Property Taxes, Cost, Benefits, Property Values, Rent

Economists have tried repeatedly to justify or refute politicians' claims that building new sports stadiums will positively affect jobs, tourism, and local economic growth. However, they have never been successful. They have, however, found a positive relationship between sports stadiums and the cost of housing in the area surrounding such stadiums.

Using statistical analysis, two economists, Edward Coulson and Gerald Carlino, examined rents in 53 cities during the 1990s, including Houston, Dallas, St. Louis, Philadelphia, Memphis, and others. The economists found that rents in central-city areas where stadiums were located were 8% higher. In fact, each resident of a city with a National Football League team paid an additional $184 annually for the privilege of living there. Since higher rents imply higher property values, property tax receipts increase. Government revenues from property taxes were, on average, approximately $50 million higher in 1999 in NFL cities than in other cities. Given that governments rely on property taxes to finance a number of local goods, such as police, fire prevention, and public education, everyone in the city benefits as a result. In fact, they were able to use this information to explain trends in football franchise locations. For example, a few years ago, "the Houston Oilers moved to Tennessee and morphed into the Titans. But Dallas retained its iconic Cowboys. By 1999, rents in Dallas had risen about 37 percent while rents in Houston had grown more slowly, about 22 percent."

(Updated July, 2004)