A rendering of Portland's South Waterfront neighborhood (currently under construction)
UPDATE 2/8/2011: For an excellent, detailed analysis of the specific economic benefits derived from a streetcar, see the Los Angeles Streetcar's economic impact study.
With dozens of cities as diverse as Los Angeles, Washington D.C., Dallas, Atlanta, and Cincinnati pursuing streetcars as engines of economic revitalization and smart growth, the 2010s could (once again) be the decade of streetcars in America. The impetus for America’s renewed interest in streetcars lies in the overwhelming success of the Portland and Seattle Streetcars in serving as development-oriented transit. This short essay will synthesize the quantitative results of the streetcars in stimulating new development, generating new jobs, and creating new retail destinations.
Streetcars serve as a powerful marketing tool for stimulating development and revitalizing previously economically-depressed neighborhoods. Unlike buses, streetcars have had a measurable impact on property values due to their permanence, connectivity, and marketability. In Portland, property values have increased ten-fold in many previously depressed areas along the line as properties along the streetcar become more desirable to build upon.[i] Because of this significant financial return, property owners in Portland paid 25% of the costs of constructing the Portland Streetcar, while property owners in Seattle paid 50% of total capital costs.[ii],[iii]
With dozens of cities as diverse as Los Angeles, Washington D.C., Dallas, Atlanta, and Cincinnati pursuing streetcars as engines of economic revitalization and smart growth, the 2010s could (once again) be the decade of streetcars in America. The impetus for America’s renewed interest in streetcars lies in the overwhelming success of the Portland and Seattle Streetcars in serving as development-oriented transit. This short essay will synthesize the quantitative results of the streetcars in stimulating new development, generating new jobs, and creating new retail destinations.
Streetcars serve as a powerful marketing tool for stimulating development and revitalizing previously economically-depressed neighborhoods. Unlike buses, streetcars have had a measurable impact on property values due to their permanence, connectivity, and marketability. In Portland, property values have increased ten-fold in many previously depressed areas along the line as properties along the streetcar become more desirable to build upon.[i] Because of this significant financial return, property owners in Portland paid 25% of the costs of constructing the Portland Streetcar, while property owners in Seattle paid 50% of total capital costs.[ii],[iii]
The increase in property values along the Portland and Seattle streetcars have gone hand in hand with an increase in development along the streetcar lines. More than half of all new development over the past decade in Downtown Portland has occurred within one block of the Portland Streetcar, an area which previously accounted for less than 20% of total development.[iv] Development along the streetcar line have also been denser than those not on the line: development within one block of the Portland Streetcar has utilized nearly 90% of its allowable floor area-ratio (FAR), compared with an average of under 30% pre-streetcar and 40% for non-streetcar-oriented development in Downtown Portland.[v] The best example for demonstrating the transformative impact of streetcars to stimulate new development is Portland’s South Waterfront neighborhood: what was once an isolated industrial wasteland physically cut off from Downtown by multiple freeways is fast becoming Portland’s densest neighborhood due to the streetcar, with multiple towers above 30 stories under construction. When fully built out, the South Waterfront will be home to 5,000 residents and 10,000 jobs, figures simply not possible without the permanence, connectivity, and marketability brought by the Portland Streetcar.[vi]
The total development impact of the Portland and Seattle streetcars has been staggering. Between 1997 and 2008, the Portland Streetcar attracted over $3.5 billion in investment within three blocks of the line, translating to over 10,000 housing units and 5.4 million square feet of commercial space.[vii] Seattle’s South Lake Union Streetcar has achieved similar success over the last eight years in spite of the recession: 2.4 billion in investment occurred within roughly three blocks of the streetcar line, amounting to 2,500 housing units and 12,500 jobs (including 8,000 jobs from the new headquarters of Amazon.com).[viii] 16,000 construction jobs have also resulting from streetcar-oriented development over the past six years.[ix] Moreover, this development reduced emissions dramatically: in Portland, greenhouse gas emissions from residential development is approximately 65% less compared with suburban households, while emissions from commercial development is approximately 45% less.[x]
The total development impact of the Portland and Seattle streetcars has been staggering. Between 1997 and 2008, the Portland Streetcar attracted over $3.5 billion in investment within three blocks of the line, translating to over 10,000 housing units and 5.4 million square feet of commercial space.[vii] Seattle’s South Lake Union Streetcar has achieved similar success over the last eight years in spite of the recession: 2.4 billion in investment occurred within roughly three blocks of the streetcar line, amounting to 2,500 housing units and 12,500 jobs (including 8,000 jobs from the new headquarters of Amazon.com).[viii] 16,000 construction jobs have also resulting from streetcar-oriented development over the past six years.[ix] Moreover, this development reduced emissions dramatically: in Portland, greenhouse gas emissions from residential development is approximately 65% less compared with suburban households, while emissions from commercial development is approximately 45% less.[x]
Seattle's South Lake Union Streetcar has attracted $2.4 billion in investment over the past eight years.
Apart from its ability as development-oriented transit, one of the most remarkable impacts of streetcars in Portland and Seattle has been their impact on retail development. By increasing mobility as “pedestrian accelerators,” streetcars have dramatically enhanced pedestrian activity and led to significant expansion in retail activity. Whereas the Pearl District was once isolated from Portland’s bustling Downtown and region-wide transportation system, the Portland Streetcar created a strong connection and dramatically increased pedestrian traffic for the district. Michael Powell, owner of Powell’s books, illustrated this transformation by counting pedestrian traffic before and after the streetcar was built in front of his shop: in 2001, Powell counted an average of only three pedestrians per hour, while in 2008, Powell counted 938/hr.[xi]
The development of the Pearl District as a retail destination mirrors the dramatic increase in pedestrian traffic which the Portland Streetcar helped to initiate. In 2001, when the Portland Streetcar first opened, the entire Pearl District had less than ten retail shops. By 2008, this number had burgeoned to over 400, 90% of which were independent and locally owned.[xii] The majority of these shops line 10th and 11th Streets along the Portland Streetcar. People from across the Portland region flock to the Pearl District for its unique shopping experience—one that is unlike any other in the region.
Over the past decade, streetcars in Portland and Seattle have proven themselves as a tool of economic development by stimulating new residential and commercial construction, generating new jobs, and creating new retail destinations. While numerous factors affect economic development beyond simply constructing a streetcar, the evidence in Portland and Seattle suggests a strong relationship between streetcars and economic development. When partnered with the appropriate policies to encourage transit-oriented development and attract businesses, streetcars yield an extremely high return upon their initial investment and can help to transform economically depressed areas into vibrant, prosperous urban neighborhoods.
The development of the Pearl District as a retail destination mirrors the dramatic increase in pedestrian traffic which the Portland Streetcar helped to initiate. In 2001, when the Portland Streetcar first opened, the entire Pearl District had less than ten retail shops. By 2008, this number had burgeoned to over 400, 90% of which were independent and locally owned.[xii] The majority of these shops line 10th and 11th Streets along the Portland Streetcar. People from across the Portland region flock to the Pearl District for its unique shopping experience—one that is unlike any other in the region.
Over the past decade, streetcars in Portland and Seattle have proven themselves as a tool of economic development by stimulating new residential and commercial construction, generating new jobs, and creating new retail destinations. While numerous factors affect economic development beyond simply constructing a streetcar, the evidence in Portland and Seattle suggests a strong relationship between streetcars and economic development. When partnered with the appropriate policies to encourage transit-oriented development and attract businesses, streetcars yield an extremely high return upon their initial investment and can help to transform economically depressed areas into vibrant, prosperous urban neighborhoods.
References:
[i] Street Smart: Streetcars and Cities in the 21st Century. Reconnecting America, 2009.
[ii] Portland Streetcar Inc.
[iii] Seattle Department of Transportation
[iv] Streetcar-Development Linkage: The Portland Streetcar Loop. E.D. Hovee & Associates, 2008.
[v] Streetcar-Development Linkage: The Portland Streetcar Loop. E.D. Hovee & Associates, 2008.
[vi] Street Smart: Streetcars and Cities in the 21st Century. Reconnecting America, 2009.
[vii] Portland Streetcar Inc.
[viii] South Lake Union Investment Analysis. Seattle DOT, 2009.
[ix] South Lake Union Investment Analysis. Seattle DOT, 2009.
[x] Streetcar-Development Linkage: The Portland Streetcar Loop. E.D. Hovee & Associates, 2008.
[xi] Street Smart: Streetcars and Cities in the 21st Century. Reconnecting America, 2009.
[xii] Portland Streetcar Inc.
[i] Street Smart: Streetcars and Cities in the 21st Century. Reconnecting America, 2009.
[ii] Portland Streetcar Inc.
[iii] Seattle Department of Transportation
[iv] Streetcar-Development Linkage: The Portland Streetcar Loop. E.D. Hovee & Associates, 2008.
[v] Streetcar-Development Linkage: The Portland Streetcar Loop. E.D. Hovee & Associates, 2008.
[vi] Street Smart: Streetcars and Cities in the 21st Century. Reconnecting America, 2009.
[vii] Portland Streetcar Inc.
[viii] South Lake Union Investment Analysis. Seattle DOT, 2009.
[ix] South Lake Union Investment Analysis. Seattle DOT, 2009.
[x] Streetcar-Development Linkage: The Portland Streetcar Loop. E.D. Hovee & Associates, 2008.
[xi] Street Smart: Streetcars and Cities in the 21st Century. Reconnecting America, 2009.
[xii] Portland Streetcar Inc.
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