Within five to ten years, Oakland, Calif., has the potential to become a model of urban revitalization and sustainable livability.

It may sound a bit paradoxical — but it’s possible.

The name Oakland still too often conjures images of a run-down, crime-ridden cityscape. Oakland is consistently ranked among the top 10 most dangerous cities in the United States; unemployment hovers around 17 percent; and annual budget deficits run around $20 million to $30 million.

But all that can change quickly; in spite of the recession, positive changes are already evident. Now, an innovative new plan for a 2.55-mile streetcar line in Oakland is making waves, and has the potential to quickly transform the city’s downtown district into a livable, sustainable, and economically vibrant community.

The plan has inspired some of the city’s biggest businessmen to work on forming a coalition with property owners and developers to advocate for the streetcar.  And Rebecca Kaplan, one of three main candidates for mayor, has incorporated the streetcar project into her platform.

Yesterday I was lucky to have the opportunity to speak to Daniel Jacobson, the Stanford University student who designed the streetcar plan with some guidance from Dr. Lee Schipper, the founder of EMBARQ (the producer of this blog.)

I asked Jacobson about his plan and was quickly won over by his convincing arguments and comprehensive approach to tackling Oakland’s perennial problems.

TheCityFix: Why does Oakland need a streetcar?

Daniel Jacobson: There is so much untapped potential within the city. Oakland’s problems are very public, but when people talk about these issues — high unemployment, lack of investment, poor public education and safety records, and crippling budget deficits — they don’t usually talk about the causes.

Low sales tax revenue in Oakland is to blame for many of these problems. Oakland loses around $1.5 billion dollars in sales annually, which translates to about $15 million in sales tax revenue — more than any other U.S. city.  I thought about what Oakland could do to bring new growth and jobs while fitting in with the state’s broader smart growth goals, which are laid out in Assembly Bill 32 (AB32) and Senate Bill 375 (SB375).

The Bay Area is finally starting to turn the corner and take steps toward sustainability, and the Streetcar Project will advance these sustainability goals, while generating immense economic benefits.

TCF: Why choose the streetcar over other transit options?

DJ: Streetcars are a proven tool of economic development in Portland and Seattle, which is why so many cities across the United States — including Washington D.C., Los Angeles, Atlanta, Dallas, and Denver — are turning to the streetcar for economic development and smart growth.

Streetcars support attractive neighborhoods where you can live, work, shop, etc. — the textbook example of livable communities.

Why? Fixed long-term investment has a measurable effect on property values around streetcar lines, which inspires developer confidence.

The numbers speak for themselves: In 2001, Portland opened the first modern streetcar system in the United States that really used streetcars as an economic development tool.  Over the last fifteen years, the streetcar has attracted (within three blocks of the line) an additional 10,000 housing units; 5 million square feet of commercial space; and $4 billion in economic investment. It has also made development denser and more affordable. In the Pearl District, where the streetcar is located, 31 percent of housing is below market rate (thanks to an agreement between the city and developers). The area has become arguably the most attractive district to live in the city, and CO2 emissions have fallen dramatically — by 65 percent for residences, and 45 percent for businesses.

On top of the more affordable housing, the development-oriented transit has fostered more affordable living in general. For instance, families of four that previously would have owned two cars can get by with only one.

Seattle provides a more recent example. The streetcar began running in 2007; over the past six years, the project has brought $2.5 billion in investment to the neighborhood, and Amazon.com’s new headquarters will be along the streetcar line, in a neighborhood that otherwise would never have attracted the company.

TCF: Is there a history of streetcars in the region?

DJ: Just like nearly every city in California, the East Bay used to be home to an expansive streetcar system during the first half of the twentieth century. The inner East Bay was really carved by the street car lines.

TCF: Why is now the time to revive the streetcar?

DJ: A number of recently completed projects — and projects in planning stages — show that it’s possible to revitalize and build a sustainable Oakland. Just 10 years ago, there was nothing in downtown Oakland. Former Mayor Jerry Brown’s 10K plan has brought 4,200 new housing units to downtown, and another 5,000 are in planning. Also, revitalization of Jack London Square has completely reshaped the waterfront. And the city is still going to open Jack London Market, which will rival Seattle’s Pike Place Market as the West Coast’s largest waterfront market. The reopening of Fox Theater — a beautiful, art-deco theater that was closed for decades, and is now the most popular concert venue in the area — is another sign of revitalization.

All of these developments have turned the uptown area into a vibrant neighborhood.

So you can see that Oakland has really been turning the corner to make better use of its downtown, but this is just the tip of the iceberg.

In my research, I took an inventory of all surface parking, vacant lots, and abandoned buildings within three blocks of the proposed streetcar line, and found that the value of the land is significantly greater than the value of what’s on it.

While the 10K plan has developed 30 to 40 acres, there are still about 120 to 130 acres of extremely underused land within three blocks of the proposed streetcar line.

At the same time, a major project to create a new retail district — the largest retail investment in the East Bay — is planning on building 8,000 new parking spaces, assuming 80 percent of shoppers will drive. This parking would cost around $300 million, and make for more parking than retail space. The retail district proposal is dying because of these shortcomings; but it is absolutely necessary for the success of the city, and the streetcar could save the plan.

TCF: Are you emulating other cities’ streetcar plans?

DJ: I worked a lot with people in Portland and Seattle, analyzing their systems and their documents, but I tried to put my own spin on it with this project. There are three areas where this project is unique:

1. Through the inventory of underused land, I calculated how many thousand housing units, retail space, jobs, etc. would come with a streetcar line. I found that the streetcar would create 20,000 new jobs (not including construction), bring 20,000 residents to the area, and create 35,000 to 40,000 construction jobs over a 15 to 20 year period.  That would translate to potentially $4 million to $6 million in new sales tax revenue for the city.
2. I calculated the environmental benefit, which showed that this development would essentially cut local carbon emissions in half.
3. I created a few funding scenarios for this project, which will cost about $87 million to $92 million to build and $3 million annually to operate. Since development-oriented transit is generally funded by the people who stand to gain, the funding could come from a self-imposed 1 percent property tax within three to four blocks of the line. This provided one-fourth of the funding in Portland, and one-half in Seattle. In Oakland, it could be one-fourth or so of funding. For operations, which can be much harder to fund than construction, I wanted to minimize dependence on public contribution. Oakland could have as many as four private shuttles along the streetcar route — servicing hospitals, retail, the waterfront, and other spots.  If you compile private sources funding the shuttles with money from sponsorships and fares, it’s possible to fund operations with just 15 to 30 percent public subsidy from the city, Bay Area Rapid Transit (BART), and other sources.  To give a sense of how outstanding that is, BART — which has very low public funding —  is 40 percent publicly funded.

TCF: What surprised you the most as you were doing your research?

DJ: How much everything fits together. If you look at the big picture, the stakes are really high.  The Bay Area is expected to add 1.7 million new residents in the next 25 years, and export 500,000 households to the Central Valley. These people would be making hour-long commutes every day. So state and local governments are realizing we need to grow in a smarter way, not only because of congestion and quality of life considerations, but also because of things like climate change and reliance on oil. From a quality of life perspective, environmental perspective, and economic revitalization perspective, the project makes sense. And it’s practical. It’s very fundable and it could be done in under 5 years, like Seattle demonstrated.

TCF: Many people criticize streetcars for being too inflexible. What do you think about that?

DJ: In this case, permanence is a tremendous advantage, because it maximizes development investment around transit.  This plan doesn’t argue that streetcars are an inherently superior form of transportation — they’re not, and they’re certainly not a one-size-fits-all solution.  They’re excellent at stimulating growth in a specific, targeted area, but in general are not appropriate to blanket a city.  We need all modes of transportation to build more sustainable cities, whether it’s streetcars, BRT, subways, high speed rail, bicycles, or cars.

TCF: Finally, how will the streetcar compete with car culture in California?

DJ: The streetcar would foster a totally different lifestyle, creating the sort of environment where you can walk to the grocery store or a cool bar, and you’re not stuck in traffic. People want that in California, it’s just that there aren’t very many good examples so far.

We’re in the midst of a generational shift, where more and more people in the “iPhone generation” would much rather be able to hop on a bus or train and have a half-hour of productivity on their smartphone, rather than waste time stuck in traffic.  These concerns — together with concerns about rising gas prices and global warming — mean that California will be a tremendously different place in 2030 or 2050.