• The first BID was created in a neighborhood in Toronto in 1965, but the concept was slow in proliferating in Canada as well as in the United States.

• Part of the reason for the slow emergence of BIDs in the U.S. can be attributed to the popularity of urban renewal strategies during much of the 1970s which razed rather than enhanced many existing downtown neighborhoods and old commercial districts.

• Since 1990, BIDs have been growing at a more rapid rate, with an estimated 1,200 BIDs now located throughout large, medium and small cities and towns throughout North America.

Background
Why did BIDs emerge?

Business Improvement Districts (BIDs) represent the latest organizational response to the changing dynamics of metropolitan areas over the last twenty years, a time period that has marked the decline of downtown businesses and neighborhoods.

Since the 1970s, the proliferation of suburban commercial centers and highways have lured the majority of potential shoppers away from traditional central business districts to the suburbs, causing municipal governments to lose crucial tax revenue.  In many cases this loss was reflected in the deterioration of the urban landscape due to the lack of funds for maintenance and improvements.

The competitive advantages of downtown shopping areas—history, unique stores and human-scale infrastructure—were no longer enough to draw auto-dependent suburban residents away from mega-malls that offered one-stop shopping for the entire family. In addition, shoppers came to expect the amenities provided by these new shopping centers, such as free and ample parking, climate controlled environments and a visible private security force that offered the aura of safety.

Since most public agencies continued to lack the funds or political will to improve the appearance and competitiveness of older shopping districts, a new strategy for raising revenue based on “self-help” and the formation of a new structure to deliver services became the ideal solution for many downtown neighborhoods.

However, the significance of allowing a private interest group to control a public good has evolved into a legitimate public policy issue as BIDs take over management of many urban areas across the country.