“Streetcar Drives Development”―Portland’s Urban Legend

By Dr. Eric Fruits, Ph.D.

For much of human history, mass transit has had the utilitarian goal of quickly moving people from place to place. Even Portland’s early streetcars were designed with speed in mind.

Advertisements touted how quickly people could get around by streetcar. One ad from 1920 boasted that University Park in North Portland was only 20 minutes from downtown by streetcar. That works out to a speed of more than 15 miles an hour.

Times have changed. Modern streetcars have become the pleasure boats of public transit: flashy, expensive, and slow.

Today, Portland’s streetcars quietly glide through the streetscape at a leisurely pace. Portland’s new Central Loop covers 3.3 miles in about an hour and a half. At 2.5 miles an hour, that’s slower than most people walk.

If streetcars don’t improve transit times, then what do streetcars do?

Many ascribe the development of Portland’s heralded Pearl District to the streetcar. In truth the streetcar was more of an afterthought. The Pearl’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 pioneering developments attracted other investments and more developments.

After these successes, an urban renewal area was created, and the streetcar came along a few years after the birth of the urban renewal area. Development made the streetcar possible, not the other way around.

It’s impossible to find a clear-cut example of where streetcars are the single factor driving development. It’s impossible because streetcars are always just one part of a complex development package. The packages can include roadway improvements, tax abatements, rezoning and environmental cleanup. There is no way to determine whether a streetcar system is just one of many factors that boost development potential or is a vital linchpin without which development would be impossible.

Supporters argue that streetcars and other rail projects provide a magic key that unlocks zoning and uses of an area. They point to the “condotopia” that grew 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.

As early as the mid-1990s, however, private developers had their eyes on Portland’s South Waterfront. Yet, every single effort was shot down or stifled by the city’s planning process. One development didn’t follow a city 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).

Even so, Portland’s planning class continues to argue that the aerial tram and streetcar have magically unlocked the ability to build waterfront skyscrapers.

In reality, there is nothing magical about streetcars and trams. City commissioners held—and still hold—the keys to unlock an area’s development potential. If rail and tram expenditures had been invested in roadway improvements, the South Waterfront would be celebrating its 15th anniversary of redevelopment instead of suffering round after round of fire sale condo auctions.

It remains to be seen whether the streetcar’s Central Loop can breathe life into Portland’s Central Eastside, Convention Center, and Lloyd District. Large-scale rezoning to unlock development potential doesn’t need a streetcar. Investments in roadway improvements best serve the way the people actually travel, rather than the way we wish they would travel.

A streetcar by itself does nothing without these other key improvements.

Eric Fruits, Ph.D. is a Portland economist and an adjunct professor at Portland State University. He is a guest contributor at Cascade Policy Institute. This article originally appeared in The Portland Tribune.

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  • Rupert in Springfield

    I always thought Portland’s streetcars were just a generally accepted money laundering scheme from the taxpayers to United Streetcar. These folks make street cars so expensive that the prospective riders could be offered their choice of a Rolls Royce or Maserati at lower expense. I had no idea anyone out there was really trying to make the case they actually did anything beyond accomplish this money transfer. If so, it is another case of the argument supporting a government rip off scheme being so completely ludicrous its kind of fascinating in its pathology.

  • Bob Clark

    One of the interesting things about central city Portland is there are certain synergies created by having folks working and living close together. At the same time, Portland wastes an awful lot of this benefit, maybe even more than the benefit itself. Then too it’s hard to discern the large amount of waste other than the City’s growing indebtedness and desperate grab for more tax dollars. The City seems propped up by federal and state dollars pumped into high end light rail and street car projects. Also, Portland receives a disproportionate share of government transfer payments, as the poverty ratio relative to the rest of the state is high when compared to other Urban areas on the West coast and nationally.

    I just have to believe Portland city proper is increasingly fragile as were the federal and state government transfer payments to become frozen or decreased, the city would lose the ability to repay its debts and retain businesses and population. As it is now, METRO has served to restrict population outflow from the city; and you see most mass transit is routed through the city of Portland. Portland city seems quite contrived and fragile to loss of state, federal and Metro strength. In essence, Portland has not been fully tested by market forces but allowed to live in an artificial cocoon for several decades now (since Goldschmidt’s downtown artifice creation just after the mass exodus of families to the burbs).

  • raven6

    Gentlemen–While you were chatting Portland became a full blown signer
    of the Agenda 21 program from the U.N. This program, is intended over time to remove the auto, force rail and bike use. They invision 20 minute cities, all food grown within 100 miles, stack and pack housing with no parking. These buildings they already have. The 2008-2009 climate action plan includes many rather draconian steps. While I always see your postings Bob and Rupert, and learn from them, realize this, the Sustainable Development plan your city is pumping out, is intended to eventually remove private property and push people into the cities. If you are up to the challenge of gaining more understanding, I would be most happy to provide you more. If willing, comment back here and we can have the editor connect us. In any case, enjoy your posts.

  • oregongrown

    Our government leaders have been trying to convince us for decades that if we build “it” then development will come; except that’s not true.

    They claim that the light (slow) rail would spawn development. Did it? No it did not. And who wants to live in those houses near the Max line? Anyone? No, didn’t think so.

    And what astonishes me about these billions put into slow rail and even slower, walking-speed, streetcars is that they are SO SLOW. It’s like taking a trip back in time. But we are paying top dollar for something that might have been a good deal in the last century, not this one. And Portland streets are becoming worse everyday. Our cars bump along the hammered streets and our taxes pay for nothing but light rail.

    But mostly it is giant egos, like Neil Goldschmidt, and city leaders like Sam Adams that are so enamored of themselves they have forgotten how to lead because they are most concerned with their legacy and their soundbites. Light rail became cool and that’s about all the criteria Portland leaders needed; it’s not practical or efficient, but they don’t admit that.

    When I see the deteriorationn of Portland with forced infill, apartments with no parking, millions in lightrail and now no money for buses, gluttonous schools taxing us from our homes, just about any surrounding suburb is looking real good. Let alone another state.

    Portland has lost it’s luster but you will never get any leader to admit that they are taxing us out of existence for their failed agenda. Too much ego to ever listen to the people they supposedly represent.

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