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Corporate Welfare / Subsidies

The Streetcar’s Economic Development Shell Game

By Patrick Tuohey on May 28, 2015

Despite the fact that all serious economic research on streetcars indicates that they do not drive economic development, Kansas City streetcar supporters keep providing misleading or contradictory numbers. They’re at it again.

kcstarmapJust after we published a post lampooning claims about economic development downtown, the Kansas City Star upped the ante by publishing a list of developments along the streetcar line.

The Kansas City Star continues to update  an interactive report that displays about 79 downtown projects totaling more than $1.7 billion that either have been announced, are in progress, or have been completed since the start of 2012, with the exception of some major civic projects.

Meanwhile, Sandy Smith over at NextCity provides us with more made-up numbers on the impact of streetcar development, quoting Downtown Council CEO Bill Dietrich:

“Since we began construction on the line, $900 million of new investment is coming into town,” he says. “We’ve been surveying the people creating these new developments and asking them how much the streetcar was a factor in their thinking. We found that about $250 million of that figure represents developers who said that either they would not be here without the streetcar or that the streetcar was important in influencing their decision to invest.” (According to the city, the latest numbers now total $1 billion in new investment, with $381 million owed to the streetcar.)

So there you have it. Kansas City streetcar supporters keep coming up with conflicting numbers from $250 million to $1.7 billion and everywhere in between. The serious research still remains: Streetcars do not drive development, unlike the myriad subsidies such as those given to Centric and 1914 Main.

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About the author

Patrick Tuohey

Senior Fellow of Municipal Policy

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