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A fixed transport link between Great Britain and Northern Ireland

Here is a report that was just published looking at the feasibility of a fixed transport link between Great Britain and Northern Ireland across the Irish Sea. It is part of a study known as the Union Connectivity Review, but according to the report, this idea has been floating around since at least the middle of the 1800’s. This recent report claims to be the most rigorous of the bunch though.

What they discovered is that it would be — you guessed it — super expensive. Somewhere in the range of £209 billion for a tunnel crossing and £335 billion for a bridge crossing. And it would take some 30 years before something like this could be operational when you consider planning, design, construction, and the various legal processes that something like this would require.

So the recommendation was to stop and do nothing. But if any of you are curious about what it would take to build across the Irish Sea, here’s your chance.

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Crypto energy consumption

One of the main criticisms of cryptocurrencies is that they consume a lot of energy and are therefore not sustainable. But all blockchains are not created equal and there are different ways in which transactions on a blockchain can be validated.

Bitcoin and Ethereum use something known as “proof of work” (though Ethereum plans to change this sometime next year). This method of validation does indeed use quite a bit of energy.

But another way to validate and maintain security on a network is through something known as “proof of stake.” This is what Solana and many other blockchains are now using. Put differently, there’s no “mining” required, which is the work that is so energy intensive.

To demonstrate the difference, the Solana Foundation recently published this comparison chart:

To try and further put this into context, the entire Solana network is currently doing about 20 million transactions per year. Right now, they are claiming that this is equivalent to the electricity usage of about 986 American households.

If you’d like to take a look at the footnotes, click here.

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Should we be building more live/work spaces?

Lately, I’ve become very interested in live/work uses. This is not something that I have written much about over the years, but it is now on my mind for a few reasons.

One, many of us tried working from home for the first time over the last 21 months or so, and my understanding is that some people enjoy it. It’s not my preference, but I don’t represent everyone.

Two, photography is a hobby of mine and I’ve always thought it would be super fun to have a studio space to play around with on the weekends. If any of you have any suggestions or spaces available, please let me know.

Three, there are lots of urban conditions where retail doesn’t work, but a bit more ground-floor animation would be nice. This is commonly how live/work uses have been used. That said, I can think of a number of unsuccessful examples of this in Toronto. It’s tough to execute on.

And four, there are lots of instances of older non-conforming spaces throughout our cities serving this purpose: inexpensive spaces for people to live, work, and create in. Though often “illegal”, I believe they are important for fostering new ideas.

Here’s an example that I was reading about this morning in The Spaces and that triggered this blog post. It’s about sculptor Andreas Anastasis and his live/work loft on the west side of New York.

I don’t know what building this is and whether or not work functions are technically permitted (presumably they are), but it’s an example of what I’m talking about. Take a spin through the video embedded above. If you can’t see it, click here.

Should we be designing and creating our new residential spaces with multiple uses and this kind of flexibility in mind? Is there a big enough market for it? Does it devalue the pure residential aspect of the building knowing that your next door neighbor might have an office in their space, an artist studio, or a short-term Airbnb rental?

These are some of the things that I’ve been thinking about and I would love to hear thoughts in the comment section below.

Photo: Maxwell Schiano via The Spaces

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Why construction productivity sucks and how it might be fixed

We are living through an inflationary hard cost environment. In speaking with one of our cost consultants the other week, he was predicting that overall we could see another 9-10% increase next year here in the Toronto area. Now, who knows what will ultimately happen. But this is top of mind for everyone in the industry and it will continue to impact how and what we build.

One of the challenges with construction — and this is will documented — is that unlike the manufacturing industry, which has seen sustained productivity improvements over the years, the construction industry has seen relatively little productivity growth over the last half century. In fact, you could argue that it’s been mostly negative in recent history.

The obvious thought is why not just apply what we’ve been doing in manufacturing to construction. There is, of course, a long standing tradition of trying to do this, with varying degrees of success. But at the end of the day, building a house remains different than building something like a car.

Probably the key difference is that every construction site has unique constraints and conditions and so the process is constantly changing. Whereas the innovations that Henry Ford pioneered were centered around interchangeable parts and a well-defined process that could be repeated millions of times to generate the exact same output.

From what I can tell, there seems to be two ways in which we can think about improving productivity. One, we can try to be more Ford-like and drive standardization. This means more off-site factory construction and more standardization. This is the typical “pre-fab” approach and companies like R-Hauz, as well as many others, are already successfully doing this. The trade-off is less design flexibility.

The second option has to do with better software and hardware. What if we had significantly better “digital twins” for our buildings such that we could see and experience it in 3D before it is physically built? I’m thinking strap on VR goggles and do a walkthrough with the team. This could allow us to pinpoint all of the issues before they actually happen on the job site.

In parallel to this, what if we had far better on-site automation and robotics to then execute on the above digital twin? Think 3D printing concrete instead of using traditional forms. This is all happening and being worked on, but it doesn’t seem to be at a point where it is changing our industry. But it is exciting to think that it may one day.

Photo by Di on Unsplash

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Being a real estate developer means asking a lot of questions

I was having coffee with a developer friend of mine this morning and we got onto the topic of asking a lot of questions. We joked that that’s what we do all day.

Development projects happen because of teams of very smart people all working together toward a common goal. It’s a beautiful thing. And as a developer, there are certain expertises and competencies that you should have.

But for the most part, we usually sit in rooms as the least qualified person. We are not structural engineers. We are not geotechnical engineers. We are not architects (though I sometimes pose as a fake one). We are not planners. And we are not façade specialists, among many other things.

But we are the ones taking on most of the financial risk and trying to bring everything together. And what that means is that you end up asking a lot of questions. You collect information, you try and consider what could go wrong, you lean on past experiences, and then you make a decision — often without perfect information or 100% certainty.

This is how projects move forward. You have to rely on others and you have to make decisions. Because not making a decision is even worse. It burns time, which is why too many cooks in the kitchen can be the kiss of death for development projects.

I’m sure the same thing can be said for many other things in life.

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Decentralization, centralization, and new frontiers

In this recent post by Naval Ravikant, he argues that innovation seems to like two things: decentralization and a frontier. He starts by giving the examples of more decentralized states (i.e. smaller federal governments) and the Wild West. The American frontier was, as you know, wild. But it was also a place of great innovation.

Naval then goes on to talk about the pendulum that tends to swing between centralization and decentralization. And in the world of technology, the last decade has been one of centralization (big companies). But this pendulum is much broader. Cities, as we have talked about before on this blog, are constantly in tension between centralizing and decentralizing forces.

COVID was a powerful decentralizing force for cities. Everything was closed and we were all supposed to stay home. And so most/all of the benefits of centralizing in a city were suddenly, yet temporarily, turned off. Many people naturally decentralized. But when the dust finally settles, I highly doubt it will be as dramatic as most people initially thought.

We know that cities and urban density encourage innovation. That’s why “unicorns” tend to overwhelmingly originate in big cities. But here’s the thing: this is a form of centralization. The fact that cities even exist in the first place tells us that their centralizing forces are winning out over the decentralizing ones.

So how do we reconcile this with Naval’s argument that new frontiers and decentralization are actually what are needed for innovation? I agree wholeheartedly that one of the key innovations with crypto, for example, is that it is decentralized and permissionless. But what does this ultimately mean for cities and our built form?

Does it encourage a similar sort of decentralization to happen? Or is the irony that decentralized technologies actually still thrive in centralized urban places? We may all be online buying NFTs, but we still want to get together in person to show them off and exchange ideas.

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Dwelling in peace

These “aesthetic monsters” are part of a new NFT collection that I recently bought into. They’re called Angomon (supposedly “ango” translates from Japanese into “dwelling in peace”). And they can be purchased on the Magic Eden NFT marketplace. At the time of writing this post, the floor price is about 1.15 SOL.

The ultimate plan is for these characters to live in some sort of 3D world that will be called the Angoverse (which is an obvious play on metaverse). The team is also planning to provide NFT holders with the original 3D files for these Angomon so that owners can 3D print their own real-world figurines. Longer term, the hope is that there will be official Angomon collectible figurines available for purchase.

All of these things are of course future plans. They could happen or they could not. These NFTs could have tremendous value or they could not. I just thought these monsters looked cool and fashionable, and so I bought a few. Right now the plan is to frame them and display them all at Parkview Mountain House.

But it is also interesting to note how go-to-market strategies are changing in this new world of crypto and web3. Fred Wilson recently wrote about this over on his blog. In web2 (think the Facebook/Instagram era), most consumer applications started out with a tool. The network came after.

Chris Dixon called this strategy, “come for the tool, stay for the network.” In the case of Instagram, the tool was initially photo filters. People used it to apply those filters that made every photo look brown and hipster-like. But eventually network effects took over and that became more important. There are were lots of people using it.

In web3, everything now seems to start with some kind of asset or token. People buy in and then become invested in the project, which is interesting because they then begin to market out of self-interest. This post is not about that and is more about sharing something that I think is cool.

Fred Wilson has proposed a new slogan for this. It is: “come for the assets, stay for the experience.” So these Angomon are now assets of mine. If the experience does eventually come, I guess I’ll stick around. Hello web3.

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Toronto is on the verge of finding the missing middle

Toronto’s chief planner Gregg Lintern (who you can follow over here on Twitter) was recently in the Toronto Star talking about the city’s plans to allow more multi-unit dwellings in our low-rise single-family neighborhoods.

I was careful to say “more” because they are already permissible in some areas. The challenge is that they’re not happening at any sort of meaningful scale, which is an obvious signal that some key ingredients are still missing.

Or perhaps there are too many required ingredients. For example, right now the zoning by-law requires one car parking space for every dwelling in a multi-unit building. This is, of course, dumb and the requirement should be completely eliminated.

Changes like this, as well as many others, are long overdue. Not just in Toronto, but in many other cities. And it is partially what I was getting at when I wrote about laneway housing this past weekend and hinted at the need for other solutions to increase housing supply.

So when you have a few minutes, I would encourage you to complete the city’s survey on expanding permissions for multiplexes across the city. I just did it and voted to bring on the multiplexes.

Photo by Tiago Rodrigues on Unsplash

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How developers in London responded to an expansion of inclusionary zoning

Eric Jaffe, of Sidewalk Labs, recently wrote about an interesting research paper — from the Journal of the American Planning Association — that looked at the developer response to an inclusionary zoning policy change in London. The full research paper can be found over here.

The change was an expansion to existing mandatory IZ policies. Between 2005 and 2008, each of the 33 local authorities in Greater London reduced the minimum threshold for new housing projects. Previously it only applied to new developments with 15 or more units, but it was reduced to projects with 10 or more units. In other words, projects with a total of 10-14 units were now subject to IZ, whereas they were previously exempt.

These feel like small unit counts, but I guess it speaks to the scale of development happening in London. You generally need pretty high prices to make these kinds of boutique projects pencil out. By comparison, the IZ threshold here in Toronto is expected to be 100 or more units.

In any event, here’s what happened in London:

Before the policy change developers were effectively building up to the 14 unit mark (to avoid IZ). Following that new supply dropped off. After the change, developers simply adjusted their project sizes and built more projects with less than 10 units.

Interestingly enough, the researchers found that there was generally no net loss of new homes during the study period (2004 to 2014); developers simply built more projects with lower unit counts. But more importantly, the team discovered that the policy change only kind of worked.

The increase in affordable housing was modest. The researchers uncovered a net increase of two affordable units per borough, per year, among projects within the 10-14 unit band. That’s something. But London is a big place.

Of course, this is a response to a particular kind of policy change in a particular kind of market. Development is a local business and it’s oftentimes hard to generalize. But it does speak to the fact that there are nuances, complexities, and market distortions to consider when it comes to land use policies.

Photo by Aaron Gilmore on Unsplash

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Toronto has issued nearly 200 building permits for laneway suites — is that enough?

We talk a lot on this blog about laneway housing and ADUs, including, of course, the one that Globizen built earlier this year. But beyond being exceedingly cool (see above), what has this policy change meant at the macro level? To what extent is it actually helping housing supply? Let’s consider Toronto.

As a reminder, “laneway suites” became permissible in the former/old City of Toronto in 2018. The policies where then expanded to the entire city of Toronto in the summer of 2019. So we’ve had just over 2 years of this housing type being fully allowed city-wide.

Though it’s worth keeping in mind that there are only so many laneways in Toronto (which is why “garden suites” are going to be important and may actually end up being more impactful):

Between the introduction of laneway suites and June 2021, the City of Toronto received 306 permit applications to construct, of which 238 were associated with a unique address (the same address can have multiple permit applications).

During this same time period, 183 permits were issued. 107 were still under review at the time this report was written. 15 were refused. And 1 was classified as “unknown”, which I guess means it got lost in the ether or under someone’s desk.

Some of you will probably argue that this isn’t enough new housing for a city of 3 million people with high home prices, high demand, and high immigration. And I would agree.

But it’s still early days, there will be an adoption curve, and the policies are still being tweaked to further remove some of the barriers associated with delivering this housing type. Of the 238 unique addresses that submitted a permit application, just over a quarter of them had an associated minor variance application, which means that they did not fully conform to the current laneway suite by-law.

The most common obstacles appear to be the 1.5m laneway setback, the soft landscaping requirements, and the required fire access. But I know that there are others too. I could have used another foot or two in height on mine.

But as I mentioned before, there are more areas in this city without laneways than with. And so garden suites are going to be an integral component of city-wide ADUs. This will certainly help the adoption curve.

I continue to believe that these are all steps in the right direction and that this is an exciting time for Toronto. We are in the midst of transforming our laneways. But we’re not done yet. We’re going to have to make many other tough decisions in order to further increase housing supply. I’m positive we’ll get there.