Canada's Housing Bubble

Mar 01, 2010 Jack Broom and Kristi Heim Seattle Times

The legacy of the Vancouver Olympics — good or bad — will linger long after the party is over. Boosters say the city and British Columbia will benefit from a slew of public projects like a new SkyTrain line, as well as intangible boosts in civic pride and international image. But critics say the burden on taxpayers will outweigh the benefits.

Vancouver — Any time you've got cops cutting off liquor sales early, and downtown streets awash in celebrants, you've got one heck of a party on your hands.

And if that party costs more than $6 billion to stage, you want to make sure that when it's over, you wake up with something more to remember it by than a hangover.

Long after the 2010 Winter Olympics disappear from the headlines, this city and province will utilize massive public projects the Games helped trigger, a list topped by a $2 billion transit line, a $900 million convention center and a $1 billion highway expansion to Whistler.

"Ten or 15 years from now, we may consider those infrastructure pieces our legacy," even though none is counted as a direct expense of the Olympics, said Rob VanWynsberghe, lead researcher for a University of British Columbia group studying the impact of the Games.

Less tangible, but just as important, has been the boost to the national psyche from what B.C. Premier Gordon Campbell calls "the single most unifying event the country has had for almost 50 years."

Former Vancouver Mayor Sam Sullivan, sitting in a chic cafe in a new complex at the edge of the city's poorest neighborhood, said the development mixing affordable housing and high-end condos with retail shops is just one of many benefits the Games spawned in Vancouver.

"The Olympics allowed us to miss the international recession and the economic meltdown," he said.

Final numbers in year

It will be a year before VanWynsberghe and his UBC colleagues say whether Vancouver made or lost money by hosting the Games. But he already sees indication of some effects:

• Convention bookings in Vancouver have been up 46 percent since the Olympics were announced, a trend he expects to continue.

• The public discussion of homelessness in Vancouver has increased pressure on officials to support affordable housing, and will play a role in determining the future of the $1 billion Olympic Village, aimed to become a mix of market-rate and subsidized housing.

• The attention to "green" products and solutions could help develop "a business brand around sustainability."

• The attention to aboriginal rights and history added momentum to land claims pressed by native groups.

Olympic critics dispute Sullivan's claim that the Games countered the effect of the recession in Vancouver.

Elizabeth Kelliher, of the Franciscan Sisters of the Atonement, stood in the rain on the closing weekend during a demonstration against homelessness, saying social programs suffered in recent years. "There's no money left because the cost of the Games keeps going up."

Longer food lines

And while Olympic projects were under way, she saw a 50 percent rise in people waiting in line for meals provided by the sisters in Vancouver's Downtown Eastside. "We've had construction jobs, but that part is finished and now they're unemployed again," she said.

Holding an Olympics is by no means a guaranteed moneymaker for the host city. Some studies suggest that even cities that have claimed to hold profit-making Olympics did so by not counting major government expenses that made the Games possible.

By the measure of recent Olympics, building plans for Vancouver and Whistler were modest. Only a few new sports venues were constructed, notably the Richmond Olympic Oval for speedskating. Instead, organizers remodeled existing venues, such as BC Place in Vancouver.

Still, determining the cost of these Games is no easy matter. VANOC, the Vancouver Organizing Committee, has an operating budget of $1.8 billion Canadian (about $1.75 billion U.S.) and has spent an additional $580 million on venues.

But that doesn't include the complete cost of facilities created or improved for the Games. VANOC's facilities budget, for example, includes just $63 million toward the $170 million Richmond Olympic Oval, built by the city of Richmond.

The Oval, the largest facility created for the Games, will be a city-owned sports and fitness complex, albeit a rather deluxe one.

Likewise, the VANOC budget doesn't include the convention center or the creation of the 12-mile Canada Line rail-transit route, long-sought public projects for which the Olympics provided a catalyst.

The government of Canada spent $900 million more on security, five times the initial estimate due to terrorism concerns.

A tally by The Vancouver Sun put the total spending by all levels of government — national, provincial and local — on projects and services associated with the Games at $6 billion. Others have suggested the amount may approach $8 billion.

Across Canada

Campbell, one of the Olympics' biggest backers, traveled as far away as Halifax, Nova Scotia and Prince Edward Island to join the Olympic torch on parts of its 28,000-mile relay back and forth across Canada. The relay drew some 15 million spectators.

The sentiment he expects Canadians to take away from these Games is "that there's nothing we can't do when we set our minds to it."

For British Columbia specifically, Campbell predicts the Olympics will be a "long-term launchpad" for investment.

Campbell has no patience for those who say money spent on the Olympics might have been better used elsewhere, such as on social services.

VANOC Chief Executive John Furlong said the emotional lift that came with Canada's success in the Games will have a lasting impact.

"Being there when Canada won its first gold medal ... and realizing its place in history and its effect on the country... ," he said, "all of these things together have caused a different kind of patriotism to break out here. It's beautiful to look at."

Despite the flurry of problems and gaffes plaguing the Games' first few days — including the fatal crash of a Republic of Georgia luge racer hours before the Opening Ceremony — this fact was inescapable:

Vancouver looked gorgeous on TV.

"We prayed to the weather gods for 12 years and they delivered," said Rick Antonson, president and CEO of Tourism Vancouver.

NBC's shots of Vancouver's downtown and waterfront, and aerial views of Whistler ski areas, provided a media boost no marketing campaign could have delivered.

Even the springlike conditions that played havoc with "winter" sports venues — particularly Cypress Mountain — had an upside, countering the perception of Canada as the "frozen North," Antonson said.

"These are probably the first Winter Games where the public went to the Games and then went home to do their gardening."

But Antonson cautioned that the anticipated tourism boost from the Olympics may be slow in coming.

"We've helped build a great awareness of Vancouver," he said. "Converting that awareness into cash-register rings right away will be difficult, with the international slowdown in travel."

Or put another way, now that the party is over, we return to our regularly scheduled recession, already in progress.