Streetcars Need More Than Desire: Why Streetcars Are So Popular and What Streetcar Corridors Need to Be Successful

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Portland_Streetcar_side_crop_sm3Sometimes, what’s old becomes new again. Streetcars were the dominant form of public transportation for several decades in the late 19th-early 20th centuries with dramatic growth all across the United States. Between 1890 and 1907, the number of miles of streetcars in the U.S. grew from 5,783 to 34,404, a nearly 600% increase in less than 20 years1. Unlike subways, the streetcar was not limited to a handful of major cities with many cities around the country quickly building these systems. Instead, the streetcar is cited as helping create development through “streetcar suburbs,” which were located further from the central business district and let residents commute to their jobs, shopping and other trips via this new form of transit2.After just as dramatic a decline in the mid-century, the past decade has seen a major revival of this form of transit. In the past decade, streetcars dramatically increased in popularity with high expectations for stimulating economic development in the aftermath of the recent recession. 

Since 2009, 14 streetcar projects began construction in large and mid-sized cities and received over $500 million in federal funding. The federal government and relative speed of constructing streetcar projects compared to other transit projects helped fuel the boom of streetcar projects in recent years. With the advent of the Transportation Investment Generating Economic Recovery (TIGER) program as part of the American Recovery and Reinvestment Act of 2009 (known as the Recovery Act), streetcar projects started receiving substantial funding from the federal government. In some projects, such as in Portland and Atlanta, the federal government provided over 50% of the project costs with grants as large as $75 million. Between 2009 and 2013 alone, the federal government awarded $502.4 million to local streetcar projects through the Federal Transit Administration (FTA). As such, the federal government covered 41% of construction costs for these recent projects.

Streetcars are different from other modes of transit, though, they are essentially a limited form of light rail. The American Public Transportation Association defines streetcars as a type of passenger rail cars operating on fixed rails in right-of way that is not separated from other traffic and uses power from overhead electric lines3. Another definition distinguishes streetcars from other light rail by noting that streetcars operate in small areas, while light rail lines may extend 10 to 20 miles beyond a central business district. One set of criteria says modern streetcars stop every two-three blocks and move at 8 to 12 mph. Streetcars also usually do not have stations any more elaborate than bus stops.

This boom in streetcar construction, though, has little to do with congestion relief or mobility. The transportation benefits of streetcars are challenged in the literature, due to the limited range and capacity of streetcars, especially when compared with most other modes of transit. For example, the distance for streetcars funded in recent years ranges from 0.6 to 3.9 miles long for an average line of 2.3 miles per project. Furthermore, streetcars are not separated from traffic, which contributes to their lower costs of construction, but also their lower value in addressing congestion issues.

But the actual development impacts of these new streetcar projects are not well understood or studied. The academic literature on the impacts of streetcar systems is nearly non-existent and most of the expectations for streetcars are based on the experiences of lines in Portland and Seattle. Given the substantial amount of investment from localities and the federal government, great expectations for new development, and wide array of cities attempting to construct streetcar systems, the economic development impact of streetcars is important to study and understand.

My recent study, completed as a master’s project for the UNC Department of City and Regional Planning, attempts to address this question. I examined documents from around the country, interviewed federal and local officials, and used property value data to measure the development impacts of streetcar lines in Tucson and Atlanta. This study helps explain why streetcars are so popular, measures the development impact in two corridors and identifies some possible necessary factors for streetcar corridor success. The study found:

  • Many cities base their economic development projections either on the experiences of transit-oriented development on other types of rail, like heavy rail, which may have different development potential or they are based on the experiences of Portland and Seattle, which may have different planning and development environments from other cities. Heavy rail and light rail can travel longer distances, which gives them much larger networks and connectivity that makes development more attractive around those lines. Streetcars lack this connectivity. Furthermore, the development environments of Portland and Seattle, such as zoning, density, and private investment, are very different than the environments in many other cities. This makes expectations based on these two cities unrealistic for some communities.
  • Some streetcar corridors do see substantial growth in development, but not all. Using property values to demonstrate economic development progress, I measured development impacts for recent streetcar lines in Tucson and Atlanta. Tucson demonstrated the largest impact in property values with an over 75% increase in value from two years before the streetcar announcement to 2014. This increase is impressive compared to another corridor in downtown Tucson, Broadway corridor, which actually saw a slight decline in property values, overall. The Broadway corridor received $71.3 million in new transportation-related enhancements and is located nearby, but does not have any fixed rail. As such it served as a good comparison to the streetcar corridor and showed dramatically different results. The Atlanta streetcar corridor, though, saw no increases in property values and saw a significant decline in value that corresponds to the same decline most of the city experienced during the recession. And compared to a comparable corridor in the city, the streetcar corridor did not demonstrate substantially fewer losses in property value. Atlanta illustrates that streetcar investments alone do not stimulate development.
  • Using Tucson and Atlanta, along with Portland and Seattle, I found a number of other factors that may contribute to streetcar corridor development. Existing and growing real estate demand, large property owners, zoning, tax incentives, and other related investments in infrastructure are all necessary components of stimulating economic development in streetcar corridors. Additional data analysis in Tucson found that the streetcar corridor was already seeing large increases in property values prior to the construction of the streetcar, which indicates that existing, strong real estate demand likely plays a major role in streetcar corridor success. Additionally, the corridor in Seattle benefitted from a couple of large property owners in the corridor making major investments in development along the streetcar line, which stimulated other new development. Seattle and Portland also made other major investments along or near the corridors, such as the South Lake Union park in Seattle, which helped make the areas even more attractive.
  • More robust metrics and analysis of streetcar corridors are necessary for communities and the federal government to better understand the potential development impacts of these projects and weigh their costs and benefits. Many cities do not have any metrics in place to determine if development is occurring within their corridors. The federal government also has not implemented any measurements for overseeing their streetcar investments. Furthermore, communities should understand that streetcars likely will not stimulate development without the presence of other investments and factors.

Streetcars can make a great addition to enhancing corridors in cities around the country. But communities should be careful to maintain appropriate expectations for them and remember that other factors and investments are necessary to making these corridors successful.

Bill King is a recent graduate of the UNC-Chapel Hill Master of City and Regional Planning program and a former Community Revitalization Fellow.



1. Konvitz, Josef W. (1987). “Patterns in the Development of Urban Infrastructure”. American Urbanism (Greenwood Press): 204.

2. Wheeler, S. M. (2003). The evolution of urban form in Portland and Toronto: implications for sustainability planning. Local Environment, 8(3), 317-336.

3. American Public Transportation Association. “Modern Streetcar Vehicle Guideline.” March 26, 2013.

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