement Districts innovative or harmful?
Supporters of Improvement Districts typically point to the increased efficiency, financial support, and autonomy that improvement districts have. By allowing residents and property owners in smaller areas of a city to work together to provide additional services, supporters believe that improvement districts give more power to communities and serve their distinct needs. Detractors tend to perceive improvement districts as anti-democratic and harmful to small businesses and local residents. Improvement districts are viewed as powerful groups that control significant resources, reshaping communities against the will of those that do not agree with their decisions.
Which policies make for a successful Improvement District?
Since improvement districts serve diverse localities and stakeholders, it can be difficult to devise one-size-fits-all policies. However, certain measures can be taken that assist in the transparency, efficiency, and equitability of improvement districts. There are three areas in which local government can pass regulations and work with improvement districts.
First, cities should require transparency from improvement districts because they are both representatives for the people of a given community and for the local government. Since the allocation of funding and strategic decisions of improvement districts affect the lives of not only business owners, but residents of the area, local government must ensure that it is the duty of improvement districts to provide open and honest information to all property owners and residents of the district, as well as local government officials.
Second, cities should require that all residents in a district be allowed to vote on and veto certain measures. Local governments without clear laws and regulations for the basic decision-making abilities of improvement districts leave room for districts to be closed off to many who are stakeholders in the outcomes of district decisions. Cities should take initiative and ensure that district residents hold the ability to have a voice in the decision-making process of improvement districts. This helps protect residents from the possibility of their views being ignored by improvement district representatives.
Finally, cities should provide equal funding opportunities for improvement districts. In some cities, improvement districts are eligible to apply for limited-terms grants. Only a few districts are selected and funding allocation is determined by a grant committee. These grant systems hinder fair local government practices. Instead, if cities implement funding systems for improvement districts, funding awards should be allocated equally to provide all communities with fair access to local government provisions.