After streetcar line opens, $18B in development expected in D.C.

January 26

Downtown Washington hasn’t seen a streetcar in 52 years, yet the city has plans to build 37 miles of streetcar tracks, joining the ranks of Portland, Ore.; New Orleans; Seattle; and Tacoma, Wash.

Tucson, Seattle and Atlanta also expect to have streetcars operational this year, with another 12 cities expected to start construction by 2015. Arlington County may not be far behind with two proposed routes: one running down Columbia Pike and another between Crystal City and Pentagon City.

Streetcar proponents anticipate the introduction of service will attract additional investment to these corridors. They cite Portland as an example, which has operated its streetcar system for more than 12 years, and watched daily ridership grow from 4,000 at inception to 17,000 today.

The Portland Transportation Department reported in 2008 that $3.5 billion of development has occurred within two-blocks of its streetcar routes. Approximately 90 percent of the allowable density has been built within one block of the streetcar routes, which steps down to 43 percent of the allowable density built three or more blocks away.

The District’s Office of Planning expects up to $8 billion in new development within 10 years after completing work on the eight planned streetcar lines. District officials forecast demand for office space would increase by 3 million square feet and retail space by an additional 1.3 million square feet, supporting up to 1,200 net new households in the District each year.

Development along the H Street corridor has already picked up. A 215-unit apartment building completed construction last year at 360 H St NE, along with a new Wal-Mart at 77 H St. NW. In total, since the beginning of 2013, approximately 558,000 square feet of commercial space has been built or is currently under construction in the H Street Corridor compared with 18,000 square feet built during the 20 years prior.

In addition, the proposed streetcar line will connect developing areas of the District with established parts of the city. A planned 3.6-mile streetcar line will pass along K Street NW through the office-heavy downtown and connect to retail-centric Georgetown.

While few may claim that the streetcar is a fast and efficient way to travel, it is hard to deny the economic impact this mode of mass transit has made in Portland. The question is whether the District can replicate Portland’s success to this area.

D.J. O’Brien is a research manager with CoStar Group in Washington.

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