By Gerardo Sandoval and Karen Chapple
San Francisco leaders are understandably excited about competing for the Olympics in 2016. In this dog-eat-dog world, a city would have to be crazy not to consider competing.
But it’s important to question some common assumptions. The simple fact is that the Olympics do not generate the huge economic boost that backers claim. In the past 30 years, the majority of host cities spent millions of dollars that they never got back, and the anticipated multiplier effects almost never materialized.
The economic impact of the Olympics will depend mostly on the amount of new infrastructure built and its synergy with city needs. If most of the infrastructure is built already (Mayor Gavin Newsom claims that 83 percent is), then few new jobs will be created and multiplier effects will be minimal.
This was the experience in Los Angeles, which built very little new infrastructure and thus gained only temporary new jobs. The catch is that cities, such as Athens, that do build many new facilities, and thus generate new jobs and income, also have to spend billions of dollars of public money. And for U.S. cities, unfortunately, the federal and state governments are not likely to step forward to foot the bill.
Studies have shown that the cities that benefit most from the Olympics are those that need it the most: those that lack recognition as a tourist destination (e.g., Calgary); have transportation and other infrastructure needs long established in a strategic plan (e.g., Barcelona); or are suffering during an economic downturn (e.g., Atlanta). San Francisco’s position as a major world tourist destination is firmly planted and its iconic status unrivaled. In fact, the Olympics often have a mixed effect on tourism, by “crowding out” the city’s usual tourists and even pushing locals out of town because of the congestion and hoopla. Moreover, an Olympics is unlikely to address its infrastructure concerns.
What isinteresting is that economic studies showing huge net gains are generally produced by industry groups and “chamber of commerce” type boosters, while the impartial academic studies show much more modest gains or none at all.
Sadly, when the Olympics has had negative impacts on the local economy, the poor tend to bear the brunt of the impact — in particular, the loss of low-income housing replaced by Olympic villages that subsequently become market-rate buildings, and the burden of rent increases as housing supply tightens before, during, and after the games.
There are certainly non-economic reasons for desiring the Olympics. But if we are looking for an economic boost, we might be best off sprinting away from the Olympics.
We certainly should consider the risks to the public treasury, ask who is going to pay for all the extra police, and be frank about the resulting traffic and gridlock. What is the San Francisco taxpayer going to get out of this — except the bill if anything goes wrong?
Gerardo Sandoval sits on the San Francisco Board of Supervisors and holds degrees from Columbia Law School and UC Berkeley’s Department of City & Regional Planning. Karen Chapple is a professor in UC Berkeley’s Department of City & Regional Planning, where she heads the Center for Community Innovation (communityinnovation.berkeley.edu).