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Why Streetcars Aren’t About Transit

The Economic Development Argument for Trams

Story by Aaron Wiener

Illustration by Steven Howard

Published on Jan 12, 2014

On a recent Thursday morning, about 20 people huddled around a glass shelter on Washington, D.C.’s H Street NE and peered westward along a pair of freshly laid streetcar tracks. One hundred fifty years ago, a streetcar would have pulled up to shuttle passengers eastward. A year from now, too, a streetcar will collect fares from that spot. For now, however, the group stood in the brisk morning breeze and waited for the bus.

In 1862, the Washington and Georgetown Railroad ran the first streetcar in D.C. The new transit mode, powered first by horses and later by electricity, would transform the city for exactly 100 years. John F. Kennedy was in the White House and tensions over newly integrated schools were roiling when the last one ran in 1962, victim to a population flight to the suburbs, the nationwide car boom and management problems.

Decades ago, it would have seemed nostalgic, irrational, even, to imagine the streetcars returning to D.C. No longer. In cities in every corner of the country, this technology once thought of as obsolete is making a comeback.

Today, four cities in the U.S. have operational modern streetcars: Portland, Seattle, New Orleans and Tacoma, Wash. (This last city terms its system “light rail” but uses the same cars as Portland.) In the next few years, that number is expected to quintuple, with 16 more streetcar systems funded and in the construction or design stage. In the next 12 months alone, lines in Salt Lake City, Atlanta, D.C., Tucson and Seattle — yes, the city’s second — are scheduled to open. Several other cities have so-called vintage streetcars that often cater to tourists and are typically not counted in the modern streetcar movement.

The streetcar renaissance isn’t coming cheap. According to the Federal Transit Administration, the 14 streetcar projects that have received U.S. Department of Transportation funding since 2009 have a total anticipated price tag of $1.2 billion. That doesn’t include a few major projects like D.C.’s, whose initial 22-mile priority network alone is expected to cost about $1 billion, according to the District Department of Transportation (DDOT). Of the cost of those 14 projects, federal grants are covering just under half, or $524 million.

While some cities that want streetcars are places that have already embraced transit, others are hardly what you’d call meccas of alternative transportation. Take Kansas City, whose city council recently approved a measure to buy streetcars for a downtown line; Oklahoma City, where the streetcar is expected to start running in 2017; Detroit, which is known as Motor City for a reason and hopes to have its first line running in 2016; or Atlanta, a city dominated by traffic headaches that will open its first line this year.

“It’s radiated out from Portland, and it’s truly a national movement,” says Rep. Earl Blumenauer, who represents most of Portland in Congress and previously helped bring the streetcar to the city as Portland’s commissioner of public works. “We’re proud of thinking that we’re the model that people look at in terms of what a difference it’s made and how it’s worked.”

A 2012 Blumenauer poster states flatly, “Earl started the national streetcar movement in Portland,” and there’s no doubt that other adopters have looked to the city as an inspiration and a guide. There is a logic to that — Portland has long been a city with a strong interest in alternative modes of transportation. Blumenauer himself is perhaps best known for the oversized bicycle lapel pin he often wears. But the federal government has played a major role, too. In 2005, former president George W. Bush signed legislation creating the Small Starts Program, which provides grants to assist in the construction of small-scale transit projects like streetcars and bus rapid transit.

The program got off to a rocky start. Blumenauer says the Bush administration “couldn’t really implement it.” But when President Obama entered the White House, he and others lobbied hard, and money from the program started to flow to cities like Portland. In ensuing years, stimulus funds and Obama’s TIGER Grants for transportation projects have added to the pot. Health care reform may be Obama’s signature achievement, but Americans will likely ride streetcars that the administration helped build for decades to come.

“The current administration has done a lot to make it easier, and you could put the blame or the credit, as the case may be, on Secretary [of Transportation Ray] LaHood,” says streetcar skeptic Tom Rubin, who served as chief financial officer of two California transit agencies and says he’s consulted or audited more than 100 such agencies.

While the modern streetcar trend is relatively new to the U.S., we’re late adapters on the global stage. In some European cities, streetcars were introduced or reintroduced in the 1980s. In others, they’ve run continuously since the 19th century. Halfway around the globe, Melbourne has the biggest streetcar network in the world, with more than 150 miles of tracks.

Could American cities be headed that way? They likely won’t achieve the sheer scale of Melbourne’s network, but Blumenauer says he expects to see the streetcar’s expansion across the country continue.

“I don’t think it’s turning back,” he says.

As this throwback technology enjoys its unlikely renaissance, it’s raising the question of whether streetcars — neither the cheapest nor the fastest way of moving people around cities — are simply a gimmicky fad or actually the transit mode of both past and future.

The Streetcar Conundrum

Twenty years ago, Michael Powell picked up a newspaper and saw the news he thought would destroy his business. The city of Portland, he read, was planning to run a streetcar right past Powell’s Books, which claims on its website to be the “largest independent new and used bookstore in the world.”

“I read in the paper that there was a plan to build such a device and it was going to go on both sides of my bookstore, and I said, ‘Oh my gosh!’” Powell recalls. “I thought I’d be out of business.”

Powell had heard horror stories from the construction of Portland’s light rail network, in which streets were torn up and businesses saw revenues plummet. He figured the impact of the streetcar preparations would be the same. So he began to do some research, and soon converted to the belief that not only would the streetcar’s adverse effects be much more limited than light rail’s, but its benefits once operational would be substantial for his business. He became such a believer that went on to serve on the streetcar’s board for the better part of 20 years, including eight as chairman.

Bluemenauer was one of the leading proselytizers helping bring around business owners like Powell. It took, Blumenauer says, “a lot of education” to convince Portlanders that the streetcar was in their interest. “We worked extensively with the business community, particularly developers and property owners who were persuaded that this was an enhancement to their property,” he says.

Like the D.C. streetcar, originally supposed to start running in 2009, Portland’s didn’t come quickly: Eleven years separated its conception from its opening in 2001. But, Powell says, it has been an “unmitigated success.” At first, daily ridership hovered around 4,000 on weekdays. It’s now climbed to nearly 17,000, with a projected 4.8 million total rides in fiscal year 2014.

The biggest impact, however, has come not in mobility but rather on the development front. Where development typically follows transit infrastructure in what urban planners call “transit-oriented development,” Powell says the Portland streetcar has flipped that mantra on its head.

“We always saw it as a development-oriented tool,” he says. “We referred to it as development-oriented transit.”

This is the crux of the streetcar conundrum. It’s ostensibly a transit mode, and one that critics assail as a very expensive way of moving people around at low speeds. But at its essence, the streetcar is a city-building tool — and by most accounts a very successful one.

“Billions of dollars [of development] have been built adjacent to the streetcar,” Blumenauer says. “It’s the hottest real estate market in the city. I’ve had developers tell me they would have actually invested more in the streetcar if they’d known how much money it would make them.”

According to a 2008 report by the Portland transportation department and Portland Streetcar, Inc., $3.5 billion worth of development occurred within two blocks of the streetcar route since it was chosen in 1997. Within one block of the route, developers built to an average of 90 percent of the allowable density, versus just 43 percent at three or more blocks from the streetcar, a sign of the perceived value of property near the line. Prior to 1997, 19 percent of development in the central business district occurred within a block of the future streetcar lines. After ’97, that figure jumped to 55 percent.

That’s why Powell’s work persuading business owners as skeptical as he once was hasn’t been particularly difficult.

“They would say, ‘You’re going to destroy my business!’” Powell says of his time collecting petitions to allow a tax on businesses that would benefit from the nearby streetcar. “And I’d say, ‘You’re going to go to the beach for a week, and when you get back, two things will have happened: They will have built it on your block, and your property value will have doubled. Does that speak to you?’”

Even critics such as Randal O’Toole, an analyst of urban and transportation issues at the libertarian Cato Institute who has published reports with names like “The Streetcar Scam” and “The Great Streetcar Conspiracy,” admits these corridors have seen significant development since tracks were laid. He attributes it, however, to subsidies for transit-oriented development, not the mere addition of the streetcar. “…[D]evelopers were, for the most part, following the subsidies, not the streetcar,” O’Toole writes in “The Great Streetcar Conspiracy,” published by Cato in 2012.

D.C., too, expects big gains from the streetcar. According to a study conducted last year by the D.C. Office of Planning with the help of several consultants, the streetcar network will add between $5 billion and $7 billion to existing property values and spark an additional $5 billion to $8 billion in new development within 10 years of the system’s completion. Despite the project’s high cost, the study found, the economic boost to real estate and development within a quarter-mile of new routes would exceed it by between 600 and 1,000 percent in that 10-year period.

Local businesses are giddy at the prospect. “Once the trolley comes, it’s really going to take off,” says Ricardo Vergara, co-owner of the H Street Country Club, a bar that’s likely to see more business once the streetcar starts running past it. Jen DeMayo, community director at the Atlas Performing Arts Center on H Street, agrees. “It’s totally going to change things,” she says.

What is it about streetcars that make them such an effective development tool? To advocates, all the factors that limit streetcars’ utility from a mass-transit perspective enhance their development-boosting capacity.

Take the tracks. They’re a streetcar’s shackles, confining it to a fixed route. What happens if someone double parks or breaks down in the streetcar lane, or if a delivery truck is too wide and juts into the route? A bus would simply maneuver around the obstruction, but a streetcar must wait. How about if emergency utility repairs need to be made on the road, or if a sinkhole opens up under it, as has happened several times recently in D.C.? A bus can take a detour, but a streetcar can’t.

Yet the rigidity of a streetcar route is exactly what makes it so valuable from a development perspective.

“You see in city after city that the streetcar is a signal to the public, to the property owners, to investors and developers, that something new is going to happen and it’s going to be there for a long time,” Blumenauer says. “Tucson’s new streetcar is not going to open for eight or nine months, and if you walk, bike or drive the streetcar line, you see already it’s shaping development patterns and people are making investments. Those tracks on H Street in D.C. are a signal to property owners that the line is going to be there for 50 years.”

How about speed? A streetcar is considerably slower than a subway or light rail line with a dedicated right of way, and perhaps even slower than a bus due to its lack of flexibility (though Powell points out that streetcars fare better than buses in icy conditions). But business owners like the slow-but-steady pace of the streetcar, which gives passengers more time to take in their surroundings and notice nearby shops they might want to visit.

“Those 4.5 million people see the store in the course of their travels,” Powell says, “and that’s a good thing.”

“It’s not meant to be fast,” concurs Frank Harscher, a longtime transportation consultant who helped lead the early planning of the Atlanta streetcar. “You need to have a slower mode to have more stops and for more opportunities for development to occur.”

Then, of course, there is the intentionality that comes with building a costly new transit line from scratch. To lay tracks in an area, a city has to be pretty bullish on its potential to draw traffic. That bullishness breeds other investments and, often, coordinated planning efforts. While advocates may disagree with O’Toole’s conclusion that streetcars are a faddish waste of public money, they don’t (for the most part) argue with his point that rail lines alone cannot transform neighborhoods. Part of Portland’s success in attracting development to streetcar corridors has come from high-density zoning and, yes, not insignificant subsidies for private development along the line.

“If you’re going to make that kind of investment, you have to be aware of your land use and your zoning so you actually have development potential,” says Rick Gustafson, executive director of Portland Streetcar, Inc. “In our case, we had vacant land and the zoning to support it.”

Gustafson, who’s active in the national Community Streetcar Coalition and whom Blumenauer describes as “kind of a one-man evangelical team” for streetcars, says he has particularly high hopes for D.C.’s streetcar, given the city’s planning efforts. “In Washington, D.C.’s case, actually you have one of the best cases for streetcar in the country,” he says. “There’s a lot of potential for additional growth in the city. And the comprehensive plan that [Planning Director] Harriet Tregoning is developing is one of the best I’ve seen.”

The Psychology of Streetcars

To the extent that streetcars are a boon to a city’s transit network, it’s more a matter of perception than actual mobility. The H Street streetcar will largely run along the exact same route as the X2 bus, yet it’s expected to give a substantial boost to the corridor. That’s partly because streetcars tend to offer a smoother and quieter ride than buses, and partly because a streetcar’s tracks and fixed route make it easier for visitors to figure out. But mostly it’s a simple question of psychology.

“You see it in D.C. in terms of the general population that takes the Metro,” Blumenauer says. “People who wouldn’t get on a bus at gunpoint will take the Metro. And the streetcar’s even friendlier because it’s aboveground.”

“It’s a feeling thing,” Harscher says. “Once you ride the system, you really feel like you’re taking a step down when you ride a bus.”

That’s why the streetcar could be such a boon to H Street businesses, even though it will largely replicate the X2 bus. There’s no Metro stop near the street’s nightlife epicenter, and some would-be visitors are kept away by the X2’s reputation for dodgy service. Even if the streetcar won’t get people to H Street’s bars and restaurants any faster, they’re likely to feel more comfortable about making the trip.

“I think the perception will change,” DeMayo says, “even though it’s not going to be any easier or harder to get to H Street.”

The question is how long that change will last. The D.C. streetcar may initially seem shiny and clean compared to buses, but it could also quickly come to resemble another X2. At that point, will the people who formerly took taxis to H Street or kept their distance continue to come by streetcar? Portland, while a model for D.C. in other ways, doesn’t offer much in the way of precedent because of its different demographics.

But comparisons to bus and heavy rail may not be entirely appropriate, given that streetcars are principally aimed not at long commutes, but at short trips currently taken by foot, by car or not at all.

“We’re looking for those relatively short trips and to provide another option to do that,” says Ronaldo T. Nicholson, DDOT’s chief engineer. “That’s what streetcar is for.”

Part of the idea, particularly in cities with few options aside from driving, is to cut down on auto congestion during the day and on weekends, when people travel short distances between meetings or to the movies. Nicholson says the goal is to provide “another option for single-occupancy vehicles within the city, within the neighborhoods.”

But within downtowns, the streetcar’s main function might not be to replace cars, but to complement the pedestrian experience. Harscher refers to the streetcar’s role as “extended pedestrianism.” Douglas Hooker, executive director of the Atlanta Regional Commission, the planning agency for the 10-county region around Atlanta, calls it “enhanced pedestrianization.” D.C.’s study says it “extends the walk.”

In this capacity, it serves the almost paradoxical double function of both replacing walking trips and encouraging them. Instead of walking three-quarters of a mile to run an errand, a person might hop on the streetcar instead. But rather than ordering a product online, a person might opt for a streetcar ride to a shop a few blocks away, and perhaps pick up a cup of coffee or a bottle of wine while strolling back to the office. It’s not a fundamental change to how people already operate, but rather an extension that promotes longer and more frequent trips — and the economic gains that accompany them.

“It’s pretty easy for people to hop on and off the streetcar,” Blumenauer says. “It extends the pedestrian experience quite significantly, particularly in a city like Portland where it rains all the time.”

Of course, there’s no reason a bus couldn’t serve the same function. But if people find the streetcar more reliable, more predictable, more comfortable and, at least in D.C.’s case, cheaper, they’re more likely to weave the streetcar into their pedestrian experience than chance the frustration they’ve experienced on the bus.

“I Don’t See That ‘Back to the Future’ Thing Being So Bad”

None of this is to say that streetcars are without their share of skeptics. There are several lines of criticism, but the main one is cost. Any way you slice it, streetcars will never be the most cost-effective form of public transportation.

“I think streetcars are an excellent technology if your goal is to spend a whole lot of money without accomplishing anything, except maybe making streets more congested,” O’Toole says. “There’s nothing you can do with streetcars that you can’t do faster, better [and] cheaper with buses. Except spend a lot more money.”

A recent alternatives assessment by the D.C. government for a new downtown transit system serves as a guide to the pros and cons of streetcars. The leading streetcar option, which would extend westward from the H Street line to Georgetown, would cost $348 million to build, according to the assessment. A “premium bus” route, which would partly share lanes with traffic and partly run in a dedicated lane, would cost $214 million. Annual operations and maintenance costs for the streetcar would be $9.1 million, versus $3.3 million for the bus. (In this case, the streetcar would have an exclusive lane for a third of its route, and would move 6 percent to 14 percent faster than the bus alternative.)

According to DDOT spokesperson Reggie Sanders, with data from D.C.’s experience and from the American Public Transportation Association, the capital cost per mile of streetcar is between $30 million and $75 million. Bus rapid transit costs anywhere between $3 million and $30 million. Light rail, at $50 million to $100 million, and heavy rail, at $150 million to $300 million, are more expensive.

Still, other factors make streetcars cost-competitive. They have a higher capacity, allowing them to move more people even if they might not run as frequently as buses. According to the concept plan for an expansion of Portland’s streetcar passed by the Portland City Council in 2009, a streetcar there can hold 81 people, or 110 in a “crush design.” A bus can hold only 51, or 64 in a squeeze.

That allows a city to purchase and maintain fewer vehicles. And while streetcars are considerably more expensive, they also last longer. The Portland plan states that streetcars cost $3.5 million per vehicle and last 30 years. Buses cost $430,000 per vehicle, but last only 15 years.

Cost aside, some of the streetcar’s other shortcomings are already evident in D.C. It’s proven a hazard to cyclists unused to dealing with tracks in the road. Delays in the line’s opening — initially scheduled for 2009, then 2012, then 2013 and finally 2014 — have also frustrated residents and business owners along H Street who expected the disruption to be over by now.

Then there are fears of displacement. Anticipation of the streetcar’s arrival has already helped spark a development boom and rising property values, which is good news for homeowners and new restaurants, but bad news for renters and longtime businesses that have to shell out more for their leases. Some residents have expressed concern that the streetcar will only serve bar-goers and the young professionals now flocking to the District, but not older residents who were perfectly satisfied with a quieter neighborhood.

D.C.’s streetcar planning study brings up “the possibility of dislocation posed by a 5 percent to 12 percent increase in property values,” which are “most likely to appear where streetcar corridors pass through neighborhoods with lower household incomes, lower housing prices, and higher proportions of renters.” In certain neighborhoods, the study forecasts, increased demand will balance out with an increasing supply of housing through new development. But in neighborhoods with less capacity for additional development, like the H Street area, things could get pricier fast.

Gentrification doesn’t appear to be as much of a concern along some other streetcar routes. In Atlanta, a good chunk of the line will pass through already developed parts of downtown. In Portland, the first streetcar line ran through an industrial area. “We didn’t have any residents, so we didn’t drive anybody out,” Powell says.

There are also allegations that the streetcar is a gimmick, meant to appeal to tourists and newcomers for its novelty factor without providing the best service. But supporters say the throwback nature of streetcars only works to their advantage, playing to people’s “nostalgia for a slightly different time,” according to Blumenauer.

“I don’t see that Back to the Future thing being so bad,” Harscher says.

For the most part, the streetcars already in operation and underway seem to be quite popular. In Atlanta, Harscher says, streetcar skepticism has largely faded. “I think the argument has been had,” he says, “and people are satisfied with the success.” In Portland, according to Powell, there isn’t any substantial political opposition to the streetcar, and when there’s talk of expansion, “the neighborhoods come screaming: ‘We want it! We want it!’”

Along D.C.’s H Street, says Anwar Saleem, executive director of the local business organization H Street Main Street, “People are ecstatic.” If it were up to him, the city would be talking about expanding the network beyond its planned 37 miles.

A Route Forward

“Streetcars that replace bus lines are not a mobility improvement,” transit planning consultant Jarrett Walker wrote emphatically in a 2009 post on his blog Human Transit. “If you replace a bus with a streetcar on the same route, and make no other improvements, nobody will be able to get anywhere any faster than they could before.” [Emphasis in original.]

Walker is right that from a mobility perspective, streetcars don’t do anything buses can’t — unless new infrastructure is installed, like dedicated lanes, that would deliver the same improvements to bus lines.

No, streetcars are not a superior technology for moving people around. They may be a bit smoother and a bit bigger and a bit less polluting than buses, but they’re not faster, and they’re certainly not cheaper. But that’s almost beside the point, because at their essence streetcars aren’t tools for transportation. They are tools for developing corridors and bringing investment to neighborhoods.

Part of the reason may lie in psychological biases that have little grounding in reality. Part may lie in the tracks themselves, a sign of reliability to passengers and of permanence to developers.

Whatever the reason, streetcars have so far shown themselves to be an effective development tool — certainly more effective than they are at transporting people at a reasonable cost. For a city in need of tax revenue, for a developer in need of high-demand corridors, or for a neighborhood in need of the retail and housing and amenities, the spread of this old technology is not so much an end in itself as a harbinger of things to come.

Our features are made possible with generous support from The Ford Foundation.

Aaron Wiener covers urban development for the Washington City Paper. He previously worked as a correspondent for the Los Angeles Times in Berlin and an editor at The Washington Independent, Talking Points Memo, and The Washington Post. He has also written for Slate, Foreign Policy, Monocle, The New Republic, and The American Prospect, among other publications.