New streetcar lines are in the planning stages in Minneapolis and St. Paul. Proponents cite not only the lines’ ability to strengthen the transit system, but also their potential as catalysts for development. Estimating the impacts of streetcars is challenging, however, as most U.S. lines operate in downtown areas with many interrelated factors at play. A recent U of M research project examined the issue through the prism of one city’s experience: post-Katrina New Orleans.

The team—research fellow Andrew Guthrie and Assistant Professor Yingling Fan of the Humphrey School of Public Affairs—analyzed building permits near streetcar stops in the downtown business district and in several urban neighborhoods.

“Hurricane Katrina allowed—or required—more redevelopment to occur at a faster pace than 
normal, potentially allowing existing streetcar lines’ latent development impacts to appear,” Guthrie says. “This created an unfortunate yet rare opportunity for study.”

The researchers estimated how the frequency of commercial and residential permits changed with distance from streetcar stops, controlling for hurricane damage, proximity to existing commercial areas, and pre-Katrina demographics.

They found that throughout the system, building permits strongly reflect the distance to stops—and that commercial and residential permits move
 in opposite directions within the first 750 feet.

Commercial permits declined the further away the location was from a stop. In residential areas, commercial permits show variation depending on neighborhood characteristics. The number of neighborhood residential permits rose about 24 percent with every 100 feet from a stop.

Based on their results, Guthrie and Fan conclude that traditional streetcar lines can help increase commercial development not just in downtown business districts, but in other urban areas as well. The findings also indicate that streetcars
 shape development in urban neighborhoods in
 a fundamentally different fashion than light rail.

Read the full article in the January issue of Catalyst.