Last month, Waymo (Alphabet) and Uber announced a new multi-year partnership that will bring Waymo’s autonomous vehicles to Uber in the Phoenix area later this year. Already, Waymo operates across 180 square miles of the city, making it the largest fully autonomous service area in the world. But now, or I guess later this year, people will be able to order a Waymo AV through the Uber app.
Not a lot of people seem to care about autonomous vehicles anymore. For a while, every conference had people talking about how they were going to reshape our cities. But then the technology didn’t arrive quite as quickly as people were hoping, and so everyone lost interest and move on to other more exciting things. But clearly things are still happening. And this announcement strikes me as being an important one.
Okay, so I haven’t tried it yet. But Apple Vision looks pretty awesome and the people who have tried it seem to be very impressed by it. The best article that I have read, so far, is this one here by Ben Thompson (of Stratechery). He gets into some of the tech details and explains why Apple is probably the only company in the world that could have created a device like this.
For those of you who are interested, Apple Vision is still technically a VR device, even though it is being marketed as an augmented reality (AR) device that allows you to stay engaged with the world around you. This last part is true, but it is all done digitally through 12 cameras that capture the world around you and then display it back to you.
So experientially, yes, it is an AR device; however, the tech behind it is actually just exceptional VR.
But this is not the point of today’s post. The point I would like to make is one that Ben raises at the end of his article. After praising Apple Vision’s achievements, he goes on to argue that the arc of technology is one that is leading toward “ever more personal experiences.” In other words, it is increasingly about individual, rather than group, use cases.
And this is one of the first things that I thought of when I watched the Vision Pro keynote. “Wow, this looks like a really cool way to watch and experience a movie. But how do I do that with my partner? I guess we both now need Vision Pros. And what about families with a bunch of kids? That is a lot of Vision Pros.”
But maybe this doesn’t matter. Ben’s point is that it’s probably not an accident that this technology arc is happening at the same time as a larger societal shift away from family formation and toward more feelings of loneliness. Indeed, the number of single-person households has been steadily increasing in the US since the 1960s. The current figure sits at more than 1 in 4 households.
So there is an obviously dystopian narrative that we could all tell ourselves here. It is one where everyone works from home, plugs into virtual workplaces, and then flips over to other, more exciting, virtual worlds when it’s time to unwind from the stresses of the former. And if you think about it, this isn’t that much of a stretch compared to what many of us do today.
Whatever the case, in my mind, none of this is any reason to become bearish on cities. Humans will still be humans. And none of this tech is going to replace the feeling of enjoying a perfect pesto gnocchi in an impossibly narrow laneway in Milan, or drinking a caipirinha on the beaches of Rio de Janeiro while being surrounded by shockingly beautiful people.
The typical way to do it looks something like this:
Hire a creative agency
Come up with a new name and brand identity that speaks to your target market
Create a new website and new social media accounts
Start marketing the project with this new single-purpose brand and identity in the forefront (the developer’s brand is usually far less prominent)
Of course, this is the typical way and things do vary. What I would like to discuss today is this last point: the interrelationship between new project-specific brands and developer brands. Because in most other industries, the brand of the company is paramount. It is everything. When BMW releases a new car model, it is BMW and then the something. It is not the something, with BMW hidden at the bottom of the page.
So why is real estate any different?
One possible explanation is the entrepreneurial and opportunistic nature of development. New projects are often the result of people and groups coming together to make a specific “deal” happen. And unless you’re an established player with a long history, you may not have a consumer-facing brand with much equity in it. So you rely on a new single-purpose one instead.
But perhaps the main reason is that, as an industry, we have never really succeeded at making buildings a product (architects sometimes despise when you call buildings this). It is for this reason that every building can feel like a prototype and that prefabrication remains this dream that never seems to become a reality. A product implies something repeatable and producible at scale. And buildings are generally not that. Every market and site are unique.
All of this said, there are ways that developers are building meaningful brands for themselves.
The first way is to obviously focus on building your own brand alongside or in lieu of strong project brands. One example of this is Toronto-based Urban Capital. They build a specific kind of condominium building/product and, to the extent that it’s possible, it doesn’t change whether they’re building in Saskatoon or in Halifax. David Wex, one of the partners, describes this as branded vs. opportunistic real estate development.
Another example is Toronto-based Fitzrovia (which I wrote about, here). They are one of if not the most active rental developers in the city. And if you go into one of their apartment buildings, you’ll find the same No. 10 Dean coffee shop and bar in the lobby; the same rooftop pool (called LIDO); the same gym (called The Temple); and the list goes on. Their goal is to build a consistent and hospitality-like experience for apartments.
The second way to go about building a brand is to make it so attractive that other developers will pay you to use it. The best example that I can think of is London-based YOO. A partnership between John Hitchcox (a developer) and famed designer Philippe Starck, they have built a business out of creating branded residences for third-party developer clients. And this is in some ways the holy grail of development: you get paid without taking on the risk of building.
Of course, this same licensing model is also used with hotels. And hotel brands are globally the most common kind of branded residence. What this obviously tells us is that brands matter a great deal in real estate. They matter so much that developers will pay to use the right one, because it will likely command a premium and it will likely increase sales/leasing velocity.
It is for this reason that I’ve always felt it important to grow the parent brand alongside any project-level brands. And it’s why we never bother creating new social accounts for our individual development projects. Brand building takes time. If you’re going to invest time and money into one, why not take advantage of the compounding at the very top of the house.
The roots of French dominance lie in a luxury ecosystem that dates to the court of Louis XIV, and a culture of corporate raiding that began with Bernard Arnault. After gaining control of LVMH in 1989, he set out to build the first house of luxury brands through serial acquisitions. Rivals followed his lead. Increasingly, the global luxury industry is based on goods that are still made by small Italian firms but sold by big French conglomerates. Gucci, Bulgari, Fendi — all are Italian brands now under French owners.
While US tech firms overshadow all rivals, the same can be said of French luxury. Among the top luxury firms, the French have annual sales three times higher than the Swiss, more than four times the Americans and Chinese and 12 times the Italians.
One of the most interesting things that LVMH is doing, though, is a combination of tech and luxury goods. In 2021, they announced, along with founding partners Prada and Cartier, a new luxury goods blockchain called Aura.
The idea behind Aura (an appropriate name, in my opinion) is to create a kind of digital passport that proves authenticity and ownership, and also allows for traceability. So if you want to sell one of your luxury items or you need to service it, now someone can easily see the chain of ownership and determine that it’s real.
This to me is a perfect use case for the blockchain technology and, as of March of this year, the group was reporting 24 brands on board. At the same time, they also announced a new feature that allows brands to participate through public chains such as Ethereum or Solana.
All of this is probably still very esoteric to most. But eventually the tech will recede into the background and most will probably just see it as, “I’m buying this expensive purse and along with it I get this digital passport thingy that lives on my phone. I don’t know or care how the tech works, but it makes me feel even more special.”
However, a big question remains: What does all of this innovation do to industry concentration? (Which is one of the main points of the above article.) One promise of crypto is that it will be a decentralizing force in our economy. And while I believe this to be directionally true, I obviously understand that LVMH has an empire to maintain here.
For those of us who deal in real estate, it is also interesting to think about this topic of brands and authenticity when it comes to property. And so we will talk about that later this week on the blog.
We have spoken about this topic — of larger family-sized suites — many times before on the blog. And my argument then, as it is now, is that the largest barrier is cost. We can talk about cultural biases (which I do think exist in North America) and, sure, we can talk about how to better design for families. But until we solve the problem of costs or until low-rise housing gets so prohibitively expensive that it tips the scales in favor of multi-family buildings, I’m not sure we’re going to see a meaningful shift.
So how do we address this? There are a number of interesting ideas in the above Twitter thread that I would encourage you to check out. Ratcheting down or eliminating development charges (and other government levies) on larger suites is one of them. But what is obvious is that this is a challenging problem to solve. So the brutally honest answer is that I don’t really know what will be most effective. But here are three potential places to start.
As-of-right mid-rise buildings
Remove the barriers to building more mid-rise. One irony of mid-rise buildings is that they are probably the most desirable form of multi-family housing and yet they’re the most expensive to build. A lot of this has to do with construction costs and other unavoidable diseconomies of scale, but there are other things we can do. In my view, we should target to make all mid-rise buildings fully as-of-right. This means no rezoning costs, no community meetings, and overall simpler designs. Instead, the rough process should be: buy site, work on permit drawings, and start marketing new homes.
Growth pays for as much as possible
Please watch this short 1-minute video:
This is also something that we talk a lot about on this blog. But most people outside of the industry don’t think of it in this way, or they don’t care. The mantra is that “growth pays for growth”, which obviously sounds good. Tax new housing based on its impacts. But in reality this is not what’s happening. What is happening is that “growth pays for as much as possible as long as new home prices keep rising.” And it persists partially because nobody except evil developers see these large bills. But if we really want to make new housing more affordable and if we really want to encourage more families in new multi-family buildings, then we need a more equitable solution.
Financing new family-sized homes
The way we finance new homes impacts the kind of housing that gets built. Here in Toronto, new condominium projects generally require a certain percentage of pre-sales, because construction lenders want as much certainty as possible that they will get their money back upon completion. In theory, it also reduces the chance of overbuilding because you’ve pre-sold most/all of the homes. So there are obvious benefits to this approach. However, the problem is that you need people to now buy in advance. And oftentimes, the people buying early aren’t families who expect to need 3 bedrooms in 5.2 years. Should there be another financing solution for larger homes?
Once again, these are just three potential places to start. But I think they’re all critically important. If you have any other suggestions or ideas, please leave them in comment section below.
The winners of this year’s Architizer A+ Awards are out.
Now in its 11th year, the A+ Awards are intended to “honor the world’s best architecture and spaces.” And supposedly, it is also the world’s largest (119 categories) and most democratic architectural awards program. I don’t know, I read that here.
I went through the list of winners this evening (okay, I skimmed this Urban Toronto article), and I’m now excited to report that 13 Canadian projects/firms won an award — either a Jury Award, a Popular Choice Award, or a Special Mention.
I’m also excited to announce that one of the winners is our One Delisle project. It is the Jury Winner for best unbuilt multi-unit housing project (over 10 floors). Awesome!
If you’d like to see the full list of winners, click here.
The City of Vancouver recently published this video talking about missing middle housing. For those of you who are following this trend (and reading this blog), there won’t be a lot that is new in the video (although Uytae Lee is great). But I’m sharing it here, anyway, for three reasons. One, it’s an example of Toronto being ahead of Vancouver, which wasn’t the case with laneway housing. Vancouver started allowing these first. Two, it is further evidence that this shift toward intensifying low-rise residential neighbourhoods is really happening — and gaining momentum — all across North America. And three, the City of Vancouver is about to bring forward new multiplex housing policies. So now is a good time to get involved and say things.
I am really drawn to live/work spaces like these ones here in Oklahoma City’s new Wheeler District. (Additional project info can be found over here.) We have some examples of this in Toronto, but I wouldn’t say it’s commonly done. And oftentimes they don’t work at all. More often than not, these spaces seem to just get used as strictly residential (which is okay).
But there are some arguably successful examples that we can point to. CityPlace is maybe one. When the area was first getting developed, retail would have been an extremely difficult use to underwrite. It was a development island. And so live/work suites were introduced at grade along much of the area’s main artery.
The area did eventually get new dedicated retail, but its live/work suites also started taking on more “work” as demand in the area grew. Today, nobody is going to confuse it with Bloor Street, but importantly, the ground floor was able to change and adapt. And this is one of the great benefits, or at least promises, of live/work: you get additional flexibility.
Personally, I would love to have a live/work space. I’d use it to incubate new ideas and sell random stuff. And I have a feeling that, given the opportunity, many others would do the same. So I plan to spend some more time thinking and writing about this topic. If any of you have shining examples of live/work successes, please share them in the comment section below.
Not surprisingly, the responses were divided. Some responded saying that beauty is more important than density, and a lot of people were quick to point out that there’s good density and there’s bad density. And because I can appreciate both of these comments, it made me think that I should probably elaborate on my glib tweet.
The points I was trying to vaguely imply are the following.
More often than not (at least for North American cities), I think our problem is not too much density, it’s too little. This translates into cities that aren’t walkable, aren’t conducive to transit, and that are overall less sustainable. Right now, every mayoral candidate in Toronto is promising to fix our crippling traffic congestion. I don’t know how they’re going to do it, but they’re promising it because they know it’s something people are pissed off about.
But here’s my take: counterintuitively, the problem is not enough density. The problem is that too many people in our region have no reasonable way to get around without a car. So they’re forced to drive. The way you fix this not as simple as more traffic enforcement or better signal timing. Good luck! You fix it through density, because density is what makes other forms of mobility suddenly possible.
All of this is not to say that density alone will render you a great city. Obviously things like beauty also matter a great deal. But in my opinion, density is a fundamental component. Because what good is beauty if you don’t have any urban vibrancy? The answer is that you probably don’t have a real city.
The other point I was trying to make is that space and density are both relative and oftentimes difficult to understand. We think building height and density are correlated, but that’s not always the case. Look at Paris or Barcelona. We also like to make a lot of spatial rules that we think are right and make our cities better: streets should be at least this wide, buildings should be no taller than the width of the street, and so on.
But here (pictured above) is a street that narrows to around 6 meters and has buildings that are probably 2.5-3x the width of the right-of-way. Sure, it also happens to be beautiful, historic, and Italian. But what would happen if you maintained this same beauty and made the street 5x as wide and lined up parking in front of the stores?
Somehow it wouldn’t be as enjoyable as what you see here.