On Saturday, February 27, the DC Streetcar finally opened its 2.2-mile stretch on H Street and Benning Road N.E. Years delayed and for a cost of $200 million, this is what we get. The Economist called it “pointless” and a “folly.” Others were blunter. Most D.C. residents accept that their city has wasted a lot of money, but just how wasteful was this sentimental excursion into the mass transit past?
The DC Streetcar mirrors the H Street-Benning segment of the 5.2-mile X2 bus service, which is 30 percent faster than the DC Streetcar. The DC Streetcar stops short of two Metrorail stations on either end, making it completely worthless relative to the existing bus service. With the money they spent building the streetcar, the city could have cut $25,000 checks to every weekday X2 bus commuter in the corridor.
I did not survey H Street/Benning commuters waiting for the bus or streetcar this morning, but suspect most would take the $25,000 in lieu of DC Streetcar service. Or perhaps the city could have spent a few million dollars buying all-electric circulator buses that would actually connect to the Minnesota Avenue and Union Station Metrorail stations (the $200 million procured six streetcar vehicles).
But, of course, the primary purpose of the DC Streetcar wasn’t to enhance mobility and employment access. Why would the District Department of Transportation be interested in such trivial matters? No, the main purpose was to promote economic development in the neighborhood.
H Street, and to a lesser extent Benning Road, have seen rapid redevelopment in recent years. The area is a popular nightlife district and is home to trendy, expensive condos and renovated row houses. Property values in the area have skyrocketed. For instance, a 1,000-sqft row house near the least-developed terminus on Benning Road and Oklahoma Avenue, N.E., sold in November 2015 for $560,000. On the other end of the streetcar line, similar homes go for more than $850,000. In between, they run somewhere between $600,000 and $900,000. Renovated condos range from $300,000 to $700,000.
The supposed economic development argument for the DC Streetcar is incoherent for a couple of reasons. First, according to a study funded by the Federal Transit Administration and published by the Transportation Research Board of the National Academies during President Obama’s first term, there is no evidence that streetcars promote economic development. Streetcars and concurrent tax subsidies may shift development that would have occurred elsewhere in the metropolitan area, but even if this is true, government is essentially paying for something we would have received for “free” while subsidizing a particular set of property owners.
Second, in a city where poverty, homelessness, and other socioeconomic problems are exacerbated by some of the highest housing prices in the country, is it morally defensible for the government to use taxpayer funds to boost real estate prices in a neighborhood where 1,000-sqft row houses cannot be purchased for under half a million dollars? Are the goals of “economic justice” served when the government taxes the poor to fund amenities in an attempt to raise the property values and rents in an increasingly affluent neighborhood? I would argue no.
Fortunately for those forced to live near this thing—and unfortunately for the rest of us D.C. taxpayers—rides will be fare-free until city officials figure out how to charge passengers. Atlanta offers an interesting lesson in this regard. After they “beat” D.C. in opening their 2.8-mile, $100 million downtown streetcar in December 2014, the service operated fare-free until January 2016, when they began charging a $1 fare.
During the fare-free year, the streetcar became a refuge for Atlanta’s homeless population. Following the introduction of dollar fares, homeless ridership collapsed—but so did overall ridership. Ridership in January 2016 was down 66 percent from January 2015. The Atlanta streetcar made less than $10,000 in revenue in January, 97 percent short of the nearly $420,000 in monthly revenue it needs just to break even on operating and maintenance costs.
The DC Streetcar is a wholly indefensible transit project and a slap in the face to every resident struggling to get by in the nation’s capital. The one bonus is the streetcar could be a more comfortable way to spend the daytime hours for people made homeless by the D.C. government’s policy of subsidizing wealthy real estate developers on H Street to drive up rents, at least until the government figures out how to charge fares and remove the homeless.