Are BIDs a Smart NYC Real Estate Gamble?

Written By Phil Ryan | October 10, 2011
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As anyone who has ever set foot onto the island of Manhattan can attest, the number of neighborhoods is simply staggering. Even more complex is the intricacies with which they interact; while it’s easy to separate Midtown from the Upper West Side, a newcomer to New York City may not even notice the difference between SoHo and NoHo. Although nearly every Manhattan neighborhood has its own identity, some subtler than others, the occasional boundary blurring can be confusing to say the least, sometimes hurting what New York Magazine refers to as the “microneighborhood” trend. In an effort to stem this problem, the New York City Economic Development Corporation has created several business improvement districts, or BIDs, aimed at improving the identities and focusing development within particular neighborhoods, especially in the context of revitalization or regeneration.

The New York City Department of Small Business Services defines a business improvement district as a “formal organization made up of property owners and commercial tenants who are dedicated to promoting business development and improving an area's quality of life.” As a result, BIDs are a means of centralizing development into particular neighborhoods or corridors, making citizen participation in new development easier and more accessible than it traditionally has been. This is made possible through the collection of a small additional fee from owners within a given BID, providing a dedicated funding source separate from the New York City government.

What is perhaps more interesting about the BID phenomenon is that its results go far beyond their initial purpose. Although the EDC’s primary objective is for commercial development in neighborhoods or corridors, this simplified mission neglects to mention that New York City, in particular Manhattan, is the ultimate mixed-use city in America, with single uses predominating only on side streets, sandwiched between commercially-based avenues, often with residential units stacked above. In turn, increased commercial activity leads to residential development, often in the form of luxury condominiums and rentals, further aiding businesses in the district.

BIDs as far-reaching as 125th Street in Harlem, the Bryant Park Corporation, the Village Alliance, and the Alliance for Downtown New York have all worked diligently to increase neighborhood recognition and reduce retail and other commercial vacancy rates, all the while spurring luxury, usually mixed-use, development across Manhattan in a variety of historic and contemporary neighborhoods alike. While it is nearly impossible to fully quantify the benefits of New York City’s BIDs, what is obvious is that for a small price, almost any area can create its own identity and, in the end, flourish.

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