The Economist explains: Why trams are a waste of money

STREETCARS—otherwise known as trolleys or trams—had their golden age around 100 years ago, carrying urban workers to nascent suburbs around Europe and America. But commuters had little love for these rickety, crowded electric trains, and by 1910 many were abandoning them for the convenience of cars or buses. Streetcars have been making a comeback, however, with new lines rumbling to life in at least 16 American cities, and dozens more in the works. Tucson, Arizona, inaugurated its new streetcar service in late July, and streetcar operators in Washington, DC, begin training this week—the city’s much-delayed service is expected to start later this year. But for all their nostalgic charm, streetcars are also increasingly controversial: a number of cities, such as San Antonio, Texas, are now rethinking their plans, complaining of high costs and limited public support. Critics grumble that streetcars gobble up scarce transit funds for a slow, silly service used mainly by tourists.

Fans say streetcars are great tools for creating jobs and sparking urban investment. Developers like them because they run on fixed tracks, ensuring an official commitment to a secure route. Many point to Portland, Oregon, which launched America’s first streetcar line with modern vehicles in 2001. The service has helped contribute $778m in local development, against a project cost of around $95m. Plans in Atlanta and Tucson have similarly generated hundreds of millions in private investment and raised neighbouring property values. In DC, the long-anticipated streetcar network is expected to inspire between $5 billion and $8 billion in development within ten years, according to a study last year by the DC Office of Planning. The pending line along H Street in the city’s north-east has already lured a number of chic new restaurants there in anticipation.

But for all this bullishness, there is no empirical link between streetcars and development. A 2010 survey of these systems in America by the Federal Transit Administration offered little evidence of concrete cause and effect. In the cities where streetcars have launched a wave of renewal, it is mainly because they are part of a larger, heavily subsidised development plan, with changes in zoning, improvements to streets and other benefits. Streetcars are also incredibly expensive to build and maintain, with huge up-front capital costs in laying down rails and buying cars. Tucson’s project ultimately cost nearly $200m and opened years late, in part because the city needed to clear utilities from under the tracks, install overhead electrical connections and repave much of the four-mile route. A 3.6-mile line in Cincinnati, Ohio, now under construction is expected to cost at least $133m. Federal grants have gone some way to help pay for these projects, but cash spent on streetcars displaces spending on other, more cost-effective forms of public transport like buses, which offer cheaper and more-efficient service but are considerably less sexy. The capital cost per mile of a streetcar is between $30m and $75m, while a rapid bus service costs anywhere between $3m and $30m, according to the American Public Transportation Association.

All this investment might make some sense if streetcars offered an efficient way to move people around. But here, too, the evidence is flimsy. Riders—and especially tourists—may find streetcars less intimidating than buses, but these vehicles tend to offer slow journeys across walkable distances. European tramlines tend to be fairly long and isolated from other traffic, which ensures a swifter journey. But in America streetcars travel shorter distances along rails that mix with other traffic, so streetcars invariably inch along. And while these tracks may be reassuring to developers, they make it impossible to navigate busy streets: buses can ride around obstacles but trams must stay put and wait. Indeed, their slow speeds and frequent stops mean they often add to congestion. This may not bother tourists keen on a novelty ride, but it is no solution to America’s public transport problems.

Dig deeper:
Why Americans do not ride trains (August 2013)
High speed rail has a bleak future in America (Feb 2014)
Why trams are less efficient than buses in Britain (April 2013)