Neoliberal Governance, Business Improvement Districts, and the Privatization of San Francisco

by Ian James


On July 26, 2019, ten district supervisors voted to establish the Downtown Community Benefit District. It became San Francisco’s newest Business Improvement District (BID), and it will receive over $83,000,000 in property assessments from the City and County of San Francisco over the next 15 years. The money will not be spent according to any city budget. Instead, it will be spent according to a district management plan that was proposed by just 30 property owners, among them businesses such as Wells Fargo Bank and PG&E.

BIDs are not unique to San Francisco, there are thousands across the United States and over 200 in just California. The way that BIDs function varies by city, but all BIDs in California share certain characteristics. Each BID consists of an area in which revenue is collected from properties by local government and is given to a private organization to spend on programs in the district. Property owners vote on whether or not to establish a BID before elected officials make the final decision. Votes made by property owners are weighted according to the amount of assessments that the property owners will pay. So, the more property you own, the bigger your say in how a BID functions. If you do not own property, then you get no say at all. The more than 60% of San Francisco residents who rent have no power over BIDs, nor do homeless neighbors.

The vast majority of BIDs’ budgets are dedicated to programs controlling public space. In San Francisco, these programs take the form of surveillance and security. Private security patrols the East Cut Community Benefit District 24/7, and the Yerba Buena Community Benefit District has a dedicated SFPD officer working 12 hours per day. The Union Square BID has installed 350 security cameras and is aiming to expand the network to include every foot of public space in the district. BIDs regularly use the SFPD 10B program, where private companies hire off duty police officers as security.

The purpose of security programs is consistent across the city’s BIDs: target so-called quality of life crimes, such as sitting on sidewalks. Ninety percent of the 2,169 “criminal activities” reported by the Civic Center Community District’s private security were sitting, lying, trespassing or loitering. The mere act of existing in public space was turned into a crime by the BID. Not everyone who sits in Union Square, or lies in front of City Hall, is reported of course. BIDs dictate who is allowed to use the public spaces within their boundaries by discriminately enforcing these laws, and enforcement exclusively targets poor and homeless people.

Policy change is another way that BIDs increase their control over public space. The Union Square BID advocated strongly for the 2019-2020 city budget to include the Union Square Ambassador Program, which commits $350,000 from the San Francisco general fund to pay seven retired cops to patrol Union Square. The Union Square BID has also donated thousands of dollars to political action committees and testified at several public forums in favor of Proposition L. Proposition L, passed in 2010, restricts sitting or lying on sidewalks citywide from 7 am to 11 pm. This change in law enabled BIDs to develop the security apparatuses that they rely on today.

Finally, BIDs schedule organized activities and install architecture that keep poor and homeless people out of public spaces. Hostile architecture installed to make spaces uncomfortable to rest in, such as spikes in front of buildings, are popular projects for BIDs. In emails to Board of Supervisor staff, the president of the Discover Polk Community Benefit District praised installing planters as a way to discourage homeless people from setting up tents. Like private security, controlling design allows BIDs to determine what public space should offer and to whom. BIDs use all of these tactics to replace local governments as the administrators of public space, to the detriment of the people who rely on these spaces for life sustaining activities.

The Downtown Community Benefit District is merely the latest piece of a puzzle that was started in 1999, when the Union Square BID was established as the city’s first. Today, there are 16 BIDs, which collectively control over 450 blocks of San Francisco. Walking down Market from Gough to the Embarcadero, you pass through six BIDs and not a single block that they do not claim under their direct control. Collectively, the city gave BIDs over $17,500,000 in property assessments during the 2017/2018 fiscal year. The Downtown Community Benefit District and the SoMa West Community Benefit District, starting in FY 2020, will receive an extra $7,500,000 per year. Growth in size and influence has not brought any new oversight measures, and the majority of people still have no idea what BIDs are.

The city levies property assessments for BIDs on publicly-owned property as well, and the assessments are paid with public money. The Civic Center Community Benefit District alone levied $397,235 of assessments on property owned by local and state government, including $38,212 on properties owned by SFUSD. The Civic Center Community Benefit District also levied a $43,584 assessment on city hall. Funneling public money through BIDs only serves to remove spending from the realm of public accountability.

The city is now paying consultants to target smaller commercial areas alongside patches of residential neighborhoods through a new type of BID: the Green Benefit District (GBD). Despite their friendly name, GBDs are structured almost exactly the same way as regular BIDs. The one difference is that GBDs collect assessments from mainly residential properties. This would be impossible anywhere else in California because state law forbids BIDs from collecting revenue from exclusively residential parcels. In San Francisco, however, the Board of Supervisors amended that law in 2004. They lowered the amount of written support needed to form a new BID, allowed BIDs to use property assessments to reimburse the costs of setting up a website, conducting surveys and other expenses from their own formation processes, and enabled assessments on exclusively residential parcels.

Neighborhood groups and residents across the city have already worked together to defeat GBDs in the Haight, the Sunset, and Buena Vista. They wrote articles and spoke in public meetings against bloated budgets, lack of accountability, and an undemocratic formation process. Now, the fight has spread to the Mission. In a letter opposing the proposed Mission Dolores GBD, the Mission Dolores Neighborhood Association stakes out their reasons for saying no: one third of the money collected would go towards administration costs, the city had already spent over $100,000 trying to force the GBD through, and the meetings to establish a management plan for the GBD were held behind closed doors. Proponents have tried to portray GBDs as neighborhood initiatives, but they are being advanced by large property owners and private consultants for the same reasons that the Union Square BID and the Civic Center Enhanced Service District were established.

Who BIDs are actually accountable to can be determined by looking at how they are created. The process starts with a steering committee that determines the borders of the BID, how much money the BID will collect, and how the BID will allocate its budget. They put this information into a management plan and an engineer’s report. The steering committee then needs to collect petitions in favor of their plan from property owners representing just 30% of the assessments. Property owners who own more property pay more in assessments, so their support is more important than the support of property owners with less property. The Downtown Community Benefit District was able to pass this stage with only 30 supporters because of supportive petitions like PG&E’s, which was worth 1.22% of total assessments. The Office of Economic and Workforce Development also provides steering committees with technical advice, contacts of consultants, and money during this stage. That is a level of the support that the city would never extend to a traditional property tax.

Once the petitions are submitted, an election is scheduled. Owners of property within the BIDs’ boundaries are sent ballots which they can return in favor of or in opposition to the BID. It does not matter if the property owner is registered to vote in San Francisco, and even corporations are allowed to vote. In order for the BID to go before the Board of Supervisors, only 50% of the ballots returned need to be in favor. Like the petitions, these ballots are weighted according to the amount of property that the voter owns. This process stands in stark contrast to the process for taxes like Our City Our Home’s Proposition C, which is fighting in courts to be implemented after receiving 61% of the votes in a city-wide election. For the Downtown Community Benefit District, 73 property owners submitted ballots in favor and 63 property owners submitted ballots in opposition. Three hundred and forty-five property owners did not return their ballots at all, so their votes were discarded altogether. The final, weighted vote read 71% in favor to 29% in opposition. A small group of large property owners were able to push their plans through a system in which few people are allowed to vote, and votes are weighted according to the amount of property that voters own.

Before the election on the Downtown Community Benefit District was closed, the Board of Supervisors held a public hearing. After hearing public comment and tallying the ballots, they took the final vote on whether or not to establish the BID. That vote was a sham. One month before, the Board of Supervisors had authorized the mayor to submit ballots in favor of forming the Downtown Community Benefit District on behalf of city-owned properties. For each one of the city’s 16 BIDs, the Board of Supervisors actually tasked the mayor with submitting ballots in favor of creation before any public hearing. The Discover Polk, Japantown, and Ocean Avenue Community Benefit Districts would all have lost their elections if it were not for the city’s intervention. The city, and the Board of Supervisors in particular, are swinging the elections that they are supposed to be overseeing.

BIDs across the country have acted as laboratories for new forms of criminalization and privatization. The Denver City Code has a section stating that it is illegal to sit or lie down specifically within the boundaries of the Downtown Denver BID. In Sacramento, the Greater Broadway Partnership has pushed a lawsuit that would permanently ban seven homeless people from entering the Broadway business district. In San Francisco, BIDs have used private security, hostile architecture, and government lobbying to become the arbitrators of who is and is not allowed in public spaces. At every step of the way, local government has enabled them. In order to successfully organize against this co-option and to advance alternative visions of public space that are truly for the benefit of all, we must resist BIDs and the pseudo-private spaces that they work to create.