The down-and-out men wait for the streetcars on Atlanta’s Edgewood Avenue, especially when the weather turns bad. The blue, blocky, two-car trains, installed at a cost of $98 million to revive downtown, have become a de facto rolling homeless shelter.

The 2.7 mile (4 kilometer) Atlanta loop, which turns one this month, is among more than a dozen streetcar projects rolled out in American cities since 2009 and four in the past year. They are the product of cities’ desire for hipper downtowns and a resurgent U.S. streetcar industry, and are paid for with $1.2 billion from President Barack Obama’s economic stimulus program, other federal sources and matching state and local dollars.

While streetcars in Portland, Oregon and Seattle have succeeded -- measured by high ridership and nearby investment -- others have struggled with cost overruns, construction delays, traffic snarls and accidents as drivers adjust to the giant machines gliding down the middle of roads. Seen as starter legs of more expansive systems, the nascent lines fuel criticism that the money should have been spent on existing public transit rather than going to carry people short distances slowly.

“You now have a big hulking transportation technology in the road that can only move backward and forward, can’t get around obstacles and is slower than bus routes streetcars often replace,” said Marc Scribner, a fellow at the free-market Competitive Enterprise Institute in Washington. “It’s transportation mission creep.”

Oregon politicians led the proselytizing. The Portland streetcar had become the nation’s model and a Portland-area company, Oregon Iron Works, was forming a subsidiary specifically to build them. Officials such as U.S. Representative Earl Blumenauer of Portland and Charlie Hales, now mayor of the city, argued that benefits such as “livability” weren’t captured by the strict transit cost-benefit measures the George W. Bush administration used to determine transportation spending.

LaHood’s Portlandia

With the nation in the grips of recession and stimulus money seeking an outlet, former Transportation Secretary Ray LaHood broadened the criteria after meeting with Blumenauer shortly after taking office in January 2009.

“It allowed the innovators and creators, namely the mayors, to do innovative approaches to transportation,” LaHood said in an interview last week. “The Obama administration, through our department, pretty much just said, ‘Go for it.’”

Soon, experienced rail building companies like Siemens AG of Germany; Inekon Group of Czechoslovakia; Construcciones y Auxiliar de Ferrocarriles of Spain were vying for the new federal revenue stream with Oregon Iron Works and a new division of a Pennsylvania mining company, Brookville Equipment Corp.