The Great Streetcar Conspiracy

Streetcars are the latest urban planning fad, stimulated partly by the Obama administration's preference for funding transportation projects that promote "livability" (meaning living without automobiles), rather than mobility or cost-effective transportation, says Randal O'Toole, a senior fellow with the Cato Institute.

In anticipation of this change, numerous cities are preparing to apply for federal funds to build streetcar lines. However, the push for these expensive investments is more based on private interests and misleading arguments than sound public policy.

The real push for streetcars comes from engineering firms that stand to earn millions of dollars planning, designing and building streetcar lines. These companies and other streetcar advocates make two major arguments in favor of streetcar construction. The first argument is that streetcars promote economic development.

·         In support of this claim, streetcar advocates cite the experience of Portland, Oregon, where installation of a $103 million, four mile streetcar line supposedly resulted in $3.5 billion worth of new construction.

·         What they rarely mention, however, is that the city also gave developers hundreds of millions of dollars of infrastructure subsidies, tax breaks and other incentives to build in the streetcar corridor.

·         Almost no new development took place on portions of the streetcar route where developers received no additional subsidies.

The second argument is that streetcars are "quality transit," superior to buses in terms of capacities, potential to attract riders, operating costs and environmental quality.

·         In fact, a typical bus has more seats than a streetcar, and a bus route can move up to five times as many people per hour, in greater comfort, than a streetcar line.

·         Numerous private bus operators provide successful upscale bus service in both urban and intercity settings.

·         Streetcars cost roughly twice as much to operate, per vehicle mile, as buses, and also cost far more to build and maintain.

·         Streetcars are no more energy efficient than buses and, at least in regions that get most electricity from burning fossil fuels, the electricity powering streetcars produces as much or more greenhouse gases and other air emissions as buses.

Source: Randal O'Toole, "The Great Streetcar Conspiracy," Cato Institute, June 14, 2012.