Why the Olympics Are Bad for (Most) Cities
The run-up to the 2016 Summer Olympics, which kick off in Rio de Janeiro on August 5, has been rocky, to say the least.
In April, a bike path built for the games collapsed, killing two people. A key new piece of infrastructure—a subway extension—was so delayed that it's now scheduled to open four days before the games start. Guanabara Bay, where the sailing competition will take place, is dangerously polluted, and the Zika virus has rattled visitors and athletes alike.
City leaders declared a state of financial emergency in June and had to be bailed out by Brazil's national government (which has problems of its own, like the worst recession since the 1930s and the suspension of President Dilma Rousseff).
Is hosting the Olympics worth it? Recently, the conventional wisdom has tilted toward no. Sure, there's an initial burst of civic pride and, maybe, increased tourism. The desire to look good in the eyes of the world can provide the impetus for major public-works projects that might otherwise languish. But Rio exemplifies a pattern of major delays, skyrocketing costs, and projects that often become white elephants.
In a paper published in July by Oxford's Saïd Business School, authors Bent Flyvbjerg, Alexander Budzier, and Allison Stewart weigh the costs and cost overruns of recent Olympics. Their conclusion: "[F]or a city and nation to decide to stage the Olympic Games is to decide to take on one of the most costly and financially most risky type of megaproject that exists, something that many cities and nations have learned to their peril."
But as the paper notes, the Rio Games' $5 billion price tag is actually quite modest. On average, Olympiads held over the last decade have cost about $9 billion. The cities that have done well out of the games aren't necessarily the ones that spent the least on them. What matters more is turning the investment into lasting benefits.
Here's a look at which recent hosts fared well, and which ones struggled after the TV cameras departed.
Vancouver's Winter Games in 2010 were not particularly spendy, at about $6 billion (exact tallies vary depending on what's included). A report in 2013 found that playing host was worth it—but not for attracting tourists, who come to Vancouver and the nearby resort town of Whistler in droves anyway. The real benefit to Vancouver came in the form of major infrastructure projects: a highway upgrade, a convention center, and a rapid-transit line. A narrower audit of the Games that excluded infrastructure costs found they broke even. That's a turnaround from another Canadian Olympics, Montreal's in 1976, which left Quebec paying off debts for 30 years.
White elephant score: 1/10
London's Summer Games in 2012 were far more expensive than Rio's, at $15 billion. Touted as the "legacy Olympics," they were harnessed to an ambitious plan to regenerate East London, a disadvantaged part of the metropolis. This yielded some tangible successes: a brownfield site was cleaned up and turned into parkland. Thousands of housing units have replaced the athletes' village. Various sports facilities are now open for public use, such as the late Zaha Hadid's curvaceous Aquatics Centre. The main Olympics stadium has been transformed into the home of the West Ham soccer team.
Critics, however, say the UK government has broken its promise to invest in sports, and point out that most of the new housing is financially out of reach for ordinary people. Still, a majority of Brits polled in 2013 thought the Games were well worth the money.
White elephant score: 3/10
The 2014 Winter Games in Sochi were the most expensive in Olympics history, costing at least $22 billion and possibly as much as $51 billion, depending how you run the numbers. Vladimir Putin's government chose Sochi, a summer resort destination, as part of a plan to regenerate the Caucasus region. But this was the Winter Olympics, so they had to build almost everything from scratch. Accusations of cronyism in doling out contracts followed, along with huge cost overruns and some shoddy-looking construction. (Remember the bobsledder who got trapped in his bathroom and punched through the door?) However, a report by the European Bank for Reconstruction and Development projected that the Games may bring lasting benefits to the region.
According to a recent dispatch in the Christian Science Monitor, locals in Sochi are happy for improvements like a major new road that eases traffic jams and an electricity grid that makes blackouts a thing of the past. Private investment in the city of 300,000 has risen, with new resorts and hotels opening. The Fisht Stadium, where opening and closing ceremonies were held, is now being prepared to host matches in the 2018 FIFA World Cup.
White elephant score: 7/10
If any city is a poster child for the risks of hosting an Olympics, it's Athens. Images of weed-infested stadiums and decrepit swimming facilities in the Greek capital appeared less than a decade after the games were held there in 2004, at a cost of about $11 billion. The nation where the Olympics originated spent years building a new airport, stadia, a subway and a tram, but was soon hobbled by debt.
One academic analysis found that the Athens Olympics did boost tourism—in neighboring Italy, where travelers presumably headed to avoid the crowds. The Greek athletes' village was turned into a large public housing project, but the hospital and most of the stores there have shut down. The games are believed to have contributed to the crippling of the country's economy. However, in recent months the empty stadia have found an unexpected new use: as refugee housing.
White elephant score: 9/10
Amanda Kolson Hurley is a freelance writer in Washington, D.C. She has written for The Washington Post, The Atlantic, and many other publications.