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Regeneration, the 2012 Olympics and the gentrification of East London

It's Not For Us

Paul Watt

This paper examines the much-hyped 2012 Olympic Games ‘legacy’ in relation to the displacement experiences of lower-income East Londoners. The paper begins by outlining the overall context of housing-related regeneration including the reduced role for social housing, especially council (public) housing in London. It then sets out a framework for understanding how regeneration, state-led gentrification and displacement are intertwined, as well as how such processes have been contested. The paper examines these issues in greater depth with reference to case studies of the inhabitants of two working class spaces in the London Borough of Newham, an Olympics host borough. The first study is based on the Carpenters Estate, a council housing estate in Stratford that is facing potential demolition, and the second focuses on young people living in a temporary supported housing unit. These studies illustrate how the 2012 Olympics, alongside other regeneration schemes, is changing the nature of space and place from the perspective of existing East London residents and how gentrification is implicated in such transformations. Neither the Carpenters Estate residents nor the young people think that the Olympics and other regeneration schemes in Newham are primarily occurring, if at all, for their benefit indeed, displacement processes may well mean that they are no longer able to live in their current neighbourhood. The Olympics legacy is for others, not for them.


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The Convergence framework

This text first appeared in an assessed essay submitted in February 2013. To the author’s chagrin, the essay (strangled by a 2,000 word limit) barely scraped a pass, but here’s the useful information about the Convergence framework itself. Links/attachments below.

The Convergence document (Strategic Regeneration Framework: An Olympic Legacy for the Host Boroughs) brings together physical and socio-economic regeneration goals for areas containing Olympic venues in east London: Newham, Hackney, Tower Hamlets, Greenwich and Waltham Forest. Barking and Dagenham became a sixth host borough in 2010. Between them they hold “18% of London’s population but 62% of its areas with the highest levels of deprivation” (London Boroughs, 2012, p. 4). The document aims to equalise life chances with the rest of London over a 20-year period. It comprises a series of measurable outputs on regional planning, educational attainment and skills development, reducing worklessness and “benefit dependency” (targeting social housing tenants specifically), tackling overcrowding, fuel poverty, and raising the standard of private accommodation, raising health outcomes and sporting participation rates, and reducing violent crime and anti-social behaviour. The creation of mixed communities through diverse tenure is critical to this vision.

The document is paradigmatic of ‘reflexive government’ (Dean, 1999), where “the liberal and social problematics of security [shift] from … social and economic processes to … governmental mechanisms” (ibid, p. 177). “Convergence targets work towards the virtuous, disciplined and responsible autonomy of citizenry … along with the optimisation of professional performance” (Games Monitor, 2012, p. 21). To a certain extent, the social is reoriented not as something to ‘know’ (that is, as evidence-based) but as a series of markets.

In common with other planning documents, change is presented as transformative [“a tautology”—assessor’s comment], a discourse strategy remarked as central to managerialism by Clarke and Newman (1997). “The focus is on … paradigm shifts involving the … dismantling of … the old social order of the welfare state settlement and the ways of thinking that sustained [it]” (ibid, p. 42). The bureaucracy is identified as leader of change (to [our] knowledge, there has been no public consultation around this document). Its prescriptive discourse makes change appear constructive, achievable and accountable. As a managerialist statement, it “has set the agenda of change, defined its meaning, its direction and the means of its accomplishment. It is the core [document] that other contending positions must negotiate ... In particular, it has established the need to remake organisational forms of the state around the managerial prerogative: the right to manage” (ibid, p. 55). Thus the Convergence document represents a key rationalisation of the Olympic project.

Outcomes

The term ‘social exclusion’ suggests that it is “social relations other than income” (Gough et al, 2006, p. 4) that may exclude, and that “the poor and disadvantaged are excluded from important types of social interaction and social activity” (Sen 1983, cited ibid). Yet use of the term can obscure concerns with inequality (of income and resources) and avoids conception[s] of social justice (ibid). Following Townsend (1979, cited ibid) ‘deprivation’ can be understood as a relative term, and judged against wider consumption norms. Gough et al argue that through the use of these terms, conservative interventionism attempts to relegitimate neoliberal capitalism after the polarisations of the Thatcher years. The tendency (“always a tentative and changeable class settlement”, ibid, p. 189) is described as ‘conservative’, despite an association with New Labour, because of its attachment to organic conservative concerns such as social responsibility, community, inclusion, and local services. It works most effectively at the local scale, addressing spatial concentrations of poverty rather than structural deprivation. The focus is on “patterns of life” (ibid, p. 191) rather than income, to integrate the poor into the lower echelons of the labour market. Policies such as social mix are viewed as reducing class tensions (ibid, p. 196).

When lower-income tenants do gain greater opportunities and access to resources this is little to do with tenure mix; rather “the integration of area-based and people-based policy, as well as decommodified access” to local services “is crucial” (Arbaci and Rae, p. 3). So examining evaluations of the Convergence outcomes (2009–2011 and 2011–2012) we should expect certain improvements from concentrated social investment but not attribute these to social mix policies. In fact, what comes through clearly is the volatility of the national policy context, and the extent to which legislative reforms can sabotage target setting.

Neighbourhoods

The 2011–2012 report notes the Place Survey as abandoned, therefore it was not possible to track street cleanliness, overcrowding (p. 27) or anti-social behaviour (p. 10). In housing, recent legislative changes (including caps on Universal Credit and Local Housing Allowance) are regarded as “likely to impact negatively” (p. 26) on residents due to a higher proportion already on benefits and levels of overcrowding, especially in Hackney and Tower Hamlets (p. 27). The Guardian website (2013) reports that Housing Benefit caps across London are pushing claimants into host boroughs; in Newham, Housing Benefit claimant numbers are up by 41%. There are “significant concerns about the new ‘affordable’ rent regime”, especially for families in larger properties (p. 27). This puts a damper on the delivery of 10,500 affordable units out of 16,500 completions (over 63.6%). The Athletes’ Village is counted within the performance targets, accounting for 79% of new starts in Newham (2009–2011, p. 7). Inside Housing reported (Duxbury, 2010) that Triathlon Homes, developers of the Athletes’ Village, would consider taking future tenants off housing waiting lists only if they were in work. Violent crime increased slightly between 2009–2011 (p. 10), but the gap between the host boroughs and the London average decreased by almost 2% in 2011–2012 (p. 27).

Worklessness

Median earnings 2009–2011 for full-time workers became worse and the gap between the host boroughs and the London average increased from £30.70 to £39.40 per week (2011–2012, p. 14). The interim evaluation of 2011–2012 relied on the temporary posts created by the Olympic event to boost performance. “The boroughs where the employment rate has reduced from the 2009 position are Newham, Tower Hamlets and Hackney. In terms of the unemployment rate the situation since 2009 has worsened in every borough” (ibid). Local schemes put 3,800 people through training (ibid) in 2009–2010.

Health and education

The numbers of people undertaking no sporting activity at all during 2011–2012 rose in Barking and Dagenham, Greenwich and Newham (p. 21). Data for children doing PE at school is no longer collected at the national level (p .25). Better news on educational attainment: targets for pupils achieving at least level 4 in English and Maths at Key Stage 2 were “on track for convergence in 2014/15”, and pupil’s achievement of five GCSE grades A*–C (including English and Maths) has nearly reached its target (p. 16). The significant gap between the host boroughs and London average on child poverty has narrowed slightly (p. 19), and the gap for adults with no qualifications is down 0.9 (p. 18).

References

Arbaci, S. & Rae, I. (2012), ‘Mixed-tenure Neighbourhoods in London: Policy Myth or Effective Device to Alleviate Deprivation?’ International Journal of Urban and Regional Research, doi: 10.1111/j. 1468–2427.2012.01145.x, pp. 1–29 (forthcoming)

Clarke, J. & Newman J. (1997), The Managerial State: Power, Politics and Ideology in the Remaking of Social Welfare, London: Sage

Dean, M. (1999), Governmentality: Power and Rule in Modern Society, London: Sage

Duxbury, N. (2010), ‘Olympic village looks to favour those in work’, Inside Housing, 23 July 2010

Games Monitor (2012), Background Paper on the London 2012 Olympics: Governance. http://www.gamesmonitor.org.uk/files/BriefingPaper3-Governance.pdf [Accessed 21 February 2013]

Gough J., Eisenschitz, A. & McCulloch A. (2006), Spaces of Social Exclusion, Abingdon: Routledge

Hill, D. (2013), ‘London housing crisis: soaring benefit claimant numbers indicate displacement from centre’, Guardian, 21 February 2013. http://www.guardian.co.uk/society/davehillblog/2013/feb/21/housing-benefit-claimants-increase-in-london?CMP=twt_gu [Accessed 21 February 2013]

Host Boroughs Unit (2009), Convergence, Strategic Regeneration Framework: An Olympic Legacy for the Host Boroughs. http://www.hackney.gov.uk/Assets/Documents/strategic-regeneration-framework-report.pdf [Accessed 21 February 2013]

London Boroughs of Barking & Dagenham, Greenwich, Hackney, Newham, Tower Hamlets, Waltham Forest, & Mayor of London (2011), Strategic Regeneration Framework: Progress Report 2009–2011. http://www.hackney.gov.uk/Assets/Documents/SRF_Convergence_ annual_report_fin.pdf [Accessed 21 February 2013]

London Boroughs of Barking & Dagenham, Greenwich, Hackney, Newham, Tower Hamlets, Waltham Forest, & Mayor of London (2012), Convergence Framework: Annual Report 2011–2012. http://www.london.gov.uk/sites/default/files/Convergence Annual Report 2011-12 FINAL.pdf [Accessed 21 February 2013]

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Links to the 'Convergence' document of 2009. See attachments for the two existing evaluations: 2009-2011, 2011-2012.

www.hackney.gov.uk/Assets/Documents/strategic-regeneration-framework-report.pdf
Strategic Regeneration Framework report (PDF)


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Regeneration and Well-Being in East London: Stories from Carpenters Estate

The report makes unsettling reading. It highlights how residents’ well-being across a number of key dimensions (housing, livelihoods and participation) has been undermined by the protracted and ongoing regeneration process itself. It also underlines how residents often feel that their voices have not been adequately heard – or rather not listened to – by the major redevelopment players – Newham Council and UCL. The report’s findings thus reflect those from many in-depth academic studies of major regeneration schemes in deprived urban areas in which the supposed beneficiaries of such schemes – existing local residents – all too often feel neither empowered by their participation in the regeneration process nor feel that they will necessarily benefit from the outcomes (see inter alia Perron and Skiers 2003; Dinham 2007; Allen 2008; Gosling 2008; Imrie et al. 2009; Wallace 2010). None of this is inevitable however. There are examples where local deprived communities can exert a genuine influence on regeneration processes (McGinn 2004; Porter and Shaw 2009; Dillon and Fanning 2011), even in London, a city whose ever-onwards and upwards ‘property machine’ has a built-in tendency to drive out other, more potentially productive and sustainable land-uses (Hutton 2008).


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Can the London 2012 Olympics ‘inspire a generation’? - An overview of systematic reviews

Can the London 2012 Olympics ‘inspire a generation’ to do more physical or sporting activities?

An overview of systematic reviews

Article focus

Increased levels of physical activity are linked with improved health and may play a key role in the prevention or treatment of most noncommunicable diseases.

The London 2012 Olympic and Paralympic games aims to leave a long-term legacy, which includes population level increases in physical and sporting activity.

We conducted a systematic review of systematic reviews to establish whether hosting an Olympic games leads to increased participation in such activities.

Key messages

There is little evidence that international elite sporting events such as the Olympics leads to increased participation in physical or sporting activities at the population health level. We found no evidence, in particular, relating to the Paralympic games.

High-quality, evidence-based studies are needed to measure the true impact of the London 2012 games.

Strengths and limitations of this study

This is a systematic review of existing systematic reviews.

We restricted our search to those reviews published in English on previous Olympic and Paralympic games.

See article here


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Statewatch: A “clean city”: the Olympic Games and civil liberties by Chris Jones

A report by Statewatch

In 2005, the UK won the right to host the 2012 Olympic Games. Seven years later, the Games are due to begin, but they are not without controversy. Sponsors of the Games – including McDonald’s, Coca-Cola, Cadbury’s, BP and, perhaps most controversially, Dow Chemical [1] – were promised “what is chillingly called a ‘clean city’, handing them ownership of everything within camera distance of the games.” [2] In combination with measures put in place to deal with what have been described as the “four key risks” of terrorism, protest, organised crime and natural disasters, [3] these measures have led to a number of detrimental impacts upon civil liberties, dealt with here under the headings of freedom of expression; freedom of movement; freedom of assembly; and the right to protest. The Games will be hosted in locations across the country, but primarily in London, which is main the focus of this analysis.


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Meta-evaluation of the Impact and Legacy of the London 2012 Olympic Games and Paralympic Games

This report brings together the findings from phase one of the Developing Meta-Evaluation Methods study, which is being undertaken in conjunction with the Meta-Evaluation of the Impacts and Legacy of the London 2012 Olympic Games and Paralympic Games. The Meta-Evaluation has been commissioned by the Department of Culture, Media and Sport (DCMS). The work on methods is funded by the Economic and Social Research Council (ESRC) . The aim of this element of the study is to review and advance understanding of methods of meta-evaluation.

1.1 Background

In May 2010, Grant Thornton, ECOTEC Research and Consulting (now Ecorys) and associates were commissioned by the UK Department for Culture, Media and Sport (DCMS) to conduct a comprehensive three-year Meta-Evaluation of the Impacts and Legacy of the 2012 Olympic Games and Paralympic Games. The study is of the utmost importance in demonstrating the legacy impact of the 2012 Games across all thematic areas and will be the single largest and most comprehensive evaluation exercise commissioned in connection with the event. The study will involve:
“… the synthesis of results, findings and the outputs across a set of existing and planned evaluations with heterogeneous features, into a single overall evaluation. It will also involve reviewing the methodology of the project level evaluations to assess whether they meet the standard principles set out in the '2012 Games Impacts and Legacy Evaluation Framework' ('Legacy Evaluation Framework')

It was thought that the Meta-Evaluation therefore holds significant potential to advance methods more widely, particularly in terms of demonstrating how meta-evaluation can be employed practically in order to:
• Develop a framework for identifying, mining and aggregating data within a disparate body of existing evaluations;
• Inform better policy making and improve value for money; and
• Create a platform for more robust evaluation and research practice (in the field of mega events) in the future.

In response to this opportunity, the ESRC and the ECORYS Research Programme provided additional funding for a parallel research project to both help advance methods of meta-evaluation whilst improving the outcomes of the Meta-Evaluation itself.


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House of Lords Note for Debate on 8 November: Olympic and Paralympic Games Legacy

This Note provides background reading for the debate to be held on Thursday 8 November on:

'the long-term legacy for the UK from the Olympic and Paralympic Games'

The London 2012 Olympic Games took place from 27 July to 12 August 2012, and the Paralympic Games took place from 29 August to 9 September 2012. This Note explores the impact of the Games on the UK economy, regeneration, sport and the broader cultural effects of hosting the Games.


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Public Accounts Committee report Feb 2012

Preparations for the London 2012 Olympic Games Feb 2012 report


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London 2012 Olympics Host City Contract

The Host City Contract for the London 2012 Olympics.

This is the non-negotiable contract document prepared by the IOC to be signed by the successful candidate city at Singapore on July 6th 2005.

This has never been made widely available in the UK and was originally obtained under the Freedom of Information Act from the Government's Department of Culture, Media and Sport.

The accompanying Technical Manuals are here


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Save Leyton Marshes flyer - 5 Mar 2012

PDF flyer for distribution/display
text reads:

"Save Leyton Marsh

Local residents and Marsh users have come together to campaign against the decision to allow the Olympic Delivery Authority to build on the Marshes. Waltham Forest Council has granted planning consent to the
Olympic Development Authority to build a temporary basketball training arena on Leyton Marshes. Work on the site has already begun preventing all public access to this area of common land between now and the end of the year.

We are deeply concerned that this decision to build on Metropolitan Open Land will set a precedent making it much easier for developers to seek and gain consent to build on this important green space in the future.

The Marshes are a vital local community resource, London's Green Lung, that’s why it’s so important that we work together to protect the Marshes for everyone to use and enjoy.

The Olympics should be about improving the facilities we already have not denying people access to parks and open spaces. There are plenty of basketball courts in the East End which could be used to provide training facilities for Olympic athletes, the ODA should use those first before paving over our green space.

The Games have been sold on the back of the legacy it promises to leave and yet we have already lost the entire East Marsh to a coach park and now we stand to lose Leyton Marsh as well. How much more open, green space must we give up for the Games?"

See saveleytonmarsh.wordpress.com


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Press Release 11/03/2012: Large Local Rally Against the Olympic Development

Press Release: Large Local Rally Against the Olympic Development
11 March 2012

Around 200 local people attended a rally organised by the Save Leyton Marsh group on a sunny Saturday afternoon on Leyton Marshes. This is the second protest organised by the group and it was more than double the size of the previous protest just a week before.

Groundwork has begun on the marsh for the construction of 12m high basketball training facilities for the Olympic Games.

Locals gathered for the rally to hear speeches about the mounting opposition to the destruction of the marsh resulting from the huge construction. Around 75% of the marsh is now fenced off, preventing public access to the majority of the land and huge trenches have been dug for the foundations of the building.

People attending the rally were appalled by the impact the building works had already had on the marsh, describing it as ‘ruinous’,‘ a disaster’ and a ‘scarring of the land’. They expressed frustration that Lea Valley Regional Authority instead of acting as a guardian of this protected land, offered it to the ODA who did not consult local residents (including those living directly opposite the development) and are now using public money to dig up green belt land and guard the site, including with two dog units that have been disturbing locals overnight.

Banners reading ‘Save Our Marsh’, ‘No to Olympic Destruction: Save Our Green Space’, ‘2012 Olympic Gated Village’ and ‘Members Only’ were attached to the perimeter fencing. An exhibition of photos of dogs belonging to local dog walkers ‘before’ and ‘after’ the works were also displayed to demonstrate how the changes have negatively impacted the local community and the natural environment.

Protestors chanted ‘Save Our Marsh! Keep it Green!’ in front of the fences. One woman sang a song especially written for the day, expressing both sadness at what was happening and the determination of the protestors not to let the developers ‘take the marsh away’. The protest was lively, peaceful, colourful and attracted the attention of passers-by, many of whom who had no prior knowledge of the ODA’s plans for the land.

Save Leyton Marsh Group, formed entirely of local people, have been active against the proposed development on Metropolitan Open Land ever since the plans became public in late December. They will be taking legal action to try and bring a halt to works and are planning further protests.

Their next protest will highlight the destruction of the land as an amenity for local people and wildlife in the form of an ‘Eat and Greet Picnic’ this Saturday 17th March at 2pm on what remains green open space on Leyton Marsh


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London 2012: Olympic Risk, Risk Management, and Olymponomics

London 2012: Olympic Risk, Risk Management, and Olymponomics
Will Jennings
Published in August 2008 in the John Liner Review, 22(2): 39-45.


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Olympic Sites: A celebration of Olympic values?

"In this special issue of CLRNews we have tried to document the construction involved for different Olympic Games, the social and employment issues and problems raised and the longer-lasting effects."

Published in July 2011 by the European Institute for Construction Labour Research.


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The Spectacular Construction of an Olympic Metropolis - Anne-Marie Broudehoux

The Spectacular Construction of an Olympic Metropolis
Anne-Marie Broudehoux
University of Quebec, Montreal

ABSTRACT: This article presents a critical review of Beijing’s Olympic redevelopment, and of the social, economic, and political impacts of hosting mega events as a means of urban image construction. Through an analysis of Olympic projects, city marketing initiatives, and their impact on the city’s material and cultural landscape, this article postulates that Beijing’s spatial restructuring and image construction program played an important role in exacerbating the profound inequalities that have come to epitomize China’s transition to capitalism within an autocratic political system. Acting as a developmental engine legitimating large-scale urban transformations, the Olympics have helped concentrate economic and political power in the hands of a coalition of government leaders and private investors and allowed their interests to dominate the planning agenda. Beijing’s spectacular Olympic preparations have in many ways acted as a propaganda tool and an instrument of pacification to divert popular attention from the shortcomings of China’s rapid economic transformation, accompanied by rampant land speculation, corruption, and uneven development.


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London 2012 Olympic and Paralympic Games Impacts and Legacy Evaluation Framework

Department for Culture, Media and Sport
London 2012 Olympic and Paralympic Games Impacts and Legacy Evaluation Framework Final Report, 2009


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When the Games Come to Town: Host Cities and the Local Impacts of the Olympics - M Smith

A report on the impacts of the Olympic Games and Paralympics on host cities

Dr Mary Smith
London East Research Institute Working Papers
December 2008


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OPLC 'Alternative NW Parklands and Velopark' presentation

OPLC's 'Alternative North-West Parklands and Velopark' presentation of 08/07/2011.

This is a large PDF file (13Mb)
Download the document


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The role of Mega events in urban competitiveness and its consequences on people

Carolina del Olmo Universidad Complutense Sept 2004

Some years before filming Bowling for Columbine, Michael Moore directed and starred in the film Roger and Me. In this film, Moore captures the consequences of the closure of a General Motors plant in his home town, Flint, Michigan. The plant closed down and moved in search of lower labour costs, leaving behind a landscape of unemployment and despair. However, Moore portrays this event in a comedic light. In fact, the most hilarious part of the film is seen when the city council of Flint decides to implement some measures to solve the population’s problems, with hopes that these measures convert Flint into a tourist destination. The urban government built an automotive theme park, a colossal hotel and a gigantic shopping mall, but obviously the plan failed in a few months and the new installations closed down. Strangely, by the implementation of these measures, the city council aimed to boost the spirit of the people, to give them back their self-confidence. Unfortunately, these plans are not as unique as they may seem. If we read about the 1992 Barcelona Olympics, we discover that one of its majorly recognized achievements was the increase of its citizen´s pride in themselves and their city and the improvement of the image that the inhabitants had on their home town. In fact, this idea is a basic ingredient of the dominant ideology around mega-events.

Anyway, if we were to study the strategy that consists in organizing large scale events of any kind in order to revitalize a city that before was destroyed by a mix of deindustrialization, unemployment and social service cuts, Spain would be a great example. In Barcelona, the Forum de las Culturas is about to conclude as I write this essay. Valencia is working to host the 32nd edition of the America’s Cup yacht race. And Madrid is striving to be the host city for the 2012 Olympic Games (along with Paris). Even if they last only a few weeks, these events require years of preparation, take up a huge amount of public funds and permanently change the physical landscape of the city.

But Spain is not alone in supporting this ideology. If we take a look at the figures, we will notice that the competition for hosting an Olympic event becomes more difficult every year since the economic success of the 1984 Los Angeles games (a success largely due to the growth of worldwide communications). The same rivalry prevails in the fight for hosting a World Fair or any other large scale event.

How can we explain this mega-event obsession? First of all, we must realize that this kind of competition is nothing more than the most conspicuous form of global competitiveness.  This competition between cities and regions is a consequence of the political and economical changes that have occurred in approximately the last thirty years. To summarize these changes, we can make use of a common term and discuss a transition from a Fordist regime of accumulation [http://en.wikipedia.org/wiki/Fordist] to a post-Fordist regime of increased flexibility. The growing geographical dispersion of production and a financial capital boom have played an essential role in allowing this transition to take place, a transition that, in turn, has had important consequences on capitalistic cities. Towns are experiencing a prolonged crisis related to the loss of traditional industries, the growing importance of tertiary sectors, and the increase of unemployment and poverty. They have begun to compete against each other in a fierce fight for attracting investments from the private sector or from different levels of government. They also strive to obtain money by promoting a culture of consumption, in search of some kind of compensation for the loss of steady jobs. The urban governments have taken the initiative in what has been called the “rise of an entrepreneurial city”, encouraging a good business climate and taking measures to attract economic growth. Measures that, in turn, intensify flexibility and insecurity.

As was to be expected, the investments aimed to convert a city into a dynamic and competitive enterprise presume the use of scarce public resources in favour of firms and high level consumers at the expense of disadvantaged classes, specially in a fiscal austerity frame like the one we have had in the last years. As well as the deregulation of the labour market and the gifts (fiscal exemptions and all kind of incentives) that urban governments offer to firms to lure them to their cities, other efforts aimed to construct a competitive position for the city have primarily been concentrated in the field of urban environment transformation. The city, with the help of post-modern architecture, on the one hand becomes a spectacle in order to make it an attractive space for tourism and consumer spending. On the other hand, the city devotes itself to the construction of infrastructures of whatever kind that are highly valuable for corporations and quality customers, as convention centres, business areas, highways, airports and so on. In this frame of competitiveness and in this process of converting a city into a spectacle is where we must set the recent obsession with mega-events. This obsession is perfectly illustrated with Barcelona since they have hosted the 1992 Olympic Games. Since then, it has hosted the Forum this summer and, in between, has organised a myriad of minor tourism-based events.

Now, let’s focus on the so-called advantages of these kind of events. Besides being able to heal the citizen’s psychological discomfort, as we previously noted, politicians constantly brag about two other virtues of mega-events: 1- they are believed to be the perfect occasion for the city to fulfil its longstanding general need for infrastructure and installations. 2- they can stimulate the economy and generate employment. This last claim reads as follows: the mega-event turns the city into a global focus of attention, providing a top-quality kind of marketing and advertising that contributes to sell the city’s image all over the world; as a result, the city will capture a huge amount of tourists and will also attract a lot of corporate headquarters and new events, with the resulting growth of economic activity in the long run and the creation of new jobs.

At first sight, these kind of aspirations and expectations may seem reasonable if we think about the economic significance of tourism in the last years for advanced capitalist societies. But even before evaluating if it is reasonable to expect the fulfilment of these expectations, a big problem arises, a problem that has to do with the urban pattern that this kind of economic development promotes. Public and private interventions in the touristic city usually focus on the surface and only renovates the central zones in a city, leaving the rest of the neighbourhoods in a sorry state of neglect. These kind of manoeuvres tend to generate gentrification and speculation, resulting in the rise of real estate prices and the eviction of the neighbours with lower purchasing power. The city becomes uncomfortable for the inhabitant, whose needs are subordinated to the pleasure of the visitor, and also becomes depersonalized with the arrival of big trade chains and the closure of small, traditional trade stores (a process of substitution that usually results in a net loss of jobs).

But there are also more serious disadvantages. The kind of jobs created by the tourist industry tend to be low wage, precarious, unqualified, non unionised and without benefits. Moreover, it seems reasonable to suppose that the growing number of tourist destinations will solidify the competition between cities, resulting in the need to reduce expenses and, of course, labour wages. This growing competitiveness is, in fact, one of the factors that makes the tourism-based economic pattern so risky, as well as the fact that the flow of visitors is very sensitive to trends and taste changes, or to questions of security or currency fluctuations.

Nonetheless, if the huge investment of public funds and the inconveniences caused to the people who inhabit the touristic city result in any kind of profits for the population, then we could find a justification for this pattern of development. But no social welfare exists in this pattern. Let’s think about the installations that a city “gains” when it hosts a mega-event. We are tired of hearing about the “Olympic legacy” and the official discourse is repeated again and again that when the mega-event concludes, the installations will remain in the city. But they never discuss what the use value of these infrastructures is, especially if we compare these “sinks” of public investments with other installations and services that could have been financed with the same amount of funds (or a lot less). Public funds are a scarce resource, especially today, in this zero-deficit scenario. In this restricted frame, to finance these kind of events and infrastructures involve a budget cut in other, more necessary, sectors. Besides, there are cases, as in the Valencia Americas Cup, where it is simply impossible to imagine the usefulness of the installations that the event will leave behind: public funds are going to finance, among other things, an extension of the harbour that includes a big ship proprietor’s yacht club with its own heliport and a dock for ships more than 40 meters long. Moreover, these kinds of infrastructure tend to require a lot of re-investments to avoid the threat of devaluation that comes with the interurban competition and the changes in trends. That’s why it is so common to see these installations languishing in a state of neglect years after the event.

The Barcelona case represents these aspects extremely well. The 1992 Olympic Games are recorded as a success, even if they didn’t fulfil the expectations they claimed. The Olympic investments (in the broad sense, including some roads, coastal area renewal, cultural outlets, etc.), reached near 6 million euros and 53% of that budget were public funds. But the economic activity that this money generated didn’t have a positive impact on the economic indicators of the Barcelona area. Between 1987 and 1991 the number of jobs created in the construction sector were only 33.000, a figure much lower than was expected considering that three quarters of the total investment went towards the construction sector. On top of this, all of them were temporary jobs. In the hotel and catering trade sector only 20.000 new jobs appeared and only lasted the duration of the event, again, much less than was expected. In the other sectors, the labour impact was zero (we tend to forget that the Olympic volunteers take on a great amount of tasks that would otherwise generate jobs). During 1992, the number of jobs began to fall. If we take a look at trade, we will see that during 1992 the sales rate decreased and the number of tourists that visited the city (a million and a half) was lower than expected and spent less money than it was estimated (exactly the same has happened in Athens this last summer). Also, the Barcelona event resulted in a dramatic decrease in the number of people that visited other destinations in the Barcelona region. Basically, the only economic indicator that experienced an important impact as a result of the Olympic Games were price levels. Since 1988, city price levels increased more than in the rest of the region and more than 1% over the inflation rate in Spain. In the year before the Games, prices rose more than 3% over the prices of the rest of Spain. And if we think that the city gains profit from television broadcasting rights, we should not forget that it is the Olympic Committee who collects this money. In fact, the progressive growth of this source of money has turned the International Olympic Committee into a big (and suspicious) enterprise.

How can we understand the minute economic impact and the lack of fulfilment of expectations? We could focus on the unbridled optimism that seems to encumber the people who do the impact studies, but, especially, we should focus on the limited frame in which the investments take place. If the demand related with the Olympic Games (or any other mega-event) takes up resources that would otherwise remain unused, it would be reasonable to expect an increase in employment, as well as an improvement of the economic indicators in general. Nonetheless, demand growth related with a mega-event doesn’t produce a net income, because it is a consequence of a mere change in the direction of the resource’s flow; that is, the resources go to a specific sector or a particular place but only because they are coming from another sector or place. The same goes for private capital: it tends to reduce its investments in other sectors or in other spatial areas. If we pay attention to the recommendations that the economic impact studies use to achieve a real net increase in profits, for example, to make the labour market more flexible, it is clear that the aim of obtaining net profits loses part of its appeal.

Astonishingly, even if the mega-events don’t fulfil their expectations, this is never seen as a failure. Nobody seems to care for or to be surprised by this failure and the event ends with a sense of success. If we want to understand this incoherence, we should put aside the idea of competition as a heuristic tool and focus on the fabulous opportunity for businesses that follow urban transformations related with mega-events. Indeed, even the need to attract tourism and the desire to improve the competitive position of the city in the urban hierarchy seems a petty and secondary question if we compare this with the local elite’s focus on an easy profit. Of course, I am not saying that urban governments don’t want to promote the image of their cities with the purpose of generating employment, attracting enterprise headquarters and so on. Regrettably, one of our most serious problems is that urban governments seem to be convinced that, in a globalized world, there’s no point in promoting local enterprise development. They believe that the best they can do is to turn the city into an appealing zone for foreign investments. But the weakness of some of their strategies and the blindness with which they insist that these strategies actually work, make us question their genuine interests in the city.

In short, we cannot forget that when a mega-event is organized, the money that really flows into a city is, in the first place, public money that falls into the hands of private businessmen. That’s why it is so difficult to understand where the city expects to obtain incomes by organizing a mega-event, and how little the urban government cares. When asked about the profits the city of Madrid may gain from hosting the Olympic Games, a representative for the Olympic candidature discussed broadcasting copyrights (that, as I have previously stated, benefit Olympic Committee and not the city) and the tourist appeal that the city will gain. He referred to the Barcelona case as a big success and talked about the millions of tourists that have visited Barcelona in the last years as a result of the Olympic Games. What he forgot to mention is that the flow of tourists into Barcelona has not been an easy or inexpensive achievement. The strategy has only worked with the help of a continuous and huge public investment in private business, for example, in the hotel sector, dangerously close to bankruptcy –all in all, another typical episode of socialization of losses and privatisation of profits.

However, if we consider that the investors that promoted and financed a big part of the Olympic Games budget in Barcelona were real estate and construction companies, property developers, land speculators, finance companies and hotel and catering trade firms, we will understand that, indeed, the 1992 Barcelona Olympics can be considered a success. Of course, as a result of the Olympic candidature, Barcelona witnessed a frantic building activity, an increase in the housing and land prices and a huge urban transformation that entailed the conversion of a big amount of industrial land into service or housing plots.

In fact, urban renewal related to a mega-event is not as much a secondary effect as it is a fundamental raison d’être. The recent Forum Universal de las Culturas that has taken place in Barcelona this summer confirms this idea: instead of organizing a mega-event that could reuse the installations built ten years ago as a result of the Olympic Games, the Barcelona government and elite have decided to invent a new kind of event whose major aim, no one can doubt, is urban transformation. This multicultural event has proven to be an effective excuse to finally implement urban renewal in the last coastal area of Barcelona that still has a low income population. A made-to-measure operation for the private capital that has been a real fiasco for the city.

The Spanish case is especially serious since in Spain the construction sector represents almost 18% of the GDP, and 60% of the investments in fixed capital formation. It also employs two million people. After a huge process to merge enterprises, the building sector is now dominated by six big firms, five of which are numbered among the ten largest construction companies in Europe. The sector has become a safe allocation for investments due to the housing price boom and to the approval of huge public infrastructure plans. Even if the present economic climate differs from that of Barcelona 92, the results that we may expect from Madrid 2012 may be very similar. In Barcelona, between 1986-1992, the construction boom and the rise in prices were partially caused by the recent entry of Spain into the European Union, consequently causing an influx of foreign capital into the country, especially into the real estate sector. Nowadays, the potential rise in prices and the worsening of the speculative bubble will come from the fact that we are passing through a difficult period for stock exchange investments. And these bad times for the investors have turned the real estate sector into a safe haven that takes up more than 40% of foreign investment in Spain. In fact, in the last years, banks, investment funds and thousands of corporations had entry into the sector in search of a higher profitability.

So, we had a scenario of uncontrolled growth of the construction and real estate sectors, that has made Madrid one of the cities with the lowest rate of inhabitants per dwelling in Europe and, at the same time, one of the cities with the highest rates of vacant dwellings (and a significant unsatisfied demand). And in this scenario it is difficult to see what is the public interest of the new dwellings that the Olympic Village will leave to the city, or what profit could result from the new centrality zone that is planned for an old industrial area in the East of Madrid. The nearness of this new centrality to a proletarian neighbourhood as is San Blas raise also the fear of housing evictions, a phenomenon that always accompanies mega-events of this kind, as the inhabitants of the urban core in Barcelona know very well. Even the hotel trade sector, that could expect profits, suspiciously look at events such as the Madrid Olympics or Valencia’s Americas Cup, as they are afraid of a possible saturation of the sector with a consequent threat of devaluation.

By now it should be evident that the organization of a mega-event does not in fact generate benefits for the general public and, instead, causes several nuisances. But an advantage from these kind of events has not yet been mentioned, an advantage gained not for the people, but for the urban governments. I’m referring to the consensus that these events encourage. A consensus that functions as a distraction in order to carry out all kinds of business and urban operations that would, otherwise, generate opposition. Also, this consensus decreases the legitimacy of the groups that fight against urban renewal, turning the conflicts into a police matter. The significance of this consensus advantage seems very clear in the Forum de las Culturas case. In fact, it is very difficult to create a new event capable of generating a consensus that a traditional event such as the Olympic Games has by nature. That’s why the Forum’s organizers select as their motto “Peace, cultural diversity and environmental sustainability”, in an effort to win the people’s trust and approval. And, of course, the need for a consensus combined with the desire to offer a bright image of the city, always leads to a higher level of repression.

I would like to finish by asking what can be expected or what can be done. One of the possible advantages of such events for the urban social movements is based on the government’s need to portray a peaceful and pleasant image of the city. These movements can exploit this need in order to catapult their stance up to an empowered position for negotiating with the local government. But if we focus on the Madrid Olympic candidacy, the future doesn’t look that clear: the Olympic candidacy has been approved almost unanimously. Regardless of the possible involvement of all political parties in the urban business, I believe that the seamless and enthusiastic support of the Olympic candidacy shown by leftwing politicians, is motivated by their traditional acceptance of orthodox development policies. The leftwing political parties usually carry the burden of an uncritical belief in the idea that good macro-economic figures entail benefits for the people. From a leftwing position, it is usual to accept that businessmen create jobs and raise wages when they obtain more profits, so it is worth it to make concessions and to offer incentives to firms in order to generate employment, even if the flexible laws that are required to please the businessmen allow the enterprises to move or to fire workers whenever they want. By now it should be evident that a city that strives to create a good business climate is not beneficial for its citizens or, at least, it is incompatible with the strong and well organized proletarian class, a class able to exert influence on its working conditions. I’m not trying to defend some kind of cancellation or reversal of development towards some sort of lost paradise. I only suggest that leftwing opposition parties should try to elaborate an alternate development strategy of those implemented by the activists of the city as a growth machine, an alternative that should pay attention to the old division between use value and exchange value, a division that only the local elites can afford to neglect. In fact, local elites must neglect this division, since they are deeply interested in claiming that economic growth and social welfare are one and the same. The mega-events strategy only highlights the trap in which the left always naively fall into (or, at least, that’s what I want to believe). As John Logan and Harvey Molotch said, “a skilled politician delivers growth while giving a good circus”.


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Going for Gold: Globalizing the Olympics, Localizing the Games. J. R. Short

This paper discusses the siting of the Summer Olympic Games at the global, national and local scales. The increasing corporatization of the Games is examined. Their use in city marketing campaigns is evaluated. The increasing competition between cities to host the Games is part of the growing competition between world cities for global spectacles.


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