OCTOBER 2007, ECONOMIX
The pixie dust of streetcars
BY ERIC
FRUITS
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THE CITY OF PORTLAND’S Central Eastside Urban Renewal
Area just celebrated its 21st birthday. With very little
development to show for more than two decades of renewal, the
city hopes a streetcar extension is the birthday present that
will bring the large-scale development that has eluded the area
for so long.
Portland is not alone in lavishing streetcars on its
languishing districts. Fresno, Calif.; Tucson, Ariz.;
Lancaster, Pa.; and dozens of other cities also hope that
development rides on rails. In Tampa, Fla., streetcar ridership
is down significantly from last year and the system is not just
losing money, it’s losing more money than expected. But
proponents point to a $450 million residential and retail
development in a once moribund neighborhood as a spillover
benefit that offsets the losses.
Many ascribe the development of Portland’s heralded
Pearl District to the streetcar. The district is a
24-hour-a-day hub of activity with residences, restaurants,
bars and shops. The district has been featured in The New York Times, The Wall Street Journal and
numerous travel magazines. Condos can sell for $1 million
or more.
What’s so magical about streetcars? One way to look at
the magic of rail is to ask whether streetcars are the bun or
the fries. It’s impossible to enjoy a burger without a
bun. On the other hand, a burger is just as good without the
french fries. But the fries make the meal complete. Do
streetcars make the meal or do they just make the meal more
complete?
The Pearl District’s success began with a few pioneering
developments that took advantage of historic building tax
abatements to convert warehouses into condos. The success of
these developments attracted other investments and development.
After these successes, an urban renewal area was created and
the streetcar opened a few years after that. In
Portland’s Pearl District, streetcars are a development
version of a burger and fries.
It’s impossible to find a clear-cut example where
streetcars are the bun. It’s impossible because
streetcars are always a part of a complex development package.
The packages usually include roadway improvements, tax
abatements, rezoning and environmental cleanup. In these cases,
it’s difficult to determine whether the streetcar system
is a catalyst that boosts development potential or a vital
linchpin without which development would be impossible.
Politicians and the planners they hire argue that streetcar
and other rail projects provide a magical opportunity to change
the zoning and uses of an area. They point to the condotopia
rising out of the banks of the Willamette River in
Portland’s South Waterfront urban renewal area, now
served by a streetcar and an aerial tram.
But private developers have had their eyes on South Waterfront
since the mid-1990s. Yet every single effort was shot down or
stifled by the city’s planning process. One development
didn’t follow a commissioner’s vision for an ideal
street pattern. Another development would have exceeded the
city’s maximum allowable building height at the time (35
feet, or about three stories). Now — as if by magic
— the aerial tram and streetcar have unlocked the
ability to construct buildings as tall as 32 stories.
But there is nothing magical about streetcars and trams. City
commissioners could have waved their zoning wands to
accommodate the private developers. If rail and tram
expenditures had been invested in roadway improvements, the
South Waterfront would be celebrating its 10th anniversary of
redevelopment instead of wading through its third year of
construction with no new roads in sight.
Streetcars and light rail cannibalize existing public
transportation. That’s because they tend to run in areas
already served by buses. To eliminate redundancies and, in
turn, boost rail ridership, transit agencies eliminate the bus
routes once the streetcar lines are open. The proposed Portland
eastside extension of the streetcar would go hand-in-hand with
eliminating parts of an existing bus line. Economically
speaking, rail is made more attractive by making the
alternatives less attractive.
Because they ride on rails, streetcars are inflexible.
Rerouting or expanding streetcar service requires
multi-million-dollar construction. Also, if a streetcar is
stuck on the line because of a breakdown or a traffic accident,
the streetcar system can be stopped or thrown into chaos.
Rail’s inflexibility has an upside, though. Property
owners and their tenants can be reasonably confident that
public transit will not be rerouted away from their property,
homes or businesses. Bus routes do not provide such a sense of
permanence. Many businesses in Portland have felt the pinch of
bus rerouting associated with construction on the city’s
main transit corridors.
It remains to be seen whether a streetcar line extension can
breathe life into Portland’s full-grown central eastside.
Large-scale rezoning to unlock development potential
doesn’t need a streetcar. Investments in road
improvements best serve the way the people actually travel,
rather than the way we wish they would travel. The streetcar
won’t do much without these other improvements. If the
burger fills you up, do you really need the fries?
Eric Fruits is a senior
economist at Portland consulting firm ECONorthwest and an
adjunct professor at Portland State University.
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