Part 3: Los Angeles, CA and the Private Metropolis
HOA Detective™ | Feb 17, 2026: Special Series Preamble: This article is Part 3 of a special series by the HOA Detective™ examining the rise of a “Private Metropolis” technostate ¹ – a creeping governance layer that is reengineering and steadily replacing traditional municipal models with privatized, assessment-funded systems of control, service delivery, and rules enforcement. Among the various entities that are utilized by the designers of the techno state are:
- Privatize Special Districts (PSDs);
- Business Improvement Districts (BIDs);
- Community Benefit Districts (CBDs);
- Enhanced Service Districts (ESDs);
- Special Service Areas (SSAs);
- and similar legal constructs that levy mandatory assessments to provide quasi-public services.
City Snapshot: In the last four decades, Los Angeles has seen a major expansion of Business Improvement Districts (BIDs) and related quasi-public districts, accelerating sharply from the mid‑1990s onward. Under California’s “Property and Business Improvement District Law of 1994,” cities may establish assessment-funded districts at the request of affected property owners, creating a durable pathway for localized, mandatory financing of supplemental services.
California leads the country in BID prevalence, with “almost 250” districts statewide (a figure frequently cited in 2015-era commentary). ²
What Los Angeles BIDs Typically Deliver: Los Angeles alone hosts numerous BIDs spanning very different urban environments: the Downtown core (Downtown Center BID and the Industrial District BID), destination corridors like Hollywood, and neighborhood commercial nodes such as Studio City and Westwood Village. The geography matters. LA is not a compact city with a single central business district; it is a vast municipal territory with uneven service levels, competing political priorities, and a persistent homelessness and street-disorder crisis.
In this environment, the BID becomes a governance shortcut – draw a boundary, levy an assessment, hire staff, and build a private operating apparatus that can deliver visible results in a defined zone, using private, for-profit corporations to deliver services that have been traditionally provided by local government.
Purpose and Mission: LA BIDs typically advertise a familiar service stack: cleanliness, “safety,” and economic vitality. On the cleanliness side, BID programs commonly include sidewalk sweeping, trash collection, graffiti removal, and pressure washing. The LA Industrial District BID, for example, describes a multidimensional clean program that includes sweeping, graffiti removal, illegal dumping removal, weed abatement, and pressure washing. ³
On the “safety” side, many districts deploy “ambassadors” and private security patrols intended to deter crime and improve visitor perception of “safe streets.” On the economic-development side, BIDs invest in branding, marketing events, and streetscape improvements – street furniture, signage, lighting, and public art – designed to make the district legible to tourists, investors, and prospective tenants.
To be Clear: Many of the problems BIDs are meant to solve, and the results they achieve are real:
- Many U.S. city streets are dirty; many BIDs deliver cleaner streets.
- Many U.S. cities are littered with graffiti; many BIDs deliver faster graffiti removal services.
- Many residents and visitors feel more comfortable and “safe.”
- Many merchants report fewer nuisance incidents.
This is precisely why BIDs are politically resilient. They produce tangible, rapid improvements that municipal agencies – constrained by procurement rules, budget cycles, staffing levels, and competing citywide demands – often struggle to match.
An Easy Sell: To be honest, the case for BIDs is an easy sell when you look at the conditions of many U.S. cities, especially in and around the downtown core. Nonetheless, the consequences of a creeping normalization of a second governance layer must be examined. BIDs are not just about a benign level of “supplemental services.” They are also about the outsourcing of operational authority to for-profit corporations that shape the day-to-day rules of public space, often absent traditional democratic controls, such as the level of accountability only the popular vote can deliver.
Recurring Revenue Transfer: In LA, BID assessments are mandatory, formula-driven (often square footage, frontage, and similar metrics), and ultimately passed through to tenants, shoppers, and residents via higher rents and higher prices for goods and services.
The concept of recurring revenue transfer embedded in the BID model is indicative of PSD across the country. The BID is initially sold as a localized benefit, while the financing mechanism resembles a tax with fewer democratic protections, like representative government elected by popular vote.
Formal governance requirements under California law are lighter than the NYC ecosystem; however, cities are required to provide annual BID “workplans” and budgets that must be approved. Meanwhile, BIDs must renew their charter every 5–10 years via an owner vote.
City Oversight Tends to be Hands-Off: Research indicates that city councils rarely scrutinize or veto BID plans. The City of Los Angeles’s Clerk’s office provides administrative oversight, ensuring BIDs file their annual reports and comply with basic transparency requirements (open meetings, etc.), but day-to-day decisions are left to the private managers.
Governance and the “One Dollar, One Vote” Problem: In Los Angeles, as in other California cities, BID formation and renewal flows through a petition and assessment-ballot process in which voting power is weighted according to the assessment burden. In other words, those who pay the highest assessments are granted more voting power. Under this system, those who pay more in BID assessments have more say in how the organization is operated.
LA’s City Clerk describes BIDs as assessment-funded programs within a defined area, with the City conducting and certifying the assessment ballot procedure prior to establishing or reestablishing a property-based district. ⁴
In practice, this structure predictably concentrates influence with large commercial landlords, institutional owners, and corporate property interests – the actors most capable of sustaining board participation, staffing advocacy, and navigating City Hall.
This weighting of the vote is the BID equivalent of the condominium voting pathology in which voting power is allocated by SF of property owned, compared to the TOTAL SF of all units within the development. In the HOA world, owners vote while tenants of property owners do not. In the BID world, those most affected by street-level enforcement and public-space management – workers, low-income residents, unhoused people, and small merchants living on thin margins – often have the least institutional leverage. The BID may hold open meetings and publish annual reports, but the governing center of gravity remains anchored to assessment weight and real-estate value protection.
Formal Requirements, Hands-Off Practice: California law includes procedural guardrails (management plans, defined service benefits, renewal cycles), while Los Angeles maintains an administrative oversight framework through the City Clerk’s Neighborhood and Business Improvement District Division.⁵ However, the operational reality described by auditors and researchers is that municipal oversight is frequently limited to compliance mechanics – paperwork, filing requirements, and contract administration – rather than substantive review of how a district’s security practices, service priorities, and expenditures affect the broader public.
That limitation is not hypothetical. The Los Angeles City Auditor has previously examined the City’s BID program oversight, focusing on management structures, agreements, reporting, and flows of assessment funds. ⁶
A Core PSD Dynamic: The existence of such audits underscores a PSD dynamic –
Once the district is up and running, the City’s incentives often tilt toward continuity and convenience. The district is doing work the City would otherwise need to fund, so oversight becomes more administrative than corrective unless a crisis forces scrutiny.
Mandatory Assessments and the Pass-Through Economy: LA BIDs rely primarily on mandatory property assessments added to property tax bills within district boundaries, and calculated by formulas set in the management plan (commonly using lot square footage, building square footage, and street frontage). This is not voluntary fundraising; like the residential HOA-model the BID fees are a compulsory levy justified as a “special benefit” to assessed parcels.
Financing is then passed through the urban economy. Owners recover costs through rent increases; businesses embed costs by increasing prices. Residents and consumers ultimately carry a meaningful portion of the burden.
District budgets vary dramatically. Some operate under a few hundred thousand dollars annually; others run multi‑million-dollar programs that can fund cleaning crews, security contracts, marketing campaigns, and administrative staffing. In the BID logic, that spending is framed as “investment.” The governance trade-off is like the traditional HOA procurement model; services are often purchased by a subset of stakeholders, through a Board of Directors, while the district gains operational authority over public space.
Transparency and Accountability: The Security Grey Zone: The sharpest accountability concerns in Los Angeles center on BID security and “ambassador” programs. BIDs frequently contract private security firms to patrol public streets –
sometimes alongside or in coordination with law enforcement. These guards may not possess full police powers, but they can exert meaningful control through surveillance, harassment, exclusionary “move along” practices, and informal coordination with police response.
This dynamic is visible beyond Los Angeles as well. A University of California, Berkeley report on BIDs notes their quasi-governmental status as tax assessors and power brokers and flags the governance questions embedded in that role. ⁷
Journalism and advocacy outlets have likewise described how improvement districts can facilitate aggressive policing or quasi-policing of unhoused people under the banner of revitalization, with weak oversight of complaints and use-of-force issues. ⁸
The point is not that every LA BID behaves the same way; the point is that the structural incentives are aligned toward managing visible poverty and “disorder,” and private security is one of the most readily deployable tools.
Tangible Benefits (and Why They Matter): To understand why BIDs persist, we must acknowledge what they can do well. In many instances, they deliver targeted, high-frequency maintenance that cities rarely sustain at the same intensity. Some districts also build constructive workforce partnerships.
A frequently cited example is the use of transitional employment models – district cleaning and maintenance contracts staffed by people working to stabilize employment and housing. Research and nonprofit-sector commentary have highlighted these partnerships as a plausible “win-win” configuration: cleaner streets paired with paid work pathways. ⁹
These successes are not imaginary. They are the reason BIDs are attractive to mayors and councils. They are also the reason the critique must be structural rather than moralistic. The issue is not that districts sometimes clean streets or create jobs. The issue is that privatized governance architecture is being normalized when public functions become assessment-funded and administered by private boards.
Meanwhile, the question of whether a city administration is losing out on the massive leverage that can only be achieved by negotiating services from private vendors at the city or county level never seems to enter the realm of discussion.
Equity, Gentrification, and the Two-Tier City: Equity concerns are pronounced. BIDs form most easily in areas with enough property value and commercial density to support an assessment. That means some neighborhoods effectively purchase a higher service level – cleaner sidewalks, faster graffiti response, more security presence – while others receive only baseline municipal capacity.
Two-Tier Government: As the BID model becomes more normalized, city government becomes two-tier; fee-for-service cleanliness and safety in some corridors, and a thinner public baseline elsewhere. Critics also argue that BIDs can accelerate gentrification dynamics – even if they do reduce visible disorder – by raising rents and increasing development pressure. The Berkeley report cited above found BIDs to be associated with a slow increase in residential rents and housing development, while cautioning against simplistic causality claims.
BIDs are not the only driver of change, but they are often part of the machinery that makes targeted areas more attractive for capital and less hospitable for people who do not fit the district’s preferred consumer profile – lower-income residents, for example.
The LA BIDs as a Governance Technology: Los Angeles, California, is a proving ground for the Private Metropolis – a city where the gap between what residents expect and what municipal systems can deliver creates an opening for privatized governance layers. BIDs fill that opening with a simple promise – cleaner, safer, more prosperous streets – funded through a compulsory assessment and steered by those with the largest property stakes. That bargain can produce real benefits. It can also produce a steady erosion of “small‑d” democracy as public-space rules are increasingly shaped by private boards, private contracts, and private enforcement priorities.
The HOA Detective™ position is not that every BID should be abolished. It is that BIDs must be evaluated as governance institutions, not as cleaning services for the local city council, or a source of recurring revenues for privately owned corporations, at the expense of taxpayers and private property owners.
When a BID has the power to levy mandatory fees, hire security, shape public-space norms, and influence city policy while remaining insulated from broad electoral accountability, we are no longer discussing “supplemental services.” We are discussing a parallel municipal layer – an engineered, market-weighted system for managing the sidewalk. And once that model becomes normal, it spreads.
Notes | Sources
1. Technostate (techno-state – A “governance by technology” regime state where public functions are increasingly run through technocratic and technology-enabled systems (metrics, platforms, surveillance, compliance), shifting power from elected accountability toward managerial control by agencies and contractors, justified as “efficiency.”
2. Randy Shaw, “Business Improvement Districts Take Over Cities: One-Dollar/One-Vote,” https://reimaginerpe.org/20-2/clarke-BID2
3. Downtown LA Industrial District BID, “Services,” https://industrialdistrictla.com/services/
4. City of Los Angeles, Office of the City Clerk, “BIDs 101 https://clerk.lacity.gov/business-improvement-districts/bids-general-information/bids-101
5. City of Los Angeles, Office of the City Clerk, “BIDs FAQ,” https://clerk.lacity.gov/business-improvement-districts/bids-general-information/bids-faq
6. Laura Doud, City Auditor (Long Beach), Business Improvement District (BID) Oversight Audit – (Dec. 2017) https://www.cityauditorlauradoud.com/wp-content/uploads/2017/12/Business-Improvement-District-BID-Oversight-Audit.pdf
7. UC Berkeley School of Law (Policy Advocacy Clinic) / Goldman School of Public Policy – Improvements for Whom?. https://www.law.berkeley.edu/wp-content/uploads/2019/07/Goldman-School-BIDS-Report-May-2019.pdf
8. Sara Nović, “Business Improvement Districts Allow for Aggressive Policing of the Unhoused,” – Teen Vogue (Aug. 24, 2021), https://www.teenvogue.com/story/business-improvement-districts-policing
9. Steve Dubb, “Who Is the ‘Neighborhood’ in Neighborhood Improvement Efforts?” – Nonprofit Quarterly (Nov. 2018), https://nonprofitquarterly.org/who-is-the-neighborhood-in-neighborhood-improvement-efforts/
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