A critical exploration into the socio-economic impact of Olympic megaprojects

A comparative analysis of the 2012 London Games and the 2016 Rio de Janeiro Games designed to determine whether the Olympic Megaproject model is conducive to long term sustainable development in cities.

This article was originally used in submission for a module in the MPlan degree at the University of Sheffield. All uses of this work should be appropriately cited in line with the professional citation method used.

Author Name : Kiran Henry

Publication Date : 17/08/22

Introduction:

In recent times, megaprojects and large-scale redevelopments have become an ever-increasingly attractive prospect for cities. The influx of private investment capital and the aim of creating culturally significant districts have enticed cities across the global North and South. However, under the polished veil of clever marketing and glamourous proposals lies the damning issues of displacement, segregation and a lasting legacy with a bitter taste. This article aims to explore how a megaproject like the Olympic Games can impact the modern city. Through the context of London (2012 Olympics) and Rio de Janeiro (2016 Olympics), it analyses the social and economic effects these projects have both during the lead up to the Games, and also in the years that followed.

Exploring the ‘Olympic Legacy’

An intrinsic part of being a host city for an Olympic Games is to set out a rounded strategy which displays the “long-term benefits created for the host city and its people before, during and long after the Olympic Games” (International Olympic Committee, 2021). However, as Thornley writes in their article, the Olympic legacy is a ‘vague’, subjective and multifaceted concept with the more prominent side concerning the branded image and physical architectural developments, while a ‘darker side’ of social consequences exists in the shadows (Thornley, 2012, pp. 206-207). Developments such as the Queen Elizabeth Olympic Park have undoubtedly had positive impacts on the city, be that via boosting tourism or the creation of an open and biodiverse green space in the heart of the East End of London. But like many megaprojects, behind this aesthetic positivity are the arguments raised over the displacement of local communities away from Stratford and the gentrification of what is historically the working class and industry side of the city. An example of this in Rio de Janeiro is the favela Vila Autódromo which was subject to land levelling to make way for the construction of media centres, parking and stadia (Ivester, 2017). In essence, the Olympic legacy is an intangible concept that whilst creating infrastructure and a new image, can exacerbate social inequalities – particularly in global South host cities such Rio de Janeiro.

London 2012 and rising living costs

The predominant location for the 2012 Olympic Games was Stratford, located in the London Borough of Newham – a constituent part of the legacy working class East End. Despite attempts to minimise a historical socioeconomic imbalance, strong arguments can be made for a geographical East-West London class divide existing still in the present day (Watt, 2013). In the context of the London Olympics, the demolition of social and co-operative housing designed for lower-income citizens for the construction of new commercial infrastructure was a highly controversial act. Perhaps the most notable example was the acquisition (via Compulsory Purchase Orders) and eventual destruction of the Clays Lane Estate; of which the resulting brownfield land was used to build the Athletes’ Village for the Games (Hatcher, 2012) (Watt, 2013). The justification of this was “the benefits the Olympics would bring through the regeneration of Stratford as well as the event’s long-term legacies were too important to forego for the sake of the residents” (Hatcher, 2012, p. 201). A clear prioritisation of professionalising these areas eventually leads to cyclical displacement of residents long into the years succeeding the Games itself.

Now ten years on from the 2012 Games, the question remains; who is benefitting from the housing in conjunction with Olympic Legacy. In a post-Games evaluation report, the DCSM[1] claimed 10,000 houses had resulted from the megaproject (DCSM, 2013). Of this total, 35% were designated affordable housing (DCSM, 2013) yet the report fails to recognise the extensive waiting list or homelessness levels, a shortcoming referred to as “an analytical bias of the narrow economics rather than social priorities” (Cohen & Watt, 2017). Amidst rising housing costs, particularly in the Private Rental Sector (PRS), the long term concern is whether the 35% was successfully executed not only in initial sales but consistently along future sales in years to come (Shelter, 2013). A large problem though in relation to the affordable house provision is the big disparity in the local housing cost to income ratio. As detailed in Figure 1, while the stock may be termed affordable, rent costs will take up a disproportionate share of income for local community residents.

East London Borough% of median wages required to rent an ‘affordable’ one bed flat in the East Village, Olympic Park (rents set at 80% market value)
Hackney52%
Newham46%
Tower Hamlet41%
Figure 1 : (Shelter, 2013, p. 7)

As part of its large scale intervention in East London, the Olympic megaproject has a social responsibility to ensure communities are preserved and that its own development projects avoid gentrifying the area beyond the reach of existing residents.

Rio de Janeiro 2016 and aggressive neighbourhood removal

A similar pattern to the socioeconomic fallout of the 2012 Olympics can be seen in the 2016 Olympics hosted by Rio de Janeiro. As aforementioned, the Vila Autódromo favela has been a key site for resident displacement, and across the city a few months before the opening ceremony of the Games, “4,120 families had been removed” as a result of the event (Crout, 2018). It is key to note Crout using the term ‘removed’ instead of displacement, with academics attributing this preference in language to the practical, forcible evictions of residents – particularly in Vila Autodromo (Ivester, 2017) (Magalhães, 2013). In 2012, the Secretary of Municipal Housing for Rio de Janeiro declared 10% of the city’s favelas would be “removed in preparation for the FIFA World Cup and Olympics” (Ivester, 2017, p. 971). In comparison to London, the spatial change undergone in Rio de Janeiro was much more aggressive and at a larger scale. The Olympic megaproject had a long term impact of housing on East London; likewise a similar pattern has emerged in Rio de Janeiro with the pre-Olympic acquisition of favelas. One favela, Vidigal, saw “a threefold increase in rents in the first year and a half of pacification” (Gaffney, 2016, p. 1142) as a result of private capital investment. The alternative outcome for a pacified favela if living costs aren’t rising has tended to be its complete destruction. Via these two methods, the Olympic legacy is failing to meet social needs in the neighbourhoods which need it most.

Comparing the different spatial change methods used by each city

The residence situation as a result of the Games differs slightly in respect to their hard / soft approaches. A more gradual and soft gentrifying transition in London has almost created a social void in certain areas wherein the district remains a mix of brand new private capital investment infrastructure and existing communities which have become pushed away, but not levelled off like in Rio. Nowhere is this more apparent than the two sides of the rail line splicing Stratford. As shown in Figure 2, on one side exists the upmarket Westfield, East Village and the Olympic Park itself and on the other side the working class but more neglected Stratford High Street and West Ham.

Figure 2 (London) : Map highlighting the close vicinity of the two districts at opposing socioeconomic statuses (Blue section represents Olympic gentrification, red section represents the existing community pushed further East)
Figure 3 (Rio de Janeiro) : Map highlighting the prominence of the mass removal and levelling of land (Blue section represents Olympic gentrification, red section represents the former Vila Autodromo favela and the yellow section represents levelled empty land

In comparison as shown in Figure 3, Rio de Janeiro has a much harder approach where such differing communities aren’t living within such close vicinity. Instead the Olympic Park and large swathes of land around it are either abandoned of their former vibrant communities or home to upmarket real estate. Six years on from the Games and much of the surrounding land is still empty and levelled while the Park itself is merely a ghost town deprived of long term economic prosperity. Unlike in London, Rio doesn’t have the aforementioned social or cultural void separating the two distinct socio-economic areas but instead exists a spatial apartheid whereby original communities have become non-existent in the landscape.

London 2012 and its continued cultural sporting significance

Megaprojects such as the Olympics are inextricably woven into the socioeconomic fabric of a city for many years after the event itself. Objectively, these types of projects can stimulate economic growth – the issue this essay is fascinated with is who realistically reaps any growth made? Whereas is Rio, many of the venues were deemed unsafe for the public and thus caused to be closed (Caproni, 2020), the Queen Elizabeth Olympic Park has enjoyed a successful era of a hybrid sports and leisure park. Poor maintenance by the governing bodies in Rio has seen some of venues fall into disrepute, an outcome which is even more disappointing when looked at in the context of the previous community which used to exist there. As such, one can conclude the lower income communities are the biggest losers in the Rio megaproject insofar as any economic growth is not going into repairing the event sites nor funding sustainable relocation projects. Since the London 2012 Olympics, venues in the park such as the Aquatics Centre and Lee Valley VeloPark are consistently utilised for national and local sporting functions. But the biggest transformation of infrastructure is the Athletics Stadium which now houses Newham based football club, West Ham United. Although not in a direct manner, this particular re-use of facilities gives back to the traditional East End working class community in a social and cultural way. Born out of local industry, West Ham United has acted as a social hub for the working class people of Stratford and Newham Borough (Korr, 1978). Allowing this type of community to benefit from world class sporting facilities shows an element of inclusivity in trying to maintain the park as a place for the many generations who have resided in the area. While the initial deal for the stadium’s new function was initially mired in economic controversy (an issue that can be simplified to taxpayer funding and financial losses for the LLDC[2]), there has been an attempt to bring back in the original communities on a long term basis – a conclusion which cannot be made convincingly for Rio de Janeiro.

The 2012 Olympic Stadium, now converted into the home stadium of West Ham United Football Club (Photo by Samuel Regan-Asante on Unsplash)

Rio de Janeiro 2014 and the political-social dichotomy

A core facet of the Olympic Legacy is to introduce new social projects and infrastructure that improves the standard of living of residents. However, much like many urban dilemmas, projects which should benefit local families become entangled in political agendas. A key example of this from Rio was the promise of converting the Handball Arena into four state schools for local families in the Barra de Tijuca district. Set to be built almost immediately after the Games, construction has only just begun. This delay can partly be contributed to switches in political party power in conjunction with multiple members of the Brazilian Olympic Committee being convicted for corruption (Reuters, 2022). While the eventual completion of these schools will be beneficial, the argument must be raised over their intended demographic. The district of Barra de Tijuca can be described as a middle-upper class region of the city (Xavier & Magalhães, 2003), a factor that highlights the social inequality of the Games’ aftermath. Families previously located in enclave favelas such as Vila Autodromo will not only have had their communities levelled off for development, but arguably won’t experience the benefits of these new schools and infrastructure. Looking to the future impact of these schools, the argument can be made they will inevitably widen class gaps and indexes such as adult literacy rate. The long term social impact of the Rio Olympic megaproject is centred around a partisan viewpoint; in essence, the governing powers are investing capital into areas they deem good for an aesthetic brand and know will return the political favour.

Conclusion:

In conclusion, both London and Rio de Janeiro have experienced gentrification and a widening of social inequality, particularly as a result of private investment from outside the existing local communities. However, one difference between the two cities is the transition and repurposing of the megaproject. Where London has ultimately created a popular cultural long-term sports hub and green space, Rio de Janeiro is still attempting to recover from mismanaged and essentially abandoned megaproject infrastructure. It is in this distinction that while both cities have experienced financial losses, in the long term London seems to have the brighter wider economic future; an expected trend from a global North city. In the context of the Olympic Legacy, both cities and their respective megaprojects highlight its shortfalls insofar as it is repeatedly proven in its current format to be an unsustainable model for long term social issues such as housing and displacement. 


[1] Department for Culture, Sport and Media

[2] London Legacy Development Committee


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