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Understanding Development Around Rail Stations: Kansas City Example

The Kansas City Streetcar is a two-mile-long starter line that will run along Main Street, connecting businesses, restaurants, art galleries, educational facilities and residents to the Central Business District and other destinations. Champions of the Kansas City Streetcar were intrigued by the economic development observed in other streetcar cities, such as Portland and Seattle, and they understood the importance of economic analysis at all phases of planning and development. To better understand the potential impact of the streetcar, economic analysis was utilized to estimate the direct transportation benefits and wider community benefits.

Direct transportation benefits were estimated using standard economic approaches and included travel time savings, emission reduction, and other benefits associated with improved access and mobility offered by the rail transit system. Wider community benefits factored in the city’s economy and real estate market, as well as the experiences of other streetcar cities, and were based on tax assessor, demographic, and real estate data. Locations that would be accessible by the streetcar were also considered, along with existing planning efforts and zoning. These community benefits are above and beyond the transportation benefits associated with improved mobility and choice. They reflect the changes in land use and neighborhood form anticipated to be generated by the transit system investment.

The economic analysis was useful to the city for public outreach efforts and utilized as part of a winning TIGER application that resulted in $20 million toward the project. Elements of the community development analysis were used to assemble the final finance plan, which included establishing the Kansas City Downtown Transportation Development District to help fund the system.

Construction of the streetcar line is under way and real estate professionals have already observed an uptick in prices along the alignment. New development has been announced, including a 257-room hotel and a new apartment building. According to the Kansas City Star, “When selecting a parking lot along the Kansas City streetcar line as the site for a 50-unit, five-story apartment building, Boulder-based developer Linden Street Partners was clear: ‘The streetcar is the big thing that drew [Linden Street Partners], absolutely.’”

Economic analysis helped determine the final alignment, secure funding, and better articulate the potential for development along the alignment and near stations. It utilized the experiences of other streetcar cities, but also factored in qualities unique to Kansas City, the alignment and possible station locations. Wider community benefits have yet to be realized, as the system is not yet operational, but the potential for improved mobility and access already seems to be supporting development and changes in property values along the streetcar alignment.