Locality housing northern stadium (5)
I believe the answer is:
arena
'stadium' is the definition.
('arena' can be a synonym of 'stadium')
'locality housing northern' is the wordplay.
'locality' becomes 'area' (I've seen this before).
'housing' indicates putting letters inside.
'northern' becomes 'n' (abbreviation e.g. N. Ireland).
'area' going around 'n' is 'ARENA'.
(Other definitions for arena that I've seen before include "Circus ring" , "An era (anag.)" , "Action space in centre of amphitheatre" , "Place of activity, especially conflict" , "Contest venue" .)