Private provision of local public goods and housing market responses: evidence from London

This paper investigates how Business Improvement Districts (BIDs), business-led organizations financing local safety, cleanliness, and amenity improvements through mandatory commercial levies, affect residential property values in London. Using geocoded transactions from 2000 to 2019 and a staggered difference-in-differences estimator, we find that BID formation raises house prices by 5-6% within boundaries (roughly £26,000 per property), with positive spillovers up to 300 m. We also report that effects are stronger for better-funded BIDs. Following BID formation, neighborhoods see increased shares of one-family households and professionals, accompanied by lower unemployment rates, but reduced inflows of ethnic minority residents.