From BIDs to RIDs: Creating Residential Improvement Districts

This Policy Comment provides examples of failed development attempts of the past and describes how Business Improvement Districts (BIDs) have overcome similar problems and succeeded.

Business Improvement Districts (BIDs) are special geographically defined zones that are authorized to collect taxes from their members and manage those revenues to serve a variety of purposes.  Compared with other urban redevelopment approaches, BIDs have had relative uncontroversial success as they address the collective-action problem faced by area businesses seeking urban renewal.

This collective-action problem extends beyond businesses, however, and the same BID concept can be applied to urban residential neighborhoods.  Given that the needs of the inner-city poor are certainly as great as—if not greater than—those of urban businessmen, this Policy Comment suggests that Residential Improvement Districts (RIDs) could be a successful remedy for varying urban neighborhood problems.  As no legal mechanisms for establishing RIDs currently exist, this Policy Comment urges states and municipalities to act promptly to enact the necessary authorizing legislation that would allow RIDs to exist and thrive.

Citation - Chicago Style 

Nelson, Robert,  Kyle McKenzie, and Eileen Norcross. "From BIDs to RIDs: Creating Residential Improvement Districts." Mercatus Policy Series, Policy Comment No. 20. Arlington, VA: Mercatus Center at George Mason University, May 2008.