In this article the author, Davies, examines what effects the construction of sports stadia has had on local residential property and communities. Her contention is that in the UK, this has the effect of increasing the value of residential property in the surrounding area. This is contrary to views often held by residents in close proximity to proposed sports stadia, who protest on the grounds that during both the construction and operation phases there will be negative impacts such as congestion, pollution and antisocial behaviour, leading to declines in property values.

The context of this piece is academic. It comes from a journal called Area and contains an abstract at the beginning, highlighting the key points. In her introduction, Davies provides a literature review of her subject, which is one of the usual characteristics of writing in an academic context. After introducing the topic the author explains the research methodology used. Two examples are focused on in this article - The Millennium Stadium (in Cardiff) and the City of Manchester Stadium. They have similarities in that they were both constructed recently and built primarily to host major sporting events. The Millennium Stadium for the 1999 Rugby World Cup and the City of Manchester Stadium for the 2002 Commonwealth Games. Davies used a mixed method approach of interviews and a questionairre survey to collect qualitative and quantitative information on the impact of these stadia on the property market in each city.

Having established the methodology Davies then goes on to analyse the results gleaned and reveals that the stadia in each city have generally had a positive impact on the residential property market. However, research also indicated that it was difficult to isolate the impacts of the stadia from other developments in the surrounding area. In the case of Manchester, the opening of the stadium resulted in an average net positive change of 12.5 per cent to property value over and above general house prices in the area. For Cardiff, the stadium was closer to the city centre and the local real estate market was more established, therefore the net postive change to residential property value was 2.92 per cent, so not as much. In addition to the tangible boosts in value sports stadia provides to local property, intangible impacts also exist. This is because the perceptions of place and the perceived desirability of an area can influence property prices. The research revealed that in both cities the stadiums had enhanced the external image of the city and the internal perceptions of the area in the city in which they are located. I think this is a sensible conclusion because if people are proud of the area they live in, they are more likely to invest in their property, which in turn should enhance the desirability of the area.

The author's conclusion is that she has provided some evidence to show that sports stadiums can have a positive influence on residential values in the surrounding area, although she admits the research has limitations. Given the data collected was opinions, the findings may not be so robust. I would say it is a reasonable conclusion to draw, and if one compares the situation to the Telstra Dome in Melbourne which has been the centrepiece for the revival of the Docklands area, similarities are apparent. It makes sense that people generally want to live close to entertainment venues because they increase amenity. This may be different in the case of being a very close neighbour, in which case negative factors such as noise can play a part. This comes back to ideas we discussed in this course about how ideally everyone would like services within walking distance of their homes, just not right next door.

Questions

• Do you agree that there is a correlation between the construction of stadia and a rise in local property prices?
• Are there any other explanations for increased residential value after stadium construction?

Reference:

Davies, L. 2005, "Not in my backyard! Sports stadia location and the property market", Area, 37.3, pp. 268-276

12. City Futures 23rd May, 2008 14:27:52   [#] 

Comments

Davies, L. 2005, "Not in my backyard! Sports stadia location and the property market"
Do you agree that there is a correlation between the construction of stadia and a rise in local property prices?

Megan  26th May, 2008 13:44:01  

Davies, L. 2005, "Not in my backyard! Sports stadia location and the property market"
In response to your first question, I agree that housing prices would increase once a stadium is built however it may not necessarily be the result of the building itself but of the amenities which you mentioned in your review that come with it. The correlation between these figures is logical and provides enough evidence to make a fair assumption that this is the case.

I think the stadium, if successful, would act as a catalyst for other venues, services and amenities in the area. So in response to your second question I believe that the increased residential values are affected by the construction of the stadium and the other activities that it encourages.
Megan  26th May, 2008 13:51:09  

Davies Response
I think that it depends on the city, what infrastructure is available to that city, and where the infrastructure is already located. Certainly, since Cardiff’s stadium has been built, Cardiff’s property has increased in price, because, maybe so, more people are coming from England to the games etc, and the whole economy as a whole is being increased, as well as the city just being more ‘liveable’.
Personally, I would not want to live near a stadium, for a variety of reasons. Noise, theft, drunkenness late at night, lack of parking in the area etc. However, where there is a stadium, there is usually a huge public transport network in very close proximity to the ground. Take Melbourne...Rod Laver, MCG, Telstra dome etc. And as we all know, if you live near public transport, the property values increase.
If we look at Melbourne, yes, property prices are high near Richmond and the city – but is this purely because of the sports stadiums – or is it because what the area has to offer as a whole?

c123  26th May, 2008 16:21:25  

Davies, L. 2005, "Not in my backyard! Sports stadia location and the property market"
I think that in practically all cases new stadiums result in the local property receiving a boost in value. I know I would quite like to live near one, not only because I go to watch sport a fair bit but also since I think it would be a good selling point. Sites for stadiums are usually chosen because good public transport already exists or they are right next to the city centre, and this hints that the property values may be already healthy. Sometimes the infrastructure isn't already there and then the house values probably rise a greater percentage.
Nick S  26th May, 2008 23:52:18  

Davies, L. 2005, "Not in my backyard! Sports stadia location and the property market"
Most sporting stadiums are built in large urban centres, with all the established infrastructure and amenities. The introductoin of the stadiums tend to also increase the level of infrastructure to cope with the influx of people at game times and also the number of services especially bars and restaurants. Therefore, stadiums do have an impact on property prices because of the number of people (and associated spending money) that comes to the site on a regular basis. The local residents recieve the benefits of the increased transport infrastructure and services and therefore the area becomes more attractive to live. The negative factors such as noise and congestion are not permanent problems, that is, they are usually just during game time and so they do not have the same impact on property values as the positives do.

KS  27th May, 2008 14:17:12  

Davies, L. 2005, "Not in my backyard! Sports stadia location and the property market"
There is in my opinion definitely an increase in property values in areas surrounding large sports facilities. This is obviously related to the improved public transport that surrounds most sporting precincts (Jolimont and Melbourne Park are prime examples). Also the noise and congestion that can be caused by these sporting precincts occurs at most once or twice a week
DM  3rd June, 2008 22:46:59