Sports Stadiums & Home Value
Impact of Sports Stadiums on Home Value
In mid-size towns and bigger cities, there are all sorts of community and neighborhood elements that can factor into home value. And often, we don’t separate them from one another; we think instead about city attractions in general, or the public transportation available in bigger towns, etc. Last year though, The Atlantic published a piece that highlighted one aspect of city living in particular as being worthy of consideration: the presence of a major stadium.
The article made the claim that sports stadiums are a bad deal for cities. It cited heavy tax bills, unfulfilled timelines on construction, and empty promises of job creation (not to mention crowds and traffic). It noted that in some cases stadiums absorb available funds that ought to be going toward much-needed infrastructure improvements, or even education. At the same time though, the article pointed out that municipalities “can support local sports without selling out their citizens.” The writer acknowledged various benefits of local sports teams, such as communal camaraderie and, in some ways, economic opportunity.
From this analysis it’s difficult to draw any sort of blanket conclusion about any appraisal effect from the presence of a stadium. And for that matter, there is no universal conclusion. A brand new stadium in a growing town is going to have a very different impact on valuation than an old one in an established city. But let’s consider a few more specific factors within this conversation, and with an eye on the near future.
One of the most relevant projects we can look at in terms of new stadium construction is San Francisco’s Chase Center. Newly built as a home for the NBA’s Golden State Warriors, the Chase Center is a billion-plus-dollar venue that was privately financed, and which is going to have its own hotel, condo units, and surrounding shops and restaurants. By all appearances, it’s checking off the boxes regarding what can make a stadium valuable to a community: It’s beautiful and exciting, it’s eco-friendly, it comes with amenities beyond sports, and, again, it was privately financed. At the same time though, one article looking at trendy San Francisco neighborhoods quoted multiple industry experts who were worried about the traffic around the Chase Center. They used this as reason to invest in nearby neighborhoods rather than those immediately surrounding the new stadium, which could go to show that adding a potential traffic hazard to an already-crowded area can be something of a deal breaker. The implication is that many may not want to live too close to the stadium, even if everything else about the stadium seems promising.
Potential For New Developments
When assessing the neighborhood around a stadium, it’s important to keep in mind that a stadium can become a consistent magnet for other businesses and developments. As a thought experiment of sorts, imagine just a stadium being built in the middle of an empty expanse within a big city. Wouldn’t you imagine that five years later it would be surrounded by bars, restaurants, condos and hotels? Or, with the sudden spread of gambling legislation across the U.S., might a new stadium also be a magnet for in-person sportsbooks, or new bars housing betting activity? This last point is actually worth considering even for older stadiums established in their communities. Major League Baseball, for instance, is the “old” member among America’s major professional sports, and has a number of historic stadiums that are firmly entrenched in their cities. Yet MLB betting is getting popular too, which means there’s plenty of potential for new, related businesses to pop up around these stadiums. Simply put, there will always be potential for commercial growth in a stadium’s vicinity, which can hurt or help nearby home values, but is certainly worth keeping in mind.
Smaller Towns May Be Different
For the most part data seems to suggest that homes near long-established stadiums can be more valuable, but that newer stadiums have not boosted values (and may even deflate them in some cases). But this is only taking big stadiums in big cities into account. As mentioned above, a brand new stadium in a growing town can be a different proposition. Consider, for instance, a mid-size town across the country from San Francisco: Raleigh, North Carolina has been a growing city for some time now, and has been included frequently in recent years on various lists relating to positive living environments. The city is just now working through a proposal for an extraordinarily rich downtown stadium complex (meant, eventually, to host an MLS soccer team). And while we can’t say yet what this might do for nearby home values, it may well be an example of a stadium catching a wave, so to speak – being built in the midst of existing growth, and thus possibly positioning itself as a further boost to property values.
Considering these and other factors there is no definite conclusion to be reached. It is clear though that at least in some cases, stadium proximity should be considered for its potential impact on home value.
Kai Hartley is a freelance writer who enjoys going to the movies, golf and Rubix cube.
The LA Clippers hope to break ground by 2021 for the Inglewood Arena with 18,500 seats. There are major constructions going around downtown LA and near USC. Lots of construction in Hollywood & other parts of the Valley. And new subway lines being built. Real estate development throttle is WFO in LA
Some folks don’t think these stadiums benefit the taxpayers and the region but development in proximity to the venues enhances the area and region which grows the local tax base. There are intangible benefits
Being a big city appraiser (San Diego), I’ve heard cases where people were coached to the idea that rural appraisals are always more difficult than the cookie cutter big city appraisals. San Diego is very unique in that over the past 15 years we added a downtown professional baseball stadium (challenging area to value), but lost a professional football team that in essence resulted in the stadium mostly being vacant with little appeal and public draw (challenging to value). Been there done that twice.
Excuse me while I look through some old garage sale VHS tapes (or were they Betamax) looking for some coaching relating to how big city appraisals are supposed to be soooo easy.
Seek the truth, be kind and rewind.
Variables may include changing zoning, variable zoning. It’s a little bit simpler to encroach on industrial rather than residential, and even easier to simply regentrify decrepit areas. Either being more receptive to sales pertaining to highest and best use, as well as accepting zoning changes which may result in higher density allowances. Although at a much larger scale, commercial interests are likely to be more flexible and mobile compared to possibly stubborn individuals whom consider property with additional un measurable emotional values. Parking, structure, road access, that can take a lot of space if planned adequately. Someone will win, someone else will lose.
A football stadium built outside of the city that hosts eight games a year is a loser. A downtown baseball stadium with good transit that hosts 81 games is a winner. Like the Pirates.
1. I don’t find Mr. Hartley’s name on the ASC roster of appraisers so I take his views on value and appraisers with a giant grain of salt. (not listed under Kai, nor Alexander Kai Hartley)
2. His statistics were generalized and non-specific. Neither credibly supporting nor negating his personal views.
3. It appears Mr. hartley’s sports venue views may be influenced by Louisiana (recent) school football days. Not a bad thing, but it lends a potential perspective.
Urban (such as SF or Downtown L.A.) RE development is usually a huge PR con job before the onset of any specific project. Projects which only emphasize the positive aspects rather than being objective analyses. Bill Johnson touched on San Diego’s recent debacles on sports franchises. I can only base my views on the daily news radio I listened to from that area. Seems the people didn’t WANT a new taxpayer-funded stadium complex.
San Francisco is cited as an inferred healthy, beneficial community project yet it seems hard to reconcile that project with California’s oft-stated major concern over affordable housing. Among the highest cost areas to live in taking land available for housing and approving an alternate special use project seems hypocritical. Throwing a few token units in the mix along with retail just enhances developer profit – not affordability of housing. It also creates an inherently higher cost of obligatory city services in the area of the stadium that did not exist before.
How many affordable or less unaffordable condos could have been built there in the total land area occupied by the stadium project?
I’m familiar with the Los Angeles Staples Center Sports complex and Chavez Ravine (Dodgers Stadium) as well as Angele Stadium in Anaheim. I’m also familiar with the USC/Exposition Park area & Memorial Coliseum.
NOT ONE of these areas can credibly argue municipal benefit to housing values. Not one.
The Inglewood complex (former horse race track) resulted in a moderately large sfr tract of PUDs built to its immediate east side about 20+ years ago. As a stand-alone project, it benefitted the area and may have helped support sone increase in area values, though it was so unique that it could not compare to anything it was surrounded by. Nothing.
I’ve seen Yankee Stadium and The Home of the Atlanta Braves. I fail to see ANY benefit to housing values, or local immediate area community services. There is a considerable detriment. Residential housing does NOT benefit from rearing to giant commercial pay parking lots or industrial areas. Offsite retail uses that attempt to benefit from such complexes are not normally within walking distances. They can hardly be described as neighborhood-serving.
Extremely few giant commercial OR industrial character complexes immediately adjacent to residential uses ‘enhance’ property values. Not even commercial shopping centers. Neither Del Amo Mall in Torrance, CA has ever done so (I grew up in a walking distance of it – and sold RE around it for years). Nor to my knowledge did Tysons Corner ever increase surrounding residential property values in Virginia. RFK Field DC/MD? Someone would have to try very hard to make that case.
Frankly, large sports complexes would be best suited well out into rural areas – say about 25 miles or so from the nearest towns. THEN they may cause housing to be built around them.
There is no doubt such giant complexes benefit their developers and the major sport franchisors. I’ve yet to see credible data that they have net benefit to local taxpayers and residents in any measurable fashion.
Sports are a good thing. They teach youth many things. Done right, positive things. I support local youth, high school and college sports. Anything other than that is purely a business that needs to stand or fall on its own merit. Merit that has still not yet been shown to include benefit to anything other than commercial property values.