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Sports stadiums with the 'Wow!' factor deliver extra economic impact finds study

Dramatic and eye-catching sports stadiums like London's Olympic arena can drive up local property prices by as much as 15 per cent through the sheer quality of their architecture alone concludes a new study by urban economists. 

It finds that unconventional and iconic stadium architecture can create new landmarks and a sense of local identity which deliver economic benefits beyond those generated simply by increased tourism or commerce. 

South Africa's King's Park stadium in Durban, which has been built for the World Cup in a shape that suggests the national flag -  is another example of the trend which is seeing iconic design being used as a 'calling card' for the home city. 

The study by Gabriel Ahlfeldt from the London School of Economics and Political Science and Wolfgang Maennig, from the University of Hamburg, is published in the International Journal of Urban and Regional Research today (Wednesday 9 June) 

The authors examined several existing sets of data measuring land prices or rents in city neighbourhoods both before and after stadiums were constructed in their midst. Using the stadium's completion date enabled them to see precisely how prices rose (or fell) after work was finished. They then applied economic models to account for differences which were attributable to other environmental factors – such as new roads or other infrastructure improvements. With these variables accounted for, say the authors, it is reasonable to attribute the remaining rises or falls in property value to the 'aura' of the stadium – its impact on the built environment. 

Stadium pictureThe evidence showed that, internationally, stadiums are responsible for a significant increase in values of between eight and 15 per cent. However, this effect drops as you move away from the stadium, disappearing altogether at a distance of three miles. The stadiums studied ranged from the Velodrom cycling and swimming complex in Berlin to the FedEx field in Maryland, home of the Washington Redskins American football team. 

Dr Ahlfeldt said: 'Striking architecture does, in itself, seem to have an economic effect on the surrounding area. Of course rising land values or property prices may or may not be seen as a good thing by those who live there, but our research shows that unusual, sometimes iconic, buildings can have a powerful spillover effect for their surrounding communities. 

'We can expect to see this effect powerfully in London over the next two years with the development of sports sites for the Olympic games in East London. ' 

The study points out that not all stadiums achieve the 'iconic' effect. For example, the stadiums built or refurbished in Germany for the 2006 World Cup tended to be functional rather than innovative. On the other hand, stadiums do not have to dominate or overwhelm their surroundings in order to generate an aura – some modern designs can be more self-effacing, enhancing their city surroundings while blending in with them. 

An example is the St Jakob Park in Basel, Switzerland which hides behind a plain façade during daylight and is barely noticeable, but which emerges dramatically at night when it is lit either with the colours of the city's football team or with the white cross on red of the Swiss flag. 

However the study concludes by arguing that it is still not clear which combination of ambitious design and integrated city enrichment can maximize the public benefits of sports stadiums. Further study of new construction projects will be needed to provide empirical evidence. 

Stadium architecture and urban development from the perspective of urban economics   

Gabriel Ahlfeldt's research profile



 For more information contact:

 Dr Gabriel Ahlfeldt 020 7852 3785 g.ahlfeldt@lse.ac.uk

LSE press office 020 7955 7440 pressoffice@lse.ac.uk


9 June 2010