Contrary to the bounty that many would expect, the Olympics historically leave host cities in debt, and often dislocate the respective cities’ poor and homeless in the process. The same holds true as idyllic Vancouver, British Columbia, Canada hosts the XXI Olympic Winter Games.
While Vancouver initially estimated the public cost of hosting the Olympics at $660 million, it has now exceeded that projection by a stunning $5 billion in unanticipated public spending. As a result, Vancouver’s most basic public programs will be at peril for years to come and the city’s most needy may be left in a very precarious position.
One example of a significant cost overrun at the Vancouver Games is security. The price tag for providing Olympics security has come in at $900 million, some $240 million over the estimated total public cost of Olympic preparation. And with respect to housing, the Games have made a bad problem considerably worse. Indeed, homelessness is so widespread in Vancouver that 57 percent of local residents voted it as their top priority to address when the city won the Olympic bid. In the British Columbia province, there are 15,000 homeless and counting, with downtown Vancouver being the poorest region in all of Canada – a stark contrast to the frivolity and celebrations being witnessed in the Olympic Village only miles away.
What’s more, according to TRAC, a nonprofit education center for tenants and landlords, 900,000 individuals in British Columbia are labeled “at risk” of homelessness, spending more than one third of their paychecks on rent. The situation is so dire that if these individuals miss a single paycheck, they stand to lose their homes in all likelihood.
Vancouver is far from alone among Olympic host cities shouldering an immense financial burden. Extraordinarily indebted host cities include Sydney, Australia; Barcelona, Spain; and Athens, Greece who are still paying off debt taken on to finance the games. In 2004, Athens spent $12 billion on hosting. To put the figure in perspective, $12 billion is five (5) percent of Greece’s gross domestic product. (Today, six years later, Greece is battling a budgetary crisis of epic proportions as is well documented in the current business press.) Beijing spent a jaw-dropping $40 billion on Olympic preparation, but also evicted tens, if not hundreds of thousands, of people in real estate development areas.
All of this does not suggest that the Olympics are not in any way a magical worldwide phenomena meriting our wonder and, in many respects, our praise. Undoubtedly, the Games do foster world unity. The caliber of the athletes is nothing shy of amazing. And the grandeur of the event itself is spectacular. However, the “Olympic industry” – a business model based on touring the Olympics around the world – has intrinsic shortcomings that have become increasingly glaring. In fact, no host city has ever made a profit, according to Robert Barney, director of the International Centre for Olympic Studies at the University of Western Ontario. But to host the Olympics in one place, and invest a plethora of resources in that single locale, as some people suggest, while economically more practical, flies in the face of the globalism that the Games so broadly endorses. Whatever the eventual answer, this is a dilemma worth pondering as we marvel at the Nordic combined, biathlon, downhill skiing, and the litany of other great events marking the 21st Winter Games.
Sources: The Christian Science Monitor, The Vancouver Sun, The Wall Street Journal, CNBC.com.
