My bias is towards LRT in Hamilton, I'll put that upfront, but let me then address the comparisons w/Buffalo and elsewhere.
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Buffalo's LRT is not a complete failure, but certainly not fully utilized, that is, in part, a function of a city and region in decline in terms of population and jobs....
It is also, far more importantly, a function of where the LRT did or did not go.
In the case of Buffalo, the largest base of transit riders and car-less folks who aren't carless due to job-lessness, would be the students of the University of Buffalo whose campus is in Amherst.
The LRT does not go there.
Nor does it serve one of the region's largest employers (the Airport)
Nor does it even connect a major residential hub to its downtown.
Its a downtown line that goes just beyond the core, to nowhere in particular.
To be successful transit needs to reach its most likely potential riders where they live and take them to where they shop, go to school and work.
Buffalo's LRT does not do this.
That's the reason for its lackluster success; along with a downtown that is largely shut down after 6pm on a weekday, with only the crowds from the hockey games at the periphery of downtown providing a small nub of after-hours activity.
It was an American hockey player at the big Juniors tournament who said something like "This makes Medicine Hat look exciting"
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With respect to the layout of the proposed LRT in Hamilton, it remedies much of this problem.
First, its connected to MAC. Whether you want to go there Real is not the issue, the issue is that the student base there represents a huge number of riders, both commuters to/from campus, but also the resident students, who need to get out to go shopping or to a part-time job.
This benefits downtown and the route of the LRT by promoting same as a good place for off-campus students to live, as they could hop on the LRT and be at campus in a few minutes.
Second, its connected to Eastgate (shopping). No, its not Hamilton's best shopping, but it does draw a few folks and offers a different type of retail from the core, that might be important to some people living in the core or at MAC.
Third, while downtown Hamilton is very much a work-in-progress, it is already more lively than downtown Buffalo and already has more residents.
There are cinemas, a farmer's market, a central library among others that are real draws for those that live outside downtown. They may not be Regional draws, but they absolutely attract people from as far away as Mac or Eastgate.
Admittedly, there are destinations that are missed, like the hospital campuses, some things are unavoidable.
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In respect of LRT vs bus, its a simple question
a) Most people prefer riding LRT, is it way better? No. BUT, it simply gives an impression of somehow being more 'middle class' than a bus. Taking VIA is just more classy than Greyhound, and in the pecking order of transit, you draw people to a system sometimes because of the technology choice. Obviously route, frequency, cleanliness and fares all matter too, but technology does too.
b) Developers everywhere tend to invest around heavy rail/LRT because of its permanence. Obviously it is removable, and just because its there does not mean there will be high ridership/service. But, bus frequency, all other things being equal, will bring fewer riders, and is more subject to cuts by whim...(few gov'ts would dare to build a 1B LRT then run 30min-service on it.)
c) Because LRT has higher capacity to move people and is more attractive to most potential riders, all other things being equal, large employer will prefer to locate along it; the residents and the shopping follow.
Obviously its not as easy as all that, and you need to have other pieces in place like nice streetscapes, restored heritage buildings, schools that people would want to send their kids too, and so on, but LRT is one piece of that puzzle.
d) LRT will invariably lead to renewed and beautified streetscapes along the streets it operates on; where buses will trigger no such spending.
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Finally, there is no 'choice' of LRT vs Full-day GO service.
That's coming anyway, and entirely out of provincial coffers.
While LRT, if/when it comes will also be heavily subsidized from outside, meaning great leverage for Hamilton in terms of what it spends vs what it takes home.
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Lastly, I see the residential tide turning.
I'll grant that it hasn't really yet.....
But its certainly doing so all over the place, and I would expect Hamilton to be no different, there's been a generation shift, based on ecology, lifestyle preferences and the price of gas, which is just shifting most cities toward a more urban orientation.