This problem is not limited to California, nor is it new. BIDs have engaged in these practices since they began to spread in the 1980s, a period that — not accidentally — coincided with the rise of modern homelessness.
The history of BIDs in New York City exemplifies the connection between the two. During the 1980s, as a result of diminishing affordable housing and cutbacks to a variety of social services, the city’s homeless population grew into the tens of thousands. Homeless individuals also spread from the traditional “skid row” area in the Bowery to locations throughout the city, including prominent business districts where BIDs were beginning to form.
Officials didn’t have homelessness in mind when they initially permitted BIDs in the early 1980s. They hoped real estate owners would help improve commercial areas through organizing promotional activities and providing supplemental services such as street cleanings. But owners and businesses, alarmed at the growth of homelessness and fearing it would chase consumers away, also began to use BIDs to shape the response to homelessness.
In the area around Grand Central Terminal, for example, property owners in 1985 formed the Grand Central Partnership, which soon became the city’s largest BID. Frustrated by transit and municipal officials’ seeming inability to stem the growth in the number of homeless people in the terminal and surrounding area, the partnership used its resources and influence to shape sterner and more punitive responses to homelessness. The group worked with transit officials to develop new rules targeting the homeless population in the terminal, including banning washing or changing clothes, lying down or taking up more than one seat —— policies soon adopted by other major terminals and in the subway system. To help enforce these rules and lessen the homeless population in and around the terminal, the partnership built its own security force, which by 1989 consisted of 30 members at a cost of $1 million a year.
Such private security forces became a defining feature of BIDs. By the early 1990s, the city’s two dozen BIDs spent the largest portion of their aggregate budgets on security, coordinating teams of private guards in business districts throughout the city. By that time, the partnership force had doubled to 60 guards. And BIDs in Times Square and near Penn Station employed 40- and 50-person private security forces.
The constant aggressive policing of these areas drove homeless people to seek refuge in parks. But BIDs and similar private sector-led groups met them there as well. For example, as the homeless population in Union Square Park rose in the early 1990s, the 14th Street Union Square BID shifted nearly all of its budget to private security and sanitation services. The group also worked with city officials to impose a police-enforced midnight curfew and paid to fence off the park.
Around Grand Central, the partnership took even more aggressive steps. They paid homeless people $40 to $50 a week to work full time conducting “outreach” that encouraged people to leave these areas. The paltry pay rate not only allowed the partnership to outbid other groups for lucrative outreach contracts, but also served its “more general commercial purpose of improving business for midtown merchants by removing homeless people from the street,” as one lawsuit against the group charged. Indeed, the group won more than $1.6 million in contracts with area businesses and property owners —— especially banks —— to help lessen the presence of the homeless.
By 1995, however, investigations by the New York Times and federal officials found that the group’s “outreach” included the use of roving “goon squads” that harassed and beat homeless people and destroyed their belongings. When this story surfaced, the partnership lost $547,000 in federal grant money. “We are not in the business of subsidizing thuggery,” Andrew M. Cuomo, then-assistant Housing and Urban Development secretary, proclaimed.
Local officials promised a host of reforms for BIDs. But little changed. Instead, in subsequent decades, BIDs have multiplied not only in New York but across the country: There are now upward of 1,000 in the United States. Why? Rather than increase oversight and regulation of BID activity, municipal officials have generally been much more likely simply to encourage their growth. After all, BIDs can help to provide services such as sanitation, marketing and visitor assistance without drawing from municipal tax revenue.
Certainly, not all BIDs engage in nefarious activities. But as the Berkeley report documents, they have been at the forefront of aggressive responses to homelessness. BIDs frequently press for anti-homeless laws and back public and private policing practices that criminalize homelessness. These solutions have continued to exacerbate rather than diminish the crisis of homelessness.
Such tactics distract from proven solutions, such as increasing affordable housing and housing first policies, which will bring cities —— and the country —— much closer to addressing the continued crisis of homelessness. They also remind us about the danger of letting private entities shape our public spaces and guide public policy: their interests don’t always coincide with the public good, and can hurt society’s most vulnerable.