Streetcars Drive Economic Development Transportation is often secondary motivation

Several midsized cities across the United States have pursued streetcar development in their urban cores in the last few years. As transportation development and support sources, such as the U.S. Department of Transportation, provide funding for streetcars, the objective seems to be transportation. But in addition, cities count on streetcars to drive economic development.

Jeffrey Brown, Ph.D., Professor and Chairperson in the Department of Urban and Regional Planning at Florida State University, and Joel Mendez, Ph.D., Assistant Professor in the School of Public Affairs and Administration at The University of Kansas have been studying the effect of streetcars on urban development.

Campaigns for economic investments and voter support for tax referendums to fund streetcars often reference Portland, Oregon’s investment in its streetcar in 2001. That investment led to $4 billion in development in Portland’s urban core. Mendez notes that economic development is a positive – and often the most significant – component - of streetcars’ benefits, but he is not certain the community perceives it this way. 

“I think people see it as a transportation option, which makes sense,” Mendez says. “A lot of the funding comes from transportation sources, including the U.S. Department of Transportation. As a result, communities anticipate significant mobility benefits as a result of these investments.”

But Mendez says that in most instances streetcars are not likely to significantly improve someone's mobility.

“As a transportation mode, it's very slow,” Mendez says. “And the routes tend to be very short and stimulate development, although it's not always guaranteed.”

In his recent paper with Brown, they note that often cities develop streetcar lines in areas that are underdeveloped, hoping businesses will spring up around it. That message may not be clear in the campaigns for launching streetcar lines, which often emphasize transportation benefits. In general, streetcar routes are short, and – in relation to cars or buses – slow. 

But streetcars can be a boon for the tourist industry, Mendez says. In addition to Portland, Oregon’s investment in a streetcar 24 years ago, the area was bolstered by tax incentives for commercial development.

“The outcome of this paper really showed that in some areas, we did see more commercial and residential development in streetcar service areas. So, there might be something special about the streetcar making an area desirable for development. But at the same time, it's not guaranteed because in some other spaces, we actually saw more growth in non-streetcar service areas.”

Mendez notes that people from almost every city he and Brown talked to about modern streetcars say that the people using the streetcars are usually tourists.

“I could see commercial development building off of that momentum. Boosting tourism is a valuable objective,” Mendez notes.