According to the city of Portland, the city’s streetcar line generated nearly $2.3 billion worth of development. They calculated this using a very simple methodology: they simply added up all the development that had taken place within three blocks of the streetcar line since the line had opened and attributed it to the streetcar.
As Tom Rubin says, that is like giving a rooster the credit when the sun comes up.
The city includes 85 specific developments on its list. Here are just a few:
- All new construction at Portland State University ($142.2 million), including a $7.5 million garage with nearly 1,200 parking spaces (349 new, 810 renovated).
- The new Whole Foods grocery store — which is built on top of a large parking garage.
- Station Place, an $18 million apartment building — and the $8.8 million parking garage that goes along with it.
- The $11 million renovation of the First Presbyterian Church — and the 170-space underground parking garage that goes with it.
- Benson Tower, including 150 parking spaces.
- The Crane Building, which converted its basement to 46 parking spaces.
- The Cronin Block, a $50 million townhome project with 335 parking spaces.
- Edge, a $27 million mixed-use project with three parking lots, one underground.
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Most of this stuff would happened without the streetcar (does anyone think the University would have faded away were it not for the streetcar?). Some of it is double counted: Portland sometimes credits OHSU’s $103.5 million South Waterfront office building (with 650 underground parking spaces) to the streetcar, and sometimes to the aerial tramsway. Hardly any of it is “transit oriented”: most of these developments have plenty of parking.
Still, there has been a bunch of new development. What role did the streetcar play? Answer: Not much. As shown on the map below, almost all of downtown Portland and surrounding neighborhoods is in one or another urban-renewal district (click on the map to download a larger PDF version). (West is the top of the map and north is to the right.)
Portland’s streetcar starts on Northwest 23rd, heads east on Marshall/Northrup, and enters the River District(which includes what is popularly known as the Pearl District) at 16th Avenue. The streetcar turns south on 10th and 11th, passing itn the South Park Blocks district when it crosses Burnside, and then turns east on Hall/Montgomery. After a couple of twists, it enters the North Macadam district (which includes the area more often known as the South Waterfront district) at 4th and Harrison. Notice that the North Macadam district has conveniently been extended up Harrison on a one-street-wide finger from 1st through 4th so they could spend North Macadam urban-renewal money on the streetcar.
In short, except for the first seven blocks, the entire streetcar route is in an urban-renewal district.
According to page 3 of the Portland’s Urban Renewal History Appendix, the city issued around $234 million worth of bonds to subsidize this district. These bonds would be repaid by the “incremental” property taxes paid by properties in the district, which means that other Portlanders would have to pay for the police, fire, library, schools, and other services used by occupants of the district. The city also added some federal grants to the pot.
All this money was spent on such things as buying land (to be resold to developers at a loss with the understanding that the developers would build high-density, mixed-use developments), subsidizing housing, building parking, providing parks, and other infrastructure. Some of the money was also spent removing a Broadway Bridge off ramp to free up land for the district. The city also tore out a bunch of railroad tracks next to Union Station — tracks that Amtrak said it would need if it ever expanded service to Portland — so it could build more condos. None of this money went to the streetcar.
Page 1 of the Urban Renewal History Appendix says that the city sold $144 million worth of bonds for the South Park Blocks district. This money is going to historic renovation, subsidies to housing developments, and parks. In addition, about $7.5 million of this money went to the construction of the initial streetcar line.
The urban-renewal plan for the North Macadam (South Waterfront) district is even more expensive, calling for the sale of $289 million worth of bonds. Many of the things funded by these bonds, such as the aerial tram, have gone over budget, but so far Portland has not decided to sell any more bonds. About $12.2 million of this went to extend the streetcar line into the South Waterfront area.
Between these three districts, we have more than $665 million worth of subsidies. The streetcar accounts for less than 3.0 percent of this. In addition, part of the North Macadam district used to be in the Downtown Waterfront district, which received $165 million of tax-increment financing. Some of that money went into RiverPlace, now in the North Macadam district, and the streetcar report counts new developments in Riverplace among those supposedly generated by the streetcar.
These are just the subsidies from tax-increment financing, which is the largest source of funds for Portland’s urban-renewal agency, the Portland Development Commission (PDC). But according to PDC’s budget, the agency also gets money from federal grants, property sales, rents, and other “program income.” These sources account for $35 to $40 million per year in additional funds that can be used to subsidize urban renewal.
The subsidies don’t stop there. As Jim Karlock has documented, many of the residential buildings on the streetcar line have had their property taxes waived for ten years or more. Karlock says that at least $163 million of “core-area multi-unit” housing has been exempted from taxes.
Improvements to many “historic properties” have also been exempted from property taxes for fifteen years. It is quite likely that this includes most of the renovations in the city’s list of streetcar-generated developments.
I expect to soon do a detailed search of both the historic property and multi-family housing lists. But a quick comparison reveals that many the city’s streetcar-stimulated properties are on the Jim’s list of tax-exempt properties. These include the properties on River Parkway, the Pearl Court Apartments and Pearl Townhomes, and the Streetcar Lofts. Jim’s lists are from 2003, so many of the newer developments won’t show up on them.
So we have multiple subsidies going to most or all of the properties on the city’s list of streetcar developments. Which do you think played the most important role? The $665-million-plus spent on below-market land sales, parking garages, and other infrastructure? The ten to fifteen years of property tax waivers? Or a piddly-dink, 7-mph streetcar line? And if you still think the streetcar line made such a difference, then why did developers build thousands of new parking spaces along the line?
“According to the city of Portland, the city’s streetcar line generated nearly $2.3 billion worth of development.”
Can you direct us to the page that contains that claim? I read through the link you provided, and at no point does it suggest that streetcar alone generated the development, which is the clear implication of your posting here. Instead, they make quite clear at the outset that streetcar is “at the heart of a new approach to shaping cities that promotes investment at the City’s core, provides homes for people of diverse income groups and supports the urban amenities that make great cities great.”
They gladly offer that it is not the sole driver of investment, and that it is indeed part of an amenity package, and not a stand-alone transportation benefit. Further, they are more than forthcoming with their parking numbers as well as their unit numbers, which you have omitted. The mark of successful TOD is not the absence of parking need, it is the REDUCTION of parking need, which they have certainly achieved in most of the developments abutting streetcar. Nowhere do they claim that streetcar eliminates the need for parking, and you cannot show me a reputable transit advocate that uses that standard for TOD. The city states clearly that the streetcar neighborhoods have achieved LOWER parking ratios than anywhere else in the region. They are correct. Your claim that these buildings have “plenty or parking” is a laugh. It’s plenty for a TOD, but try serving 143 suburban housing units with 150 parking spaces and see if they think that’s “plenty.”
In case after case, rather than refute their point with fact, you imply that they have made a different point; one that’s easier to defeat.
That. is. pathetic.
DE:
I am glad you took the time to carefully read Portland’s report. Unfortunately, few people do. As a result, popular reports of the streetcar routinely claim that the streetcar — and exclusively the streetcar — attracted billions in development.
For example, USA Today says: “It attracted about 100 projects worth $2.3 billion.”
The Indianapolis Star says, “a new streetcar system in Portland attracted 7,248 housing units and 4.6 million square feet of office space as part of $2.3 billion in private investment.”
And the Grand Rapids Press says, “Portland city leaders say more than 100 development projects — worth more than $2 billion — have sprouted along its line since it started developing the nation’s first modern streetcar system.”
These erroneous statements are not the results of sloppy reporting. They are the results of false claims by Portland officials (and former Portland officials) who are deliberately overstating the case for spending peoples’ money on streetcars.
For example, former Portland city commissioner Charles Hales says, “The $55 million streetcar line has sparked more than $1.5 billion (and growing) in new development.” Hales is traveling around the country trying to sell streetcars for HDR, a consulting firm.
And a Michigan smart-growth web site quotes Portland developer Homer Williams (who received many of the subsidies I describe in this report) saying, “Look at all the cranes in the city. Outside of two or three exceptions, it’s all because of the streetcar.”
Previously on this blog, I have stated that such claims are wrong. Various commenters have asked me to prove it, so I did. I did not set up a straw man: I refuted the claim that streetcar advocates are making over and over again and that journalists and officials from other cities are repeating as fact.
As for the reduction of parking need in TODs, my point is not that TODs should need no parking but that it is silly to claim that developers spent millions on parking lots because of the streetcar.
I agree that there is an enormous amount of irresponsible hyperbole in favor of TOD and streetcar, but the second highest burden of responsibility after the public servant is on the watchdog to be accurate, and if I were a reporter lazily reading your critique, I would have re-written your assertions about the report in error.
On the parking issue, I think if there’s anything we can agree on, it’s that multi-modal TOD, that relies on streetcar to reduce the land used for but provides for parking, is the only responsible kind. It provides transportation choice {the option to use a car when needed), which anti-planners consistently needle planners over.
I’m curious as to your thoughts, then, that if the streetcars were not a significant contributor to the development dollars flowing in, aside from the incentives, what else would make people move into the new projects if not for the amenities which I would consider the streetcars to be one of?
Columbus Ohio is considering (and referencing Portland’s system) a streetcar system in hopes of stimulating development. As an urban dweller, I’m very keen on the idea. As a citizen first, I’d like to have the streetcar to augment my ability to reliably get around without my car. It’s about additional transportation options as far as I am concerned. The proposed goal here is to have the streetcars coming by the stops every 5-10 minutes…an interval that anyone can deal with as opposed to a historically unpredictable bus system.
So bottom line, what would you say, streetcars as a catalyst for development, yea or nea?
DE,
I have no problem with multimodal TOD if it is built for the market. I only object to subsidies, prescriptive zoning, and land-use rules that drive up the cost of other forms of housing.
RetroMetroLTD,
Columbus can run buses every 5 to 10 minutes and save the tens of millions of dollars needed to build a streetcar line. The buses can probably operate on faster schedules than the streetcar too. The idea that there is some value to having the additional option of rail makes no more sense than to say everyone should have the option (at taxpayers’ expense) of owning a Ferrari in addition to their Ford or Toyota.
Streetcars are not a catalyst for development. At best, they are a catalyst for more subsidies for development. If there are many people in Columbus like you who want to live in a pedestrian-friendly and transit-oriented area, then the city won’t need to subsidize such development.
“they are a catalyst for more subsidies”
This is so true. In Portland we spent a fortune on a convention center. When it failed they said, we need to “leverage/protect” our investment so we spent another fortune doubling its size. Now it is still failing so we there are calls for government to build a big hotel next door since we have this huge “investment”. Rail is a similar circular “investment” scheme.
“In Portland we spent a fortune on a convention center. When it failed they said…Now it is still failing”
How did you come to this conclusion?
Portland Streetcar carries this claim in a their booklet “Portland Streetcar Development Oriented Transit†. It includes a list of projects.
It seems that the streetcar started operation on July 20, 2001(page 2) and caused development starting in 1997 with the completion of the McKenzie Lofts (page 11).
See: http://www.portlandstreetcar.org/pdf/development.pdf
There is simple expression for such claims: Bull Sh*t.
But what else would you expect from city planners?
Thanks
JK
It seems that the streetcar started operation on July 20, 2001…and caused development starting in 1997 with the completion of the McKenzie Lofts (page 11…There is [a] simple expression for such claims: Bull Sh*t. But what else would you expect from city planners?
[ties both hands behind back]
My.
The monorail in Seattle caused mixed-use development at the Junction in West Seattle, even though the monorail never got built there.
Golly, you may ask, however on earth did that happen?
It’s called speculation.
It’s really not that hard to grasp.
No, really. It’s not hard.
[/ties both hands behind back]
DS
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