Travis Mullen Independent Study: Real Estate Professor Betz

Summary: Rough Draft

The Olympic Games occur every four years and it symbolizes global integration, international competition and national pride. It is the largest gathering of people around the world. It is an event that brings together the spirit of the athletes, fans, and citizens from every part of the globe. People often assume that holding the Olympic Games leads to an increase in tourism, GDP and improved infrastructure for the host city. This would seem likely, but it is not always necessarily true. Even though there are short-term benefits that can be easily estimated and understood, the long-term benefits are usually less tangible and are the reason why the host city bids so much money and agrees to fund the celebration. The city hopes to regain that outlay of money over time by showcasing themselves to the world in a positive fashion and increasing an awareness of their city. The eventual desire, of course, is to increase tourism, revenue, and other opportunities for their city. This study will focus on benefits from the Olympics that are the most likely and almost guaranteed to add value to the city. Despite the fact that there is never a complete assurance the host city will profit from the Olympics, the real estate market, in select locations, is an area believed to reap the most benefit from the Olympic Games. This study is going to analyze the parts of commercial and/or residential real estate that should increase over time due to things like improved infrastructure and state of the art sports facilities. The study will also look at intangible benefits like local pride, confidence and optimism. During this study

we will start to understand also that holding the Olympics could lead to a significant loss to the host city and could lead to a fall in real estate prices, value, or a hike in taxes for the surrounding area. The intangible benefits we will be discussing are broken into these categories: uniting people/feel good factor/national pride, legacy of sports facilities, and promotion of host city. Tangible benefits will be broken into the following categories: improved infrastructure, state of the art facilities for athletes, improved amenities for the handicap who require additional accessibility, increase in local gross domestic product, and lower unemployment. The report will attempt to provide substantial evidence that shows an increase in real estate prices over that of its peers who have not hosted an event. Real estate is part of a complex system in which one individual cannot fully understand all the variables that can affect the real estate prices. The goal is to determine what areas of real estate are investment grade and will appreciate in value at an increased rate without taking on additional risk. Real estate is an investment opportunity that will be around forever and is a necessary component in modern day portfolio strategy. The study will be focusing on both commercial and residential real estate markets. Lets start with a look at some tangible benefits. When host cities are preparing for the Olympic Games, they spend a significant portion of the money dedicated for the games on infrastructure. The most important things get improved first; health care, security, energy, education, airports, sports facilities and the overall landscape in the city is cleaned up. All of these changes, additions, and spending raises the value of real estate in the surrounding areas by creating a catalyst that raises the minimum price paid for real estate in that area. These improvements hold significant value to potential residents; especially high income individuals

who demand the fastest and newest innovations. The new buildings and improvements in the host city are state of the art. Often times the technology being installed and built is top of the line; the best in the world at the time. The largest and most advanced companies get hired to complete the jobs for the Olympics. General Electric provided "Green" energy infrastructure for the 2012 London games. These improvements are handled by the International Olympic Committee (IOC). They determine what areas need the most improvements to accommodate both the athletes and tourists. They want to make sure everything is being built to appropriate standards and will be beneficial for the city for years to come. Building designs will be universal and designed to meet the needs of young, old, the able and disabled. Laws relating to the structural needs of the handicapped will be followed. Most individuals care as much about the neighborhood/surrounding area as they do about their house. Older individuals for example are interested in receiving the best medical care close to their home. They are also focused on things like increased security, ease of transportation and a clean environment. In Athens' 2004 Olympic Games, Greece used the Olympic Games as an opportunity to upgrade state healthcare.i The infrastructure upgrade included eleven general hospitals and seven specialist units that were modernized for the Olympic Games.ii Public hygiene also needs to be improved for the Olympic Games. Health inspectors go around the city and monitor the quality of food and cleanliness of restaurants in the area.iii "Sports medicine is non-existent in Greece, and most sporting events are held at the players' own risk".iv All these improvements increase the attractiveness of living in areas that have access to these facilities. The improvements to the medical services industry in Greece was around $130 billion with a large portion of that going towards repairing and improving conditions in Athens.

In 2002, the Beijing Municipal Government issued the "Beijing Olympic Action Plan", which put forward a guideline to improve healthcare services. The Health Legacy of the 2008 Beijing Olympic Games: Edited By: Jin Dapeng, Arne Ljungqvist, Hans Troedsson, Chapters 1 through 5, are included to demonstrate the comprehensive study and efforts made to improve an Olympic City in regards to its health services. This not only positively impacted the visitors to the games but its citizens, communities, and environment on a long term basis. These improvements included the following categories: more developed medical services, bolstered public health system, enhanced emergency medical response (including the prevention and transmission of communicable diseases), and increased healthcare education. The plan also discusses the assessment process to determine the health needs for the host city and the Olympic athletes and visitors and how to ensure that the highest standards of health and medical services will be met during the event. These upgrades to health care services are priceless to the individuals living in these improved areas. Real estate prices in areas with enhanced health and medical services can demand a premium price tag to those individuals looking to buy a home and who desire and/or require such amenities.

People go to great measures to ensure their personal safety and are especially concerned when it involves the security and well being of their children. Attendance at the games and events much be considered safe for visitors and athletes. In the Yale Journal of International Affairs, an article by Samantha R. McRoskey, titled Security and the Olympic Games, describes measures that must be considered when committing to developing a security strategy for the Olympic game city and surrounding areas and infrastructure. Every effort should be made to include security measures- reacting to crime and preventing threats- in all buildings, facilities, activities, etc. that may be part of the celebration. For the 2012 Olympic Games in London, roughly one million surveillance cameras were installed.v The Association of Chief Police says extra money will be made available to ensure officers in the area are properly trained. These officers will remain in the area for many years and will have additional training that will ensure a higher level of security in the city.

When hosting the Olympics, the host city wants to properly "brand" the city. Since the games will be watched worldwide, the host city wants to make sure it looks like an attractive place to visit and to live. The host city often beautifies the city and has a "clean the streets" project which removes potential eye sores such as rundown buildings, prostitutes and homeless people. They also want to improve the landscape by building parks, walking paths, trees and flower beds throughout the city. Atlanta spent $4.5 million on trees alone to improve the city scenery.vi These trees will last for decades and improve the scenery around the city for the residents to enjoy for many years. London 2012 built Olympic Park which includes playgrounds, "flowering meadows" and walkways around the city. Atlanta spent another $70 million to put up new street lights, improve sidewalks, plazas and parks.vii These renovation projects will survive and improve the image of the city for years to come.

Olympic Park London 2012

Dahshi Marshall, a transportation planner in Atlanta, believes the Olympic Games were a renaissance for the city. Centennial Olympic Park most likely would not have been constructed which now serves as the city centerpiece. Major high-rises, museums and attractions have been built on the periphery of the park that serves as a major event space. The infusion of federal funds leading up to the games allowed the regional transit authority, MARTA, to construct the North line which connects hundreds of new residential units and thousands of square feet for new commercial space. Two arenas were constructed for the Olympic Games Turner field and the Georgia Dome which are currently used by the Atlanta Falcons and Atlanta Braves. The Olympic village is now used by Georgia Tech as dormitories. The Olympic Games served as a catalyst for this urban renaissance that added nearly 100,000 new residents - which is a growth rate of 25% during that time.

"Green Games" is a major factor the IOC uses when choosing a potential host city. They want to ensure the city has clean air and is not polluting the water to ensure the health of the athletes, tourists and also the city residents. The IOC also wants to support long-term improvements; power plants that are built are more energy efficient and clean. Trash control is also a major factor, so solid waste facilities are built to higher standards to ensure cleanliness. Beijing took huge strides to reduce pollution around the city. By conducting this environmental turnaround, Beijing will become more desirable for foreign and local individuals that are considering living in the area. Included below is an accounting of the movement to make Beijing a suitable location for the Olympic Games and the challenges and planning needed to fulfill the IOC green commitment. The Green Olympic Movement: Beijing 2008 by Stefanie Beyer
II.A.Beijing's Olympic bid

The impetus to China's green Games was due to a national defeat. In the early 1990s, backed by its enormous economic growth, China was confident that its bid to host the 2000 Summer Games could beat the bid of Sydney, Australia. However, Sydney held a trump card. In response to the emerging international development in the official policy of the International Olympic Committee, that environment would join sport and culture as the third pillar of the Olympic movement, Australia made sustainable development and planning a major component of its bid. After consultation with various environmental experts and non-governmental organizations (NGOs), guidelines were published covering the fields of energy and water conservation, waste avoidance and clean transportation. The Olympic Village was a model of environmental awareness in regard to architectural design. It addressed the problems of global warming, ozone depletion, biodiversity, air, soil and water pollution as well as resource depletion. Solar power was used for lighting, water heating and air conditioning, and water was to be treated on-site for re-use.8 In the end, Sydney was two votes ahead. Sydney was the first city to win an Olympic bid with a set of coherent environmental criteria attached to its application. Learning from Sydney's strategy to green the Games, China again presented a bid to host the summer Games in 2008. In order to beat other serious contenders like Paris and Toronto, China paid particular attention to the newly created third pillar of the Olympic movement and supported its bid with a massive environmental campaign.9 The Beijing bid committee presented a comprehensive plan on sustainable development covering the areas of venue construction, transportation, pollution control and waste management. The bid revealed frankly Beijing's preexisting environmental problems, especially the city's air-quality challenges caused by considerably high levels of sulphur dioxide and nitrogen oxide resulting from the city's dependence on coal use and increasing number of vehicles. Also, the above average concentrations of total suspended particulates directly linked to the desertification of northeast China were addressed. At the same time, the commitment to resolving these problems was emphasized as well as improvements presented that Beijing had already achieved, most notably in the field of coal combustion. Since 1998, the city had successfully converted around 44,000

small coal facilities to natural gas and some 8,600 coal boilers to cleaner burning fuel. Moreover, higher-quality coal has been promoted to limit sulphur dioxide. In order to tackle vehicle emission, 1,900 natural gas buses have been in use, leaded gasoline banned since 1997 and higher vehicle emission standards adopted. As a result, sulphur dioxide had dropped 44 per cent in 2000 and levels of nitrogen dioxide and total suspended particulates had decreased by 13.7 and 14.5 per cent, respectively.10 However, Beijing's average levels still exceeded the World Health Organization standards considerably, with concentrations of total suspended particulates up to almost 400 per cent over.11 Nevertheless, Beijing had demonstrated significant efforts to improving its environment for future Olympic Games. In July 2001, the Games of the 29th Olympiad were awarded to the city of Beijing, which was welcomed enthusiastically with celebrations and fireworks throughout China.

II.B.Environmental policy as the third dimension of the Olympic movement

China entered the contest to present the winning bid for the 2000 Olympic Games at a time when a clearly articulated environmental policy had not yet been adopted by the International Olympic Committee. It was not until the 1998 Winter Olympics at Nagano in Japan that alongside sport and culture, environmental protection had officially become the third dimension of the Olympic movement. The historical benchmarks for the development of this policy were the widespread environmental damage caused by the Winter Olympic Games 1992 in Albertville in the Savoy Region of France and the subsequent environmentally conscious Games of Lillehammer, Norway in 1994 that had urged the International Olympic Committee to respond and present a strategy for repelling the adverse impacts of the mega event. The Olympic Games in the French Savoy Region were in several aspects unique: never before had Olympic Games be so regionalized, with competition sites located in 13 Alpine communities spread over 1,657 square kilometers and never had a landscape been that dramatically and irreparably marred by this mega event. Especially, the clearing of land for the construction of facilities was extensive. In order to build the Olympic high-speed downhill course, aerial cableways, access roads, parking lots and mountain sides were blasted away and long stretches of woodland were rigorously stubbed out. The bobsled course, built on unstable ground in an avalanche zone, had to be equipped with a pipeline carrying 45 tons of volatile ammonia in order to cool the track.12 The severe damage revealing the lack of any environmental policy and guidelines for bidding and hosting cities had a long-term impact on the global mandate of the International Olympic Committee. It had become obvious that environmental concerns raised by the Olympics could not be confined to the suitability and accessibility of locations for athletes, the international media and sponsors or to merely aesthetic improvements of tourist, cultural and industrial projects being tied to the economic development of the region. Just two years after the Winter Olympics in Albertville, due to the coincidence of the International Olympic Committee decision to change the Winter and Summer Games sequence, Lillehammer was the host city of the 1994 Winter Games. Lillehammer was the first city to add the sustainable environmental policy to the already existing pillars of the Olympic movementsports and culture. These Games, introducing the environment as the third dimension and in a collective effort, involving the government, environmental agencies and environmental groups in the planning process, should later be referred to as the Olympic environmental showcase.13 About 20 environmentally concerned projects were initiated and a four-point plan for the environment was drawn up, focusing on the harmonious integration of facilities into the landscape, on the use of natural and local materials and on measures addressing energy conservation and recycling. The environmental impact of the Olympic Games in Albertville and the advanced local initiatives of the Norwegian Games had significant implications for environmental protection in future Olympic Games bids. They evoked global awareness of the environment and activity within the International Olympic Committee at the time, when due to the United Nations Earth Summit Conference in Rio de Janeiro, the environment had emerged as an issue of global social policy. In 1994, the Centennial Olympic Congress held in Paris recommended amendments to the Olympic Charter to accommodate environment as the third dimension of the Games. Subsequently, in 1996, the following paragraph was included into Chapter 1 of the Olympic Charter: () the mission and role of the International Olympic Commission is () to encourage and support a reasonable concern for environmental issues, to promote sustainable development in sport and to require that the Olympic Games are held accordingly.14 Henceforth, the environment was

adopted as one of the fundamental objectives of the Olympic movement and the Olympics' potential to play an active part in the promotion of sustainable development was officially recognized. The IOC Sport and Environment Commission was created which, in close affiliation with the United Nations, elaborated a framework for the sustainable development of future Olympic Games. In 1999, an Agenda was developed setting out basic concepts for the formalization of the environment policy in order to provide guidelines for both governing bodies and individuals.15 It covers measures for the improvement of socio-economic conditions, for the conservation and management of resources and for strengthening the role of groups in order to explore the host city's maximum environmental potential and to ensure that the policy of sustainable development is integrated into the Olympic movement's actions.

III.Solutions to Beijing's environmental key problems

III.A.Beijing's Olympic action plan
The Beijing Organizing Committee for the Olympic Games, established in 2001 under the State Council, announced the 2008 Games as the Green, High-tech and People's Olympics.16 Motivated by the Olympics, Beijing will develop around 25 million square meters of property in the 200208 period. This not only includes the 37 competition venues and additional 59 training facilities, but also the construction of a number of commercial projects as mega-malls, the redevelopment of city areas and numerous cultural and tourism-related issues. The Olympic Park in which the Olympic Village and 13 venues are located will occupy 12 square kilometers and provide the city with a major new central parkthe desperately needed green lung in central Beijing.17 The hosting of the 2008 Olympic Games will thusafter the construction of the Three Georges Dambe the second largest public works project ever undertaken in China.18 Of the estimated $25 billion devoted to the Olympic preparations, nearly half has been designated for environmental improvement projects. A total of $12.2 billion is earmarked to be spent on projects that range from changing energy policies, retrofitting high-polluting enterprises, and moving factories to improving infrastructure, reducing auto emissions and solid waste control. 19 In order to improve the environmental conditions in preparation to host the summer Games, the Beijing Olympic Action Plan and supplementary specific sub-plans for environmental protection, for structural adjustments of the energy sector and for infrastructure development were released by the Olympic Organizing Committee in 2002. Those plans lay out an ambitious timeline dividing the remaining period until the opening of the Games into different operational stages. Within the development stage ending in June 2006, all Olympic venues and key projects for environmental protection and infrastructure ought to be completed. Time for the examination and improvement of projects as well as for the testing of venues and facilities shall be reserved until the opening ceremony in July 2008.20 The provisions dealing with the environmental development of Beijing target the construction of a favorable ecological city that features green hills, clear water, grasscovered ground and blue sky by means of afforestation, rational utilization of water resources and by the promotion of ecological agriculture.21 They primarily focus on the reorganization of Beijing's energy structure as well as on air, water, noise pollution and solid waste control.

III.B.Reorganization of Beijing's energy structure

The energy-derived air pollution constitutes the greatest environmental problem in Beijing. The growing energy demand that has been mostly provided by coal is primarily responsible for this situation since coal combustion introduces large quantities of carbon dioxide and sulphur dioxide into the atmosphere.22 China's disproportionate reliance on coal is striking. Coal accounts for almost two-thirds of China's total primary energy, followed by oil, natural gas and hydropower.23 The expected coal demand in 2008 was projected to reach 31.60 million tons, calling for a drastic energy mix reorganization.24 In this context, Beijing's plan to significantly reduce coal consumption and to replace coal with clean energy sources has to be seen as the centerpiece of the Olympic Action Plan. According to the Plan, the coal-dominated energy mix must be overhauled to establish a market-based quality energy supply system, so as to ensure the sustainable development of Beijing's social economy.25 Under this Plan, coal will provide less than 20 per cent of the terminal energy structure and be of higher quality with lower sulphur content.26 In order to keep coal use at less than 15 million tons in 2008, major changes have been planned. This includes the re-engineering of the power structure supply, the limitation of the energy consumption growth rate and the employment of

new technologies in order to increase the efficiency of energy resources. According to the Plan, several coke plants and mills will stop coke production and power plants will switch fuels.27 The expansion of the centralized urban heating system aims to reduce coal consumption. New energy resources such as natural gas, geothermal, solar, wind and biological energy shall be employed as alternatives to coal.28 For instance, the Plan calls for the building of 160 geothermal wells by 2008 to heat 0.40 million square meters of the stadiums and gymnasiums located in the Olympic Park. Furthermore, 90 per cent of hot water used in the Olympic Park will be provided by solar energy. Wind power, with a potential capacity of 50 megawatts, is proposed to supply 20 per cent of the Olympic Park's electricity needs.29 Neither nuclear power nor hydroelectric power is specifically mentioned in the Olympic Action Plan as long-term alternatives to Beijing's energy supply, although China plans to expand its nuclear and hydroelectric power-generating capacities. The number of nuclear reactors is scheduled to increase from the current seven to 30 by the year 2012.30 This is very likely to be due to the unequal distribution of hydroelectric power resources throughout the country and the decision to set up nuclear power plants in inland regions. Also, none of these energy sources is free of environmental concern. For instance, the Three Gorges Dam turned out to be extremely controversial as the flooding caused by the dam submerged many villages, towns and wildlife preservation areas.

III.C.Air pollution and transportation solutions

Besides coal combustion, vehicles contribute a large share to air pollution by emitting carbon monoxide and particulate matters such as lead and sulphur. The relatively high particle concentration causes severe problems especially. Today, about 2.3 million vehicles drive on Beijing's roads. The capital's motorization rate increases by more than 10 per cent annually, reaching a number between approximately 3 and 4 million vehicles by the time of the Olympics in 2008.31 Moreover, China's number of vehicles grows nearly twice as fast as the extension of road construction. Beijing's population has continuously been rising and is expected to reach the total of 15 million in 2008.32 Poor road conditions and lower average driving speeds increase congestion and accidents. After lung cancer, the second leading cause of deaths in China is traffic accidents.33 The urban railway network provides only an inadequate service, especially to the city's northern and southern areas. Beijing is also home to numerous polluting factories in the inner ring of the city. Moreover, Beijing suffers from severe dust storms that blanket the city with around 26,000 tons of dust each spring. Roughly $5.4 billion have been earmarked to resolve the air pollution problem. The ambitious aim is to meet the World Health Organization standards of sulphur dioxide and nitrogen dioxide as well as to achieve levels of particles comparable to those in developed countries.34 To tackle the causes of pollution, various measures are put forward, such as the adoption of stricter emission standards, the improvement of industrial layouts and cleaner production processes. Some 200 polluting factories primarily serving the chemical industry which are situated inside the city will be relocated outside the fourth ring road by 2008.35 In an attempt to control sandstorms in Beijing, major forestation will be undertaken. A 125-kilometre greenbelt is about to be planted, increasing the forested area surrounding the central city by 50 per cent. Urban forestation and beautification projects shall be implemented throughout the city with the goal of greening half of Beijing in 2007.36 In order to reduce high emissions due to less fuel-efficient engines and a high number of vehicles using diesel, the Olympic Action Plan includes measures to enforce more stringent standards. Leaded gas will be banned and 90 per cent of Beijing's 20,000 public busses and 70 per cent of Beijing's taxis shall be converted to cleaner energy by 2007.37 However, the Olympic Action Plan gives the main priority to public transportation. By modernization of the rail transport and road networks, up to 60 per cent of the daily commuters shall be carried by public transportation.38 A new urban railway system consisting of 154.5 kilometers shall carry approximately 2 billion passengers a year. In order to achieve this goal, rail transportation, both for the subway system and trains, is planned to be expanded. According to the Olympic Action Plan, eight new subway lines will be built with a total length of 114 kilometers. Also, 650 bus transit lines shall be available, carrying 19.5 million passengers a day.39 Beijing also plans to increase the average auto speed to enable transportation from the centers of suburban counties to the downtown area within one hour. For the convenience of the participating athletes, the competition venues shall be reachable within 30 minutes' drive from the Olympic Village.40 In an effort to implement such

changes, Beijing will have to undertake major road construction. Newly built and rebuilt urban roads will total 318 kilometers, including 54.1 kilometers of urban expressway, 86.7 kilometers of main roads and 96 kilometers of roads in the central area. In order to reduce commuting between counties by 2008, an extensive system of highways and expressways shall be constructed.41

III.D.Water solutions

According to the provisions of the Olympic Action Plan focusing on sustainable water utilization, the resourcing of water constitutes the core of a healthy ecosystem. Any utilization and development of water resources should consider the water cycle and avoid pollution.42 In fact, besides flooding, which has occurred more frequently and caused more damage in recent years, water shortage and water pollution have stressed China's water system. Water shortage affects more than half of Chinas cities, including Beijing, annually and almost one-third of urban rivers cannot be used as irrigation water.43 Northern China, where Beijing is located, has only one-fifth of the per-capita water resources of southern China, causing water extraction to exceed sustainable levels.44 The water shortage amplifies the pollution. Water mismanagement has worsened the situation. Water has neither been allocated nor used sustainably. Currently, only 60 per cent of water used for agriculture passes through ditch irrigation systems.45 Pollution has not been prevented efficiently and recycling options have hardly been pursued.46 China's industries recycle water at a rate of about 40 per cent whereas OECD47 countries show a rate of about 70 per cent.48 In an effort to curb Beijing's water-related problems, especially to protect groundwater sources and to restore reservoirs, the Olympic Action Plan provides preventive measures such as the construction of sewage-treating and recycling systems. More than 90 per cent of the sewage in Beijing's urban area shall be treated by 2008 and half of the treated sewage water recycled.49 Although industries are responsible for more than half of the wastewater discharges, municipal wastewater is rising. Beijing aims to extract and treat sewage directly through wastewater treatment facilities in order to provide water for environmental, municipal and production purposes. Eventually, Beijing's main water resourcesthe Miyun and Guanting reservoirsshall again become sources of potable water.50 Interestingly, China's ambitious SouthNorth Water Transfer Project, which aims to alleviate water shortages in northern China by diverting water from southern rivers of the country, is not mentioned in Beijing's Action Plan. This is surprising, since the Middle Route Canal Project that diverts water from the Danjiangkou Reservoir to Beijing was specifically accelerated in order to be completed before the Olympics in 2008. In total, a system of three south-to-north cannels, stretching across 1300-kilometre distances in eastern, middle and western parts of China, shall provide Beijing, the Tianjin municipality and the province Hebei with water.51

III.E.Solid waste control and noise control solutions

The Olympic Action Plan also puts forward solid waste and noise control management policies. In order to reduce industrial, commercial and domestic solid waste at their source, measures for treatment, separate collection and recycling shall be introduced and promoted. A total of 80 per cent of industrial solid waste ought to be reused by 2005 and a strict management system for hazardous waste be adopted to realize 100 per cent safe treatment and disposal. A number of facilities shall be constructed with a capacity to treat all domestic refuse in both the urban and satellite towns until 2005. By the end of 2007, 80 per cent of the central towns should be provided with their own treatment facilities.52 Noise abatement shall give priority to controlling noise pollution caused by vehicles, construction sites and social activities. Especially large automobiles will be restricted to certain routes and speeds. Advanced techniques such as noisedeafening structures shall be employed to decrease traffic noise. Noise levels in urbanized areas shall meet national standards by 2008.53

Among other tangible benefits that should improve the host city long term is transportation. Tokyo was the first city to significantly reorganize transportation. They added 22

expressways and 5 subway extensions. Most host cities have not reorganized the transportation routes and destinations around the city for many years. The IOC wants to make sure travel time and distance is kept to a minimum from the airport and also popular travel routes through the city. The IOC looks at existing, planned and any additional infrastructure that will be needed for the Olympic Games. The IOC then conducts studies to show where current transportation challenges arise and how the candidate city intends to overcome these challenges. This study done by the IOC is extremely advanced and is conducted by the best people in the business. This study will not only improve travel time around the city but also safety. The time saved when commuting to and from the city is extremely valuable to people who have to commute to work or to the city on a regular basis. Tokyo set a precedent for future games; Rio 2016 plans to upgrade its airports, ports, marinas, roads, BRT (bus rapid transport) and its metro lines throughout the city. These upgrades will include renovations and expansions which will ensure quality transportation around the city for many years. Rio is also planning to add new bicycle routes, flyovers and gondolas to provide transportation to individuals that are going to be commuting by foot or bicycle. When deciding on the host city, the IOC has an evaluation test that covers everything from accommodations of athletes and tourists to the potential legacy of the Olympic Games. The criteria the IOC uses to assess the quality and feasibility of the host city is based on accommodations, environmental conditions and impact, experience from past sports events, finance, general infrastructure, government support, legal issues and public opinion, Olympic village, project legacy, safety and security, sports venues and transport concept. This evaluation is then compared to all the other potential host cities. This is relevant because if a city is chosen to be the host city of the Olympics it is a city with a bright future. If the city is chosen to host the

Olympics it means that it is up to the standards of the IOC. The IOC would not pick a host city that does not have appropriate infrastructure, safety, finance and government support. When investing, this eliminates sunk costs associated with assessing the value of a city. The IOC conducts the basic research for you. Its research lets you understand the overall state of the host city; things like if it can support local business and residential needs in the future.

It is pretty clear that the Olympic host city is going to have improved infrastructure, the most recent security upgrades, proper financing, and proper accommodations to encourage growth. Now we need evidence that the real estate in that area is going to appreciate in value at an increased rate. This is not always easy to prove since the theory behind this prediction has to do with potential home owners perceived value of the property they are considering to buy. The real estate prices that are going to appreciate at a faster rate are the properties located in the most sought after locations. The Real Estate Industry Slogan is "location, location, location". This is because land is in limited supply; no more land can be produced. Potential catalysts are what raise and lower the prices of real estate. Individuals may be looking for a house in a certain

school district, close to public transportation, near a specific hospital of their choice, or away from noisy venues or airports. Buyers are looking for houses with a good "walk to" score; this are houses within walking distances to shops, parks, cafes and transportationviii. Buyers with children often prefer a location close to schoolsix. This may be the same for athletes or sports enthusiasts that prefer a location close to their workout facility, specialized medical center, or favorite park. Supply and demand is also a basic concept affecting real estate prices. If there is little inventory or houses on the market the buyers that are looking for a house in that location have no choice but to pay more money due to the upward pressure on prices. Examples -Prices in prime central London hit a record high even as the rest of Britain's property values tumbled. - Currently 13.5% higher than the previous market peak reached in 2008 x -"Prime Central London"-median home price $5.5 million - Belgravia, Chelsea, Hyde Park, Kensington, Knightsbridge, Marylebone, Mayfair, Notting Hill, Regent's Park, St. John's Wood, Riverside and City Fringe. - Prices have climbed 49% since low in 2009 xi - Sydney Olympics 2000 - Homebush rose 70%, area surrounding Sydney only rose 50% - Rents increased 40% from 1993-2000, neighboring Melbourne only rose 10% xii

-Barcelona Olympics 1992 - Housing prices rose 131%, renting prices rose 145%. Surrounding areas only rose 83% during same period. - shot from 11th to 4th in European rankings of best cities to do business in - number of hotels doubled from 1990-2004 xiii The evidence points to a larger increase in housing prices than in the surrounding areas. This increase may be in large part to intangible benefits. The promotion of the host city and the national pride that people in the host city gain may attribute to these increased prices. These are the benefits that are hard to value and estimate. Once the Olympics are held in a large city the residents in that area do not want to leave. That is their home; they have too many strong connections with the local residents. This worldwide event united the city and brought neighborhoods together. These people do not want to lose that feeling; they are not willing to sell their house for some low ball offer. They have too much pride and memories in their house to be selling it for anything less than what they perceive the value to be. This is the so called "feel good factor". Everything mentioned above may just be non-sense, but some experts believe this "feel good factor" is very real. The feel good factor associated with hosting such a large event, are because local residents actually become fixated on the new sports facilities that was built for the gamesxiv.

It certainly has transformed the image of the area not only in terms of the images that were portrayed of the stadium in use as far as the region and the national audience is concerned but I think it has also started to transform the local populations view of their own area as being a

dynamic and happening place and in that regard it has been an outstanding success (Strategic Director for Regeneration, Manchester Local Authority).

After hosting the Olympics, the residents often have an increased "quality of life" through things like medical facilities, public safety, recreational facilities, parks and cultural activities. A house is a differentiated good; the price of the house is determined by a combination of its curb appeal and intangible characteristics such as public amenities near where it is located. A series of papers by Johnson and Whitehead (2000), Johnson, Groothuis, and Whitehead (2001), and Johnson, Mondello, and Whitehead (2005) measured the intangible benefits associated with sports facilities using a Contingent Valuation Method (CVM). The papers outline the presence of sports facilities as intangible characteristics that positively affect property values. Carlino and Coulson (2004) used data from 53 of the 60 largest metropolitan areas from 1993 - 1999 and found that the social benefits associated with these facilities lead to a higher quality of life. Their results indicate that these sports facilities raise housing rents by around 8 percent in central cities.

"Improved Quality of Life" can also be affected by an increase in Olympic Medals for the host city. There is pretty sufficient evidence that host cities have a large increase in medal count when hosting the Olympics. You could say this is due to the fact they have "home field advantage". This increase in medals is just another reason why the host city residents have an increase in happiness and pride for their city. Victor Matheson an associate professor of economics at the College of the Holy Cross points out that studies done in 2006 regarding the World Cup in Germany showed little

improvements in income or employment figures but the residents showed a noticeable improvement in self-reported levels of happiness after the event. The World Cup might not have made them rich, but it did make them happy. The indirect economic benefits are potentially more beneficial than the direct benefits. When discussing these indirect economic benefits they are intangible and are hard to quantify. The most important intangible benefit is most likely the amount of advertising and coverage the host city receives during the games and also leading up to the games. The media coverage during the games is intense and portrays the city on the world stage. The Olympic Games possibly attracts tourists who would have otherwise not considered the city or region. This is a longlasting economic benefit and gives the city a name that will reside with people for years to come. The Olympics allows the host city to project a positive image to the rest of the world. The Olympic Games allows the country to showcase itself politically, economically, or other strengths it wishes to "show off" on the world map. This is often used to help advance and build its reputation as a center for world class citizens. Not only for sporting events but also conventions and tourism as well. The Olympic Games represent an easy opportunity to conduct domestic politics worldwide, to showcase its self and encourage investment and tourism to the country without being accused of trying to politic or bribe other countries. Sydney, Berlin and Barcelona are three examples of cities that are known around the world due to hosting the Olympics. This increase in reputation has long-term benefits that can bring revenue to the host city through tourism and large scale investors who are interested in investing in the city through stock investments in companies located in that area, municipality bonds, holding conventions or opening a corporate office in the city.

In 1990 Barcelona had 3,795,522 nightly stays a year; by 2000 it had 7,777,580 nightly stays. That is more than double in just 10 years. All that added traffic leads to an increase in real estate prices throughout the city. More hotels and restaurants begin to open and are able to remain profitable after the Olympic Games. These hotels and restaurants need employees; these new employees are going to move into the city where they work. The basics of economics are supply and demand. The more demand for real estate the higher the price will rise. With the increase in people moving to the city and the increase of businesses in the city; this has another effect on real estate prices that I mentioned before. With these new homes and businesses being built in and around the city the availability of land becomes scarcer. As land becomes scarcer the current real estate properties become more valuable. Even if the buildings become more run down, the land that they are built on will still increase in value. This desire for land provides the

catalyst. As land becomes scarcer and more desired the value of the property will rise at a faster pace than surrounding areas. There will be opinions on each side if the benefits of hosting the Olympics outweigh the cost of making the changes necessary for a smooth and memorable worldwide celebration of the best athletes from around the globe. Hopefully this research was able to present some issues to consider when evaluating that question. It does appear clear that the requirements spelled out by the IOC are meant to guarantee, as much as possible, that the city they choose to host the activities will be one that can assure safety, short term effectiveness in handling the games and events, provide the required basic needs of food, shelter, and medical care, as well as a whole list of other demands and essentials. The IOC does appear to share the concerns regarding the need to help the city use this opportunity, as host to the Olympics, to also improve their metropolitan community for the long term. The goal is to make sure the lasting effects of their efforts are positive, hopefully in terms of revenue, but also in terms that improve the lives of its inhabitants and all the intangible elements that are important to humans, no matter where in the world they reside.

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