But where do you put the light rail? Put it on an elevated track, and that property value change goes the other way (noise, visual pollution, loss of sunlight). OK, so put it in the middle of the street. If it's a dedicated lane, not only do you suck up space from the cars, you have to figure out how to squeeze in platforms, and the light rail has to stop at both platforms and intersections making it painfully slow (take the Boston green lines as an example). If it isn't a dedicated lane, it's a streetcar and you have cars constantly squeezing around it and everybody has to stop to let people run into the middle of the street to get on, plus the odd traffic patterns created at every intersection (Toronto).
If you have the space for a dedicated right-of-way you might as well go full out and make high-cap rail. Otherwise, I see light rail as the worst compromise in-between subways and buses. There's a reason Manhattan has essentially eliminated all at-grade light rail, and elevated rail still exists only in the relatively poor neighborhoods: wherever the subway doesn't run, buses are best at filling the gap without destroying the street-level environment.
If you have the space for a dedicated right-of-way you might as well go full out and make high-cap rail. Otherwise, I see light rail as the worst compromise in-between subways and buses. There's a reason Manhattan has essentially eliminated all at-grade light rail, and elevated rail still exists only in the relatively poor neighborhoods: wherever the subway doesn't run, buses are best at filling the gap without destroying the street-level environment.