Return on Investment Study
Arlington retained HR&A Advisors, Inc., to update the analysis of the Columbia Pike streetcar’s projected return on investment (ROI) and compare it to enhanced bus service. The firm specializes in measuring the economic and fiscal impacts of major development and infrastructure projects.
HR&A analyzed the ability of both transit modes to facilitate the development goals in the County Board-adopted Columbia Pike Neighborhoods Area Plan. They conducted extensive research regarding other cities’ experiences with streetcar and bus alternatives, assessed local real estate conditions, and interviewed developers and retailers. 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.
What is enhanced bus service? It is the maximum improvement to bus transit in this corridor without a dedicated lane. It would include larger articulated buses and some features similar to a streetcar, such as off-vehicle fare collection, multi-door boarding and upgraded transit stations.
2014 ROI Study Findings:
View the full 2014 Return On Investment Study (PDF).
Streetcar = $2.2-3 billion more than enhanced bus over 30 years: Columbia Pike streetcar will generate $3.2-4.4 billion in incremental benefits for Arlington and Fairfax Counties, over and above capital and operating costs, during a 30-year time frame. The benefits derive from property value increases and faster and more expansive development. This is $2.2-3 billion more than would be generated by enhanced bus service.
Streetcar benefits include more jobs, more tax revenue:
- Over a 30-year period, the streetcar investment and resulting real estate impacts will generate $375-735 million in incremental tax revenues for Arlington. This is more than three times the amount generated by enhanced bus service. Streetcar service will help Arlington attract a more substantial share of new economic activity in the region.
- Approximately 10 years after start of construction, streetcar will attract 6,600 new jobs to the corridor over the number that would exist under baseline conditions. This is more than three times the incremental employment supported by enhanced bus. Job growth corresponds to new real estate development catalyzed by the investment in transit infrastructure.
We are offering an informational briefing on the ROI study to Arlington County commissions. The following are confirmed briefing dates:
- April 8 – Transit Advisory Committee
- April 24 – Transportation Commission
- April 28 – Planning Commission
- May 1 – Housing Commission
In 2012 the Columbia Pike Transit Initiative project team completed a Return on Investment Study (PDF) focused on the Streetcar Build Alternative. The study reviewed a range of U.S. transit projects and surveyed northern Virginia property owners and developers to estimate the benefits of a Columbia Pike streetcar investment. According to findings of this study, the streetcar would:
- Add public benefits of $252 million (2011) over a 30 year period (travel cost, travel time, improved safety, emissions avoided, and residual value)
- Increase the value of adjacent land by $126 to $315 million (2011)
- Lead to an estimated $1 billion (2011) of additional building stock along the project corridor over a 30 year period
- Bring additional tax revenues of $292 to $532 million (2011) over a 30 year period (assuming current tax rates)