Streetcars Power Economic Development

Question: When is a streetcar more than a streetcar?

Answer: When it is also a mechanism for economic development! 

Streetcars are making a comeback in the United States for a variety of reasons: federal funding is supporting development, they have an emotional allure and provoke a bit of nostalgia, and they have the potential to be drivers of economic growth.

Proponents of streetcars point out that they are quiet, run on electricity, and typically generate less noise than their public transit counterparts. They also provide a smooth ride, can carry a lot of riders per car, and are typically easily accessible by people with disabilities. Some critics, however, dismiss streetcars as nothing more than buses on tracks. They complain that, unlike buses, streetcars require a substantial infrastructure investment and that they are completely inflexible when it comes to route planning. But that is what makes streetcars so appealing to developers – they are permanent. And that permanence signals to developers that a community is making an investment on which they can rely. According to an article on, streetcars are “ostensibly a transit mode, and one that critics assail as a very expensive way of moving people around at low speeds. But at its essence, the streetcar is a city-building tool – and by most accounts a very successful one.”

Vice president of RATP Dev USA - Rail, Steve Bethel explains, “People invest in things that are permanent. A bus system can set up a route in your neighborhood and that can change at any time. It’s all based on ridership. But when you build a rail system, the rails are in the ground, the stations don’t move, the infrastructure is permanent. Developers can know that for many years to come that the streetcar will help people travel throughout that neighborhood.”

Steve should know. That is been his experience with Tucson’s Sunlink Streetcar. “Downtown came alive right away when the streetcar was getting close to going into revenue service. There are 50 brand new bars and restaurants along the alignment mainly in the downtown area. We’ve got our first new hotel downtown in 25 years. There’s a grocery store, lots of residential and retail buildings, and it’s continuing. In fact, according to Steve, the initial $196 million-dollar infrastructure investment in Tucson has produced $1.5 billion dollars in public and private investment along the streetcar route. Likewise, the general manager of DC Streetcar, Keith Jones says his system has successfully encouraged economic development and affordable housing options along streetcar corridors. In fact, a study predicts that in the next decade, the DC Streetcar will trigger between $5 and $8 billion dollars in development.

Ultimately, streetcars are both a means of transit and a means of promoting the economic wellbeing of a community. As wrote: “If the sole goal is to move people, then a bus might be the best option. If the goal is more complex and involves mobility, quality of life, revitalization, positioning and branding, and economic development –knowing that the combination of these elements is different for every city – then consider the streetcar.”

In a November 2018 study, the Mineta Transportation Institute reached a similar conclusion. The Institute determined that streetcars can have a positive economic impact on a community particularly if the system is popular with the public. The authors concluded that “the more effective a streetcar is as a transportation service, and the more widely used it is by patrons, the more likely it is to have development effects. Simultaneously, a streetcar alone is not a guarantee of positive outcomes, as other factors such as a healthy real estate market, land availability, and development-supportive zoning and other policies also need to be present.”

In the end, it’s important to remember that streetcars are not just about mobility. As wrote: “While streetcars do serve a mobility function, their true differentiator is the impact they can have on quality of life and economic development.” Streetcars can be an important part of a community’s development and planning goals. And while they are not the lone drivers of economic growth, their presence as a permanent mode of transit in a community can help stimulate investment and opportunity!




Molly Lepine