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July 13, 2007
Hosting the Olympics and Economic Development - Reality Check
Olympic host cities since 1984 have generally benefited from the Games. They have created jobs, attracted employers, and given many cities a “can do” spirit. Because they often usher in an era of transformation to a city, some residents have trouble adjusting. But this does not mean as a whole they are bad for the host city.
The world’s urban population is growing because city offer hope and economic opportunity — given a choice of being poor in the countryside or poor in the city, increasingly people select the latter. And, given a choice of moving to a city with a stagnant economy and very little happening, or a city booming with many dynamic industries and employers, again people rich and poor tend to choose the latter.
The Olympics — in conjunction with other policies — typically provide a significant long term economic boost to the host city.
I’ve been following and researching this topic since 2002. I’m blogging today to counter the myths, incorrect assertions and poorly interpreted evidence posted today on Planetizen . Here’s the opening quote:
Cities continue to compete with each other over the opportunity to host the next Olympics, despite repeated examples showing that the games lead to bloated housing markets, lost jobs, debt and repressive social policies.
The first comment, bloated housing markets, is perhaps overstated but is also the least inaccurate comment here. Housing prices do often rise in host cities.
- First, the economic boom before the Olympics generated in part by construction activity that attracts job seekers — and not just construction workers but engineers, architects, accountants etc. More people looking for housing often drives up prices.
- Second, Olympic host cities often become the “flavour of the month” for global jet setters, who will outbid the locals for prime real estate, pushing the local wealthy to outbid upper-middle class residents for other urban real estate (similar to what is stated in this entry at Creativity Exchange).
- Finally, thousands of temporary workers affiliated with The Games come to the city for 12-24 months, filling rental accommodation which can drive up rental rates.
Depending upon what else is happening economically and in employment growth, these prices may or may not be sustainable. In Sydney, my recollection is that house prices dropped, but not until 2001 (a year later), coinciding with a global recession — and house prices in many global cities dropped at that time, so you can’t blame it all on the Olympics.
Lost jobs? The second comment above. Where do they get that from? Most Olympic host cities run into labour scarcity — too many jobs, not enough workers. Okay, maybe after the construction and the Games are finished not all jobs remain. But good government policy can mitigate this somewhat — for example, in Australia the state and federal governments postponed government funded infrastructure projects to coincide with the ending of Games construction. The same is planned for Vancouver. And, it’s hard to argue that a city and its residents are better off not to have had jobs at all, rather than to have had some jobs that were not permanent that gave people experience and a chance to hone skills they otherwise never would have done. Moreover, from the broader business attraction and development that occurs, thousands of new permanent jobs typically emerge in conjunction with hosting the Games.
Debt. Yes, Olympics tend to cost money and unforeseen costs are rather typical, unfortunately. But, in many cases the federal and regional governments are the bodies who agree to take the debt risk — not the city itself. And, since the Los Angeles Games of 1984, Olympic Cities and organizers have done a tremendous job covering costs through leveraging corporate sponsorships.
Repressive social policies. The Olympics do not cause repressive social policies. A government is either repressive or it isn’t. The laws of a country either work for all citizens or do not. The Olympics cannot change this. The article may well be accurate in detailing abuses in Beijing. But with or without the 2008 Olympics, I’m sure we could find examples of abuses in Beijing and China.
On the long term economic and employment growth. The governments of New South Wales, Australia and Sydney managed to attract 214 new international companies to Sydney. Employers such as Deutchbank and Oracle. The majority came after the Games. Atlanta experienced a decade-long economic boom generating an average of 76,000 jobs per year in the 1990s.
Hosting the Olympics — combined with good public policy and creativity from the business community — contribute significantly to economic growth. Sometimes, even often, this growth is so robust that it brings growing pains — such as housing shortages (which can drive up prices and displace the poor from low-income housing), which critics often focus on.
But again, if you ask the poor whether they would rather be in a city with so little economic activity and so few jobs that there is lots of cheap housing — or in a city offering hope and promise — most go for the latter. They vote with their feet and move to where the hope is. That’s why millions of poor people around the world relocate from small towns and countrysides each year to cities. That’s why places like Atlanta struggled so hard with the poor and homeless in the 1990s — and Vancouver is facing a similar struggle.
Yes the Olympics can create tensions and growing pains and everything that goes along with great transformations in a city. But that doesn’t mean they are not something worth competing for, as so many world city leaders will attest.
Topics: poverty, planning policy, urban history, economic development |
September 14th, 2009 at 8:41 am
Just wondering if you have any information on other jurisdiction outside of the host city who have gained economic and/or business development success from attending the games? For example what could government or private sector officials from Newfoundland gain from attending the Vancouver games?
February 3rd, 2010 at 6:59 pm
the last quarter of 2009 seems promising as we have seen lots of signs of econic recovery against the massive economic recession. i hope that in 2010 all our economies would be back on track. recession really sucks.