NCPA - National Center for Policy Analysis

The Streetcar Fantasy

December 6, 2012

There are many myths surrounding the benefits a city can expect from streetcar lines. In reality, streetcars are an outdated mode of transportation that is unlikely to bring in any economic development, says Randal O'Toole, a senior fellow with the Cato Institute.

  • Streetcars only travel about 8 miles per hour.
  • Furthermore, they have fewer seats than buses, which leaves many riders standing.
  • As far as safety concerns, streetcars weigh over 60,000 pounds and gaps in the street create dangerous conditions for cyclists.
  • Additionally, streetcars are limited in transportation destinations, which require massive investment to expand streetcar lines.
  • However, it costs around $30 million per mile of rail line.

Advocates of the streetcar argue that operating costs are cheaper than buses. This is because a streetcar can move just as many people as a single bus driver can. However, according to the National Transit Database, the cost of operating one streetcar mile is three to four times higher than operating one bus mile. More importantly, the streetcar does not carry enough people each trip to make up for the costs. Indeed, it costs a lot to maintain streetcars -- $1 of maintenance for every $2 spent on operations.

Advocates also argue that the overall economic benefits derived from streetcars through development outweigh the other costs associated with operations and maintenance. However, in nearly every city that claimed economic development as a result of streetcars, many developers and businesses were offered lavish subsidies to promote the local economy. Take, for example, the experience of Portland, Oregon:

  • Officials claimed that the streetcar generated billions of dollars of economic development.
  • The streetcar served two neighborhoods of roughly equal size. One neighborhood received millions of dollars in subsidies for economic development while the other did not.
  • Predictably, the first neighborhood attracted as much as 75 times the investment the second neighborhood did, proving that it was the subsidies, not the streetcars, which were essential to economic development.

Lastly, proponents argue that streetcars will reduce dependence on automobiles and improve overall environmental conditions. But Portland, known as the most successful streetcar line in the nation, has seen a decline in Portland-area transit commuting because of the high costs of streetcars and cutbacks in bus services. Additionally, streetcars consume more energy than automobiles do. The average car, for example, consumes about 3,450 British thermal units (BTUs) per passenger mile whereas streetcars consume an average of 7,000 BTUs.

Source: Randal O'Toole, "The Streetcar Fantasy," Heartland Institute, November 2012.


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