- Streetcar benefits include more jobs, more tax revenue than enhanced bus service
- Streetcar ROI far exceeds estimated capital cost
- Much greater economic return than enhanced bus
ARLINGTON, Va. – A new study of the Columbia Pike streetcar's projected return on investment shows a multi-billion dollar benefit to Arlington and Fairfax Counties, far surpassing the project's estimated capital cost. The economic return for streetcar also would greatly exceed the amount generated by enhanced bus service. The new analysis, released today, will be used by Arlington County as it updates its Capital Improvement Plan and streetcar project financial plan.
$2.2 billion to $3 billion more than enhanced bus over 30 years
Completed by HR&A Advisors, Inc., the comparative return on investment study estimates the Columbia Pike streetcar will generate between $3.2 billion and $4.4 billion in incremental benefits for the two Counties, over and above capital and operating costs, during a 30-year timeframe. This is $2.2 billion to $3 billion more than would be generated by enhanced bus service. The benefits from streetcar derive from property value increases and faster and more expansive development. HR&A found that streetcars and comparable systems in the United States have, with few exceptions, facilitated more transit-oriented development than enhanced bus transit.
“We selected the streetcar because it will provide transit capacity for the County's long-term growth and sustainability, maintaining our economic competitiveness and helping to create the next chapter in our transit-oriented success story,” said Arlington County Board Chair Jay Fisette. “This study further demonstrates that streetcar is the right investment for Arlington.”
Arlington retained HR&A in September 2013 to update the analysis of the streetcar's projected return on investment and compare it to enhanced bus service, which would use larger buses and have some service features similar to a streetcar. The firm analyzed the ability of both streetcar and enhanced bus to facilitate the development goals called for in the Arlington County-adopted Columbia Pike Neighborhoods Area Plan. HR&A conducted extensive research and data analysis regarding other cities' experiences with streetcar and bus alternatives, assessed local real estate conditions, and interviewed developers and retailers.
Streetcar benefits include more jobs, more tax revenue
Over a 30-year period, HR&A estimates investment in streetcar and the resulting real estate impacts will generate between $375 million and $735 million in incremental tax revenues for Arlington. This is more than three times the amount generated by enhanced bus service, because HR&A projects streetcar service will help Arlington attract a more substantial share of new economic activity in the region.
Approximately 10 years after the beginning of construction, streetcar also would attract 6,600 new jobs to the corridor over the number that would exist under baseline conditions – more than three times the incremental employment supported by enhanced bus. The job growth corresponds to the new real estate development catalyzed by the investment in transit infrastructure.
HR&A compared the value of streetcar service and enhanced bus service in terms of economic and fiscal benefits each would generate, the ability to support development and place-making goals, and the anticipated timing of these impacts. This analysis builds on Arlington's previous transit studies that looked at the effects on the Pike of the streetcar-plus-bus alternative as compared to bus-only alternatives. The Arlington County Board adopted streetcar-and-bus as its preferred transit alternative for the Pike in 2006 and 2012.
Arlington and Fairfax's planned streetcar system will run from Skyline in Fairfax County, along Columbia Pike, and through Crystal City to Potomac Yard. It will provide high-capacity transit that connects to job centers and to the regional rail network – at a fraction of the cost of a new Metrorail line. Fairfax County is a partner in the Columbia Pike streetcar project.
Arlington County released a design services request for proposals this February. The selected contractor will begin engineering and design work on the whole streetcar system, its facilities and vehicles. Proposals are due in April. This spring the County anticipates selecting a program management consultant to oversee the streetcar design work, and releasing updated ridership projections for the Columbia Pike and Crystal City segments.
The current financial plan for the streetcar project relies on federal, state and commercial real estate revenues that are dedicated to transportation and cannot be redirected to other areas. The financial plan will be updated during the consideration of the FY2015-2024 Capital Improvement Plan this summer.
HR&A Advisors, Inc. has provided independent analysis for public-private development projects in the United States and abroad for more than three decades. The firm specializes in measuring the economic and fiscal impacts of major development and infrastructure projects. HR&A has supported the revitalization of communities across the Washington, DC, region and the country, including the revitalization of the Anacostia Waterfront, Fountain Square in Cincinnati, and the High Line in New York. The firm has offices in Washington, DC; New York, NY; and Los Angeles, Calif.