By Dragan Kusevski, Maja Stalevska (Uppsala University), and Chiara Valli (Malmö University)
In September 2020, the Swedish government commissioned the National Board of Housing, Building and Planning to “review any obstacles for using the [Business Improvement District] method” to help address socio-economic exclusion in struggling urban areas. Stressing BIDs’ putative success in dealing with similar issues in other parts of the world, the government has argued that coalitions of local property owners, together with residents and public actors, could help “lift” socio-economically challenged neighborhoods out of poverty through real estate investments, crime prevention, and security measures (Regeringen 2020a).
The term “BID” stands for self-taxing collaborations between business and property owners within geographically delimited areas—predominantly commercial and downtown business districts—that aim to increase the areas’ attractiveness and promote economic activity. Originally a North American phenomenon, BID partnerships first emerged in the 1970s in the wake of sprawling suburbanization and the decline of downtown retail cores, but grew tremendously since the early 1990s against the background of urban decline and spiraling urban crisis. In the United States particularly, BIDs have become a common presence in struggling commercial areas as a means to thwart economic decline and revitalize neighborhoods through “community entrepreneurialism” and property-led regeneration (Schaller 2019). Since, the BID-model has become a properly international phenomenon, widely recognized as a vital part of the business-friendly zoning arsenal of neoliberal urban policies. However, they have been both praised and criticized; while proponents highlight their private initiative, efficiency, and entrepreneurship in dealing with urban issues, critics point to the lack of accountability and democratic concerns, as well as their role in the promotion of privatization and gentrification of urban space.
With socioeconomic inequality and deep-seated segregation becoming a major issue for metropolitan regions across Sweden, policymakers have increasingly hailed BID-partnerships as an ostensibly successful solution to place-based exclusion. However, BID-like associations have operated in Sweden since the early 1990s without an enabling legislation, with property and business owners organizing in non-profit associations in both commercial and residential districts. The latter, also known as neighborhood-based business improvement districts (NBIDs), have become particularly successful in replicating a particular kind of neoliberal urban governance across stigmatized urban neighborhoods struggling with concentrated poverty, high crime rates, and social and ethnic segregation. However, despite their growing relevance, there is still a lack of understanding concerning the role that BIDs have assumed in the broader Swedish urban context, the ways in which they adapt to and influence ongoing urban transformations, and ultimately the possible implications of the adoption of NBIDs as a tool for counteracting segregation. Our article attempts to cast light on some of these questions by providing a geographical investigation of the existing residential BID landscape in Sweden. We pay particular attention to the political-economic rationales of BIDs in relation to their key constituent actors, and the local institutional contexts in which they are embedded.
Our analysis suggests that NBIDs tend to appear in stigmatized residential neighborhoods with a long history of public area-based interventions and a high urban re-development potential. The model has been presented as a corrective to previous public policy efforts that have largely failed in their aim to thwart socioeconomic segregation, by promoting property-oriented solutions in place of a more universalistic welfare approach. We argue that this can be interpreted as a move forward in the normalization of urban entrepreneurialism, as private actors for the first time explicitly co-create urban policy through NBIDs. The growing power assumed by private real estate actors in residential areas is enabled by the close alliances with (increasingly business-minded) municipal housing companies and (growth-first oriented) local authorities that the NBID partnerships forge. Ultimately, we maintain that their geographical and institutional context, as well as their organizational nature, should raise concerns about the socio-spatial effects NBIDs might have in terms of democracy, accountability, and uneven development.
The Geography of NBIDs and their Key Actors
NBIDs have emerged mainly in the three largest cities in Sweden—Stockholm, Gothenburg, and Malmö—in an urban context characterized by economic polarization, and growing social and ethnic segregation. Most of the areas where such associations have formed have been the subject of sustained public area-based policy efforts aimed to break urban segregation patterns. Enduring at the bottom of the urban hierarchy at least since the early 1990s, these neighborhoods have faced relentless stigmatization associated with crime, poverty, and a larger share of non-Swedish population. However, the whopping rise of housing rents and property values in the last several decades have rendered stigmatized neighborhoods the last bastions of affordable housing. NBIDs have recognized this discrepancy and the related economic opportunities and have worked, together with public agencies, to turn the situation to their favor.
NBID associations are predominantly comprised of residential property owners. However, local governments and municipal housing companies (MHCs) have also been heavily involved in their formation and work. The reasons for their involvement are to be found in long-running changes underway as early as the 1990s, affecting the institutional context of both local governments and MHCs alike. These transformations, a result of the wider political-economic restructuring of the country, have compelled both actors to increasingly adopt growth-first and business-like principles. In this context, property-owner associations like NBIDs, whose primary goal is to energize local real-estate markets, are seen as legitimate partners and co-creators of urban policy.
What are the Possible Implications?
We argue that these developments have serious implications with respect to public accountability, democracy and spatial inequality–shortcomings recognized in other contexts as well. The absence of a legal mandate and the entanglement of public and private actors make efforts to hold NBIDs accountable difficult. Moreover, having renters and their national association excluded from both membership and important decision-making processes, BIDs restrict further the influence residents have over matters concerning important developments in their own neighborhoods. These concerns are critical, not least in light of the fact that NBIDs’ concerted efforts to increase property values seem bound to spur gentrification and displacement. We would contend that the governmental plans to use the “BID model” as a tool for alleviating socio-economic exclusion are misguided, as the evidence from other contexts and Swedish NBIDs’ current objectives and practices suggests that it is more plausible that spatial-inequality patterns will be further reinforced.
Regeringen. 2020a. Budgetåtgärder för en effektivare stadsutveckling och ett ökat bostadsbyggande. Press release. https://www.regeringen.se/pressmeddelanden/2020/09/budgetatgarder-for-en-effektivare-stadsutveckling-och-ett-okat-bostadsbyggande/ (accessed July 19, 2021)
Schaller, Susanna F. 2019. Business Improvement Districts and the Contradictions of Placemaking: BID Urbanism in Washington, DC. Univ. of Georgia Press.
Dragan Kusevski is an independent researcher. His research interests revolve around urban policy, housing struggles, and uneven development. He holds a master’s degree in urban studies from Malmö University, and a master’s degree in architecture and urban planning from Ss. Cyril and Methodius University, Skopje.
Maja Stalevska is a PhD candidate in the Department of Human Geography at Uppsala University. Her research interests focus on the production of the built landscape with respect to capital accumulation, and the growing influence of financial logics and markets over urban development processes. Her doctoral research focuses on the relationship between finance capital and city-building in a historical and geographical perspective.
Chiara Valli is Doctor Phil. in Social and Economic Geography (Uppsala University, 2017). She is currently employed as a postdoc researcher at the Institute for Urban Research, Department of Urban Studies, Malmö University. Chiara’s research interests include: housing markets, housing financialization, gentrification, segregation, Business Improvement Districts (BIDs), smart cities, labor precarity, urban activism, participatory and visual research methodologies.