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Business Improvement Districts and Housing Markets: Evidence from Neighborhoods in London

Author

Listed:
  • Stefano Cellini

    (University of Surrey)

  • Francisco Nobre

    (University of Surrey)

Abstract

Business Improvement Districts (BIDs) represent an important place-management tool across the UK, investing more than 100 million pounds each year into street safety and other public goods provision for their local neighborhoods. This paper studies the effects of the opening of a BID on local housing markets in London, where the first BIDs started operating in 2004 and more than 20% of the active BIDs in the country are located. We show that BID openings lead to an increase in house prices by around 3%, using property transaction data and BID-level information. We record also an increase the share of new-building sales after the BID opening. We argue that these results are driven by demand effects from neighborhood improvements, since they seem to be driven by BIDs spending more on crime and environment. We rule out housing supply responses to BID openings using administrative records on housing planning applications. In the longer run, blocks exposed to BIDs activity present gentrification trajectories as they lower their share of social renters, BAME and unemployed residents to a greater extent compared to non-affected blocks.

Suggested Citation

  • Stefano Cellini & Francisco Nobre, 2023. "Business Improvement Districts and Housing Markets: Evidence from Neighborhoods in London," School of Economics Discussion Papers 0523, School of Economics, University of Surrey.
    • Handle: RePEc:sur:surrec:0523
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    File URL: https://repec.som.surrey.ac.uk/2023/DP05-23.pdf
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • R28 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Government Policy
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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