Austin, don’t ignore warning: The Great Streetcar Conspiracy

COST Commentary: Below is the Executive Summary and Conclusion of a paper by Randal O’Toole. You may click on the title to access the entire report or to download it. While the Policy Analysis is primarily about “modern streetcars,” many of the findings also apply to urban light rail which is being planned in Austin.

Page 14 of O’Toole’s analysis has a short comment on Austin’s rail plan. A report on Austin’s urban rail in 2008 was titled: Modern Streetcar/LRT Proposal implying a hybrid streetcar-light rail (LRT) concept. This Austin concept grew from a rail system estimated to cost $200-$250 million in 2006 to a system estimated to cost about $1.7 billion today. It will clearly cost much more in capital and its annual operating costs will be several tens of millions. Austin’s concept still has many of the characteristics of a “modern streetcar.” A major portion of it runs slowly on downtown’s busy streets mingling with people and cars, creating major safety hazards and congestion. Heavy trains cannot stop quickly or swerve to avoid accidents.

This is an outstanding paper by O’Toole. He takes the reader briefly through historical myths and realities which have led to many of today’s transit inefficiencies and overall mobility degradation by wastefully spending many tens of billions to serve very few people while ignoring high priority, proven mobility improvements which enhance quality-of-life for the vast majority of citizens.

He addresses myths and truths in key subjects including:

1. History of streetcars and the reason their outdated technology was superseded by superior technology.

2. The US government’s complicity in transportation’s misguided direction, in many cities, which is encouraged by eliminating ‘cost-effectiveness’ as a criteria for government funding participation. The new major government funding criteria is “livability” which has no real definition and the exact opposite is achieved with outdated, ineffective train systems. Perhaps the most negative impact is to those citizens needing transit in their daily live and have no alternative as they face rapidly increasing fares and reduced bus service.

3. The long history of failure in the first modern US streetcar system, implemented in Portland, Oregon. See several articles regarding the failures of rail transit in Portland on the COST web site.

4. A section of the paper titled “The Economic Development Hoax” reveals the myth that new development is driven by the implementation of exorbitantly expensive rail systems instead of massive taxpayer subsidies which local, often self-serving and conflicted, politicians provide developers.

From the paper: “Downtown Portland’s revitalization owes more to the microbrewery revolution, which started in Portland in 1980, than to mass transit.” In Austin’s case: It is one of the fastest growing cities in the nation and not one single development is due to an urban rail system.

5. The myth that rail transit is a significant contributor to higher population density.

6. The myth that rail is a significant contributor to job growth in the region. A quote from the paper: “The impact of the 6.5-7 mile-per-hour Portland streetcar on jobs has been, at best, nil.” and “Downtown jobs recovered by 2010 to 87,038, but this was just0.3 percent more than in 2001 despite a 14 percent increase in the region’s population to more than 1.8 million.”

7. The myth that rail systems have greater capacity and positive impacts on congestion.

8. The myth that streetcar operating costs are lower with lower energy consumption and less air pollution than buses.

One of my favorite paragraphs, among many, in O’Toole’s paper is:

“Building streetcars in cities today is analogous to asking businesses to supplement their computers with manual typewriters and adding machines or asking consumers to add crystal radios to their high-definition television/entertainment centers. While such options exist, they are slow, clumsy, inconvenient, and appeal to only a small number of people.”

I realize some younger citizens may not know what manual typewriters or crystal radios are, but more senior folks will relate to the analogies.

The Great Streetcar Conspiracy

by Randal O’Toole, CATO Institute Policy Analysis No. 699, June 14, 2012

Executive Summary

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. Toward that end, the administration wants to eliminate cost-effectiveness requirements for federal transportation grants, instead allowing non-cost-effective grants for projects promoting so-called livability. In anticipation of this change, numerous cities are preparing to apply for federal funds to build streetcar lines.

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. This claim is largely based on the experience of Portland, Oregon, where installation of a $103-million, 4-mile streetcar line supposedly resulted in $3.5 billion worth of new construction.

What streetcar advocates rarely if ever mention 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. They 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.

Based on 19th-century technology, the streetcar has no place in American cities today except when it functions as part of a completely self-supporting tourist line. Instead of subsidizing streetcars, cities should concentrate on basic — and modern — services such as fixing streets, coordinating traffic signals, and improving roadway safety.

The full 16 page report can be found on the CATO web site.


Transit advocates who believe streetcars offer a “quality” alternative to buses are fooling themselves. Their low average speeds, limited number of seats, and inflexibility make streetcars inferior to buses in every respect except in their ability to consume large amounts of taxpayer money. City officials who believe that streetcars alone will revitalize blighted parts of their urban areas have been deceived by smooth-talking consultants and dissembling politicians who were foolish enough to build streetcars in their cities. Cities with a billion dollars or so to burn could spend $100 million on a streetcar line, support it with $900 million in other subsidies to developers, and still not get the success of Portland’s Pearl District unless they do it in an area that is already rapidly growing.

Streetcars are a long-obsolete technology. Cities that wish to revitalize neighborhoods would do better to invest in modern transportation, including repairing their streets, installing the latest traffic signal coordination systems, and improving safety for all travelers.


Randal O’Toole is a senior fellow with the Cato Institute and author of The Best-Laid Plans: How Government Planning Harms Your Quality of Life, Your Pocketbook, and Your Future.

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