April 26, 2024
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Toronto’s unstable neighborhoods

This is a telling map from Jens von Bergmann. It shows the changes in population density across Toronto from 1971 to 2021 (measured in people per hectare). What is obvious is the spikiness of our city. We have been very effective at adding lots of people downtown, along the central waterfront, and in certain other pockets. But at the same time, we have let our older inner city neighborhoods move in the opposite direction and lose people.

The irony of this outcome is that we have long created policies that refer to these areas as being “stable” neighborhoods. The idea was that they weren’t supposed to change, at least not too much. But what this data shows is the opposite. By restricting growth, we actually created the right conditions for them to lose people as demographics changed and household sizes got smaller, among other things. We created unstable neighborhoods.

Thankfully, we have started to change course and allow some intensification. We’re not there yet, but I do believe that the next 50-year map will look quite different than the one you see here.

April 25, 2024
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Open-air corridors and exterior exit stairs

Montreal is, in many ways, a city of winding exterior stairs. If you’ve been there, then you know. The city is overwhelmingly a city of low-rise apartments (less than five storeys). And with these, comes lots of exterior circulation. But this tradition doesn’t just apply to older buildings. Here is a contemporary tall-building example which follows a similar approach.

Designed by MSDL Architects, the project, called The Laurent & Clark, consists of two tower volumes. They read as two separate towers, but they’re connected and share egress paths. On the east side is a conventional “scissor stair” tucked behind two elevators. And on the other end, connected by an open-air corridor, is an exterior exit stair that runs all the way up the tower.

Here is a circulation diagram via Azure:

This is novel (at least in this part of the world). The suites in the west tower are all dual aspect; meaning, they have windows on both ends.

They also have direct elevator access (see cores above), which means a lot less non-revenue generating circulation space. I mean, if you think about it, the open-air corridor on the north side of the west tower is akin to building a simple balcony. Extend the slab and add a guard rail. And so you could argue that this portion of the building has a near 100% efficiency factor.

However, the downside is that you need more elevators. Here, it looks like they have 6 for their 356 suites. That’s an overall ratio of just under 60 suites per elevator, which is lower (i.e. better) than what you’d typically find in a conventional tower. The crude rule of thumb is 1 elevator for every 100 suites. That said, these direct-access suites would be premium.

But perhaps the most important takeaway is this: If cold and snowy Montreal is cool with open-air corridors and exterior exit stairs, then maybe your city should be as well.

April 24, 2024
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Rents are lower, but what does that ultimately mean?

Paris is the first city in France to implement some form of residential rent control. The first came in 2014 (enacted in the market in 2015), but this was later removed in 2017. The second came in 2019, and this current program remains in place until November 2026, at which time it will be reviewed.

But given that it has already been in place for a number of years, people have started to analyze it’s effectiveness. Here is a study by Atelier Parisien d’Urbanisme (APUR) that was published this month.

The report is in French, but I can tell you that, what they did, was compare the Paris region to 8 other cities in France — all of which do not have the same rent controls. They were: Aix-en-Provence, Grenoble, Marseille, Nantes, Nice, Strasbourg, Toulon, et Toulouse. These were allegedly chosen because their housing markets are thought to be similar to that of Paris’.

What they found was that from July 2019 to July 2023, legislated controls in Paris lowered rents by approximately 4.2%, compared to where they would have been without any market intervention.

At the same time, they noticed that these same controls seemed to become more effective over time. From July 2019 to June 2020, they lowered rents by 2.5%, but from July 2022 to June 2023, they lowered rents by 5.9%.

Finally, they also found that the controls seemed to impact smaller places the most. For apartments between 8 and 18 m2, rents were 10.2% lower than expected during July 2019 and July 2023.

This is all interesting stuff, but in many ways, it is expected. Rent controls are intended to depress rental growth. That’s the whole point. And based on this data from APUR, it is working in Paris.

But the really tough questions pertain to the possible knock-on effects. If rents are 4.2% lower, but operating costs are now growing faster than rents, then this is a problem for the housing market. You’re on an unsustainable path.

And if lower rents mean that fewer developers are going to build new housing, then this is also a problem, because less supply will eventually translate into more upward pressure on rents. I don’t know for sure that this is happening in Paris, right now, but these are crucial considerations.

It’s never as simple as just looking at rents and thinking lower is better for long-term affordability.

April 23, 2024
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How big (or small) are your parking spaces?

There is an ongoing architecture/development joke that the way you design a building is by first starting with the parking. Once you’ve figured out how the parking will work, you can then move on to, you know, the secondary stuff, like figuring out how actual humans will occupy your development. I’m calling it a joke, but there’s obviously some truth to this. Parking is almost always a challenge, especially if you’re developing in a city that still has parking minimums.

Previously, I’ve talked about the benefits of “unwrapped” above-grade parking. This is generally counter to how most cities like to think about parking. But for a few reasons, it can make a lot of sense. However, to be clear, I’m not advocating for more parking. My point was simply that — if you absolutely have to build parking — then maybe you should look at spaces that give you some flexibility in the future.

At the same time, there’s another more nuanced thing to consider: how big are your actual parking spaces? Here in Toronto, a standard parking space is 2.6m wide x 5.6m deep (about ~157 sf). This is larger than some apartments. But these minimum dimensions can vary greatly by municipality. Oftentimes you’ll hear planners say, “well, people here like their big cars.” The problem with this is that these dimensions will dramatically change your parking design.

So today I thought it would be interesting to gather a few data points from all of you. What are the minimum parking space dimensions in your city? Please leave a comment below so that everyone can see. As far as I know, there isn’t a globally accepted set of dimensions for parking spaces. Perhaps because some places like big cars and other places don’t care. But maybe there should be.

April 22, 2024
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New York’s first all-electric tower

Here’s the thing:

Nationwide, the biggest single source of emissions is transportation, dominated by low-occupancy cars and trucks. But in New York, most people use mass transit instead of driving. That means buildings “are by far the largest source” of climate pollution in the city, said Christopher Halfnight, senior director of research and policy at the Urban Green Council, a nonprofit focused on energy efficiency in buildings. Gas- and oil-burning furnaces and water heaters are together responsible for 40% of NYC emissions, according to Halfnight.

In response to this, New York City has been passing laws that restrict greenhouse gases and that by and large incentivize electrification. One of these is Local Law 97, which will generally require buildings over 25,000 sf to reduce their GHG emissions by 40% (relative to 2005) by 2030.

Already the market is responding. Alloy Development has just completed the city’s first all-electric tower at 505 State Street in Brooklyn. Tenants began moving in on April 5.

When team members asked what the complex would look like absent gas, the answers were fairly straightforward. “Instead of a gas boiler, an electric boiler; instead of a gas cooktop, it was an induction cooktop. And literally that was it,” said Pires, noting that they had to revise the design of the electrical room to allow for higher amperage, since more incoming electricity would be needed for a larger electrical load.

Some, or perhaps many, in the industry are fighting these new laws. In 2022, a co-op in Queens apparently went to the New York Supreme Court. But directionally, this certainly looks to be where we are headed. So you can either fight it, or you can try and get ahead of it, as Alloy has done here.

For more information on 505 State Street, go here (Bloomberg) and here (project website).

April 21, 2024
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XS in Philadelphia, not Tokyo

This is the sort of housing project that you’d fully expect to find in Tokyo. Seven homes built on a small urban lot measuring only 11 feet wide by 93 feet deep. But in this case, it’s not Tokyo; it’s Chinatown, Philadelphia, where a residual lot that was created when the sunken Vine Street Expressway was carved through the middle of the city in the 1950s.

Designed by Philadelphia-based Interface Studio Architects (ISA), the project contains 7 levels of livable space. What’s interesting, though, is that from a building code perspective this is still a 4-story building. There are two mezzanine levels that don’t get counted (and that create some great double-height spaces). This also seems to be what allowed them to get away with a single egress stair in the middle of the building.

The other technique that was used to maximum density is facade projections. Philadelphia’s zoning code allows for projections up to 3 feet in the horizontal dimension. And if you look at the above plans, you’ll see that these were used to “top up” or extend the site’s 11 foot width to 14 feet, when it made sense to do so from a programming standpoint. The result is some very livable spaces.

I am endlessly fascinated by these sorts of projects because they demand creativity and because you ultimately end up unlocking something that the market had been overlooking. Here is an example of a small leftover urban parcel that was previously used as surface parking for two cars. Now it’s seven beautiful homes.

Photos/drawings: ISA

April 20, 2024
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Investors vs. end users

Over the years, we have spoken a lot about the role that investors play in Toronto’s pre-construction condominium market. In the media, they are often spoken about pejoratively. They are seen as being a well-capitalized group that outbids end-users for a limited supply of new housing.

But on the other hand, we know that (1) they have been a major contributor to new rental housing in this city (they filled the gap after we decided in the 1970s that we didn’t like purpose-built rentals) and that (2) they play an important function in getting new housing financed.

For better or for worse, we know that, without an investor market, there would have been far fewer new homes constructed over the last cycle. Pre-sales are generally always a prerequisite for a construction loan. And the fastest, and therefore safest, way to get pre-sales is/was to target investors.

But the world has changed since then. Investor demand has diminished. So much so that you could argue that the opposite is now true.

I was speaking to my friend Christopher Bibby this morning and he reminded me that end-users, who are passionate about specific projects and neighborhoods, are the more resilient demand base during a downturn. Because if you need a place to live, you need a place to live.

Perhaps it’s no coincidence that every single sale that we have had at Junction House this year has been to an end-user who moved in.

April 19, 2024
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More sellers than buyers

This week, Urbanation released its condominium market update for Q1-2024. And I’d like to point out two data points. Firstly, across the Greater Toronto & Hamilton Area (GTHA), there were 1,461 new condominium sales for the quarter.

This is the lowest quarterly total since Q1-2009 (the global financial crisis) and the second lowest total since the mid-1990s. (Remember when we spoke about right now being the toughest market since the early 90s?)

Secondly, during this same time period, 2,361 new condominiums began construction across the region. This represents a 52% annual decrease. So all in all, fewer people are buying new homes and fewer new homes are starting construction.

What is obvious is that the market is slow right now. What is not obvious is what happens next. It’s unknowable. There’s risk. My gut is that the market will come back more slowly than many people are expecting, or perhaps hoping. There’s inventory that needs to work its way through the system first.

But ultimately it will come back. Toronto is one of the greatest cities in the world and there remains a need for more homes. Which is why I continue to believe that, if you are in the market for a new one, now is arguably a wonderful time. You get to buy when most others aren’t.

April 18, 2024
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The risk of not taking risk

One simple definition of risk is that it’s the “possibility of loss or injury.” And that’s generally how most of us think about it — it’s a bad thing that needs to be managed, minimized, and sometimes avoided all together.

While true, this recent memo by Howard Marks is a good reminder that risk is also indispensable. Or, put differently, there’s risk in not taking enough risk. This is true in business and finance, but it’s also true — as Howard argues — in chess, in sports, and in many other aspects of life:

The paradox of risk-taking is inescapable. You have to take it to be successful in competitive, high-aspiration arenas. But taking it doesn’t mean you’ll be successful; that’s why they call it risk.

By definition, it means that you will be wrong sometimes. Because if you couldn’t possibly be wrong, then it wouldn’t be a risk. It would be a known. And known things exist in our world in a very different way than uncertain things. Superior performance, as a gross generalization, demands uncertainty.

So what’s the solution? Calculated risks:

You shouldn’t expect to make money without bearing risk, but you shouldn’t expect to make money just for taking risk. You have to sacrifice certainty, but it has to be done skillfully and intelligently, and with emotion under control.

April 17, 2024
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Walking back a transit decision

I take the UP Express train into the office every day (here in Toronto). This is a rail service that we have spoken about many times over the years on this blog.

It started as an airport link that was too expensive, but was then repriced so that more people would use it, and use it locally. It is now widely used by people like me. I don’t know the exact split, but in the mornings, it feels like majority commuters.

Then on Monday of this week, the province announced that local service would be reduced from every 15 minutes to every 30 minutes. Supposedly this was in order to improve service between downtown and Pearson airport.

Commuters immediately reacted. In fact, while riding the train on Tuesday morning, there was quite literally a guy beside me on the phone trying to complain to his local city councillor and MPP. A petition was also started on Monday that, at the time of writing this post, had close to 6,000 supporters.

And then — some 24 hours after the initial announcement — the Minister of Transportation announced that the province would be walking back this service change and that he had “directed Metrolinx to not proceed.” Boom.

As a daily rider, this selfishly makes me happy. But more importantly, I think it, once again, shows how quickly voices can get amplified in today’s world and how important good regional express rail is to our city. Clearly we need more of this!

Sadly, it probably also shows that some people have no idea how lines like these are actually getting used. I have to believe that if anyone had looked closely at ridership and the split between local/airport, that this decision wouldn’t have been made in the first place.