Brandon Donnelly
Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly.
Brandon Donnelly
Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly.
This recent article by Inga Saffron in the Philadelphia Inquirer is behind a paywall and so I, admittedly, haven't read it. But it seems to cover a common urban dilemma: Center City Philadelphia has too many surface parking lots while simultaneously having a need for more housing. The problem, as the argument goes, is that the city's tax system is under-assessing vacant land, creating an incentive to sit on it, and a disincentive to develop new housing. The solution: tax land more; tax improvements less.
(Forgive me if this isn't entirely accurate with Saffron's position.)
It's a classic "stick versus carrot" approach. Let's beat landowners and developers into building more housing. Now, in some situations, I can see the allure of this line of thinking. If we're talking about someone who has owned a surface parking lot for many decades and it's generating a nice stream of cash, there might be little incentive to develop it or sell the land to someone who will develop it. But as a general rule, I believe that carrots are far more productive than sticks.
I have at least two concerns with trying to tax landowners into compliance. One, you have to be careful not to create a double-edged sword. Taxing based on the "highest and best use" can work to suppress some of the small businesses that make cities great. For example, should a site with a local bookstore in a small heritage building, or a mom-and-pop restaurant in a single-storey building, be forced into higher-density housing? I don't think so.
Two, blaming low taxes for the lack of housing can distract from the more fundamental question: Why aren't more developers building housing if there's a need and an availability of land? When I lived in Philadelphia during grad school, I remember developers telling me the following: "The thing about Philly is that the build-costs are the same as New York (Philly is a strong labour union city), but the rents you can command are obviously nowhere near the same." Sticks don't work if the math doesn't math!
I don't know how the market has evolved since the late 2000s, but I do know that developers want to develop. And they will do so if the economics make sense and the right carrots exist.
In April of 2025, a bill was introduced in Washington, DC, called the One Front Door Amendment Act. It aims to do what many cities are now working on or considering, which is to allow single-stair/egress buildings up to six storeys. This, as most of you know, is very common throughout the world. It's a key ingredient in fine-grained infill housing, but it is generally not permissible in Canada and the US above certain build heights. In DC, I understand the current limit is 3 storeys.
The bill had its first Council reading last month and it passed unanimously (13-0). There is the small problem of there being no funding to enact the bill (it was passed "subject to appropriations'), but I call that a minor detail. The deadline for the Department of Buildings to issue new rules is July 1, 2027, which means this is how long they have to find the money and then do the technical work required to allow these new single-stair buildings. It's not done yet, but from the outside, it appears to be progressing.
Now the obvious question becomes: what the hell is taking Toronto so long? What is our deadline for implementation? As far as I know, there isn't one. (Please correct me if I'm wrong.) We now permit 6-storey apartments along all "Major Streets" in the city — from a planning perspective, at least — except the economics do not work at scale, and the requirement for two exit stairs remains one of the major obstacles. Enough with the navel-gazing. Let's get building, Toronto!
This recent article by Inga Saffron in the Philadelphia Inquirer is behind a paywall and so I, admittedly, haven't read it. But it seems to cover a common urban dilemma: Center City Philadelphia has too many surface parking lots while simultaneously having a need for more housing. The problem, as the argument goes, is that the city's tax system is under-assessing vacant land, creating an incentive to sit on it, and a disincentive to develop new housing. The solution: tax land more; tax improvements less.
(Forgive me if this isn't entirely accurate with Saffron's position.)
It's a classic "stick versus carrot" approach. Let's beat landowners and developers into building more housing. Now, in some situations, I can see the allure of this line of thinking. If we're talking about someone who has owned a surface parking lot for many decades and it's generating a nice stream of cash, there might be little incentive to develop it or sell the land to someone who will develop it. But as a general rule, I believe that carrots are far more productive than sticks.
I have at least two concerns with trying to tax landowners into compliance. One, you have to be careful not to create a double-edged sword. Taxing based on the "highest and best use" can work to suppress some of the small businesses that make cities great. For example, should a site with a local bookstore in a small heritage building, or a mom-and-pop restaurant in a single-storey building, be forced into higher-density housing? I don't think so.
Two, blaming low taxes for the lack of housing can distract from the more fundamental question: Why aren't more developers building housing if there's a need and an availability of land? When I lived in Philadelphia during grad school, I remember developers telling me the following: "The thing about Philly is that the build-costs are the same as New York (Philly is a strong labour union city), but the rents you can command are obviously nowhere near the same." Sticks don't work if the math doesn't math!
I don't know how the market has evolved since the late 2000s, but I do know that developers want to develop. And they will do so if the economics make sense and the right carrots exist.
In April of 2025, a bill was introduced in Washington, DC, called the One Front Door Amendment Act. It aims to do what many cities are now working on or considering, which is to allow single-stair/egress buildings up to six storeys. This, as most of you know, is very common throughout the world. It's a key ingredient in fine-grained infill housing, but it is generally not permissible in Canada and the US above certain build heights. In DC, I understand the current limit is 3 storeys.
The bill had its first Council reading last month and it passed unanimously (13-0). There is the small problem of there being no funding to enact the bill (it was passed "subject to appropriations'), but I call that a minor detail. The deadline for the Department of Buildings to issue new rules is July 1, 2027, which means this is how long they have to find the money and then do the technical work required to allow these new single-stair buildings. It's not done yet, but from the outside, it appears to be progressing.
Now the obvious question becomes: what the hell is taking Toronto so long? What is our deadline for implementation? As far as I know, there isn't one. (Please correct me if I'm wrong.) We now permit 6-storey apartments along all "Major Streets" in the city — from a planning perspective, at least — except the economics do not work at scale, and the requirement for two exit stairs remains one of the major obstacles. Enough with the navel-gazing. Let's get building, Toronto!
I recently came across this tweet by Patrick Collison, the CEO of Stripe, where he argues that the YIMBY movement "employs an inadvertently dishonest sleight-of-hand" when it promises "Paris-scale density" only to ultimately deliver something quite different in cities.
In the post, he shares a fairly banal mid-rise development that looks nothing like Paris, and then says that if we're talking about Paris-style building, he'd be all for it, and likely voters would be too. His point seems to be that if only we made developments more beautiful, fewer people would oppose them.
I had to read the tweet a few times to make sure I was understanding it correctly because the "Paris-scale density" language was throwing me off. Paris is not a medium-density city. It's a high-density city and generally considered to be the highest-density city in Europe. Is this the Paris promise?
I don't actually think most people want Paris; they want a city that looks like Paris, and that's because they ignore most of its urban ingredients and only focus on the two most obvious things: (1) its outward architectural expressions and (2) its modest building heights.
Paris-scale density is single-stair buildings with minimal setbacks and stepbacks, dark light wells, tiny 130-square-foot studios in the penthouse, no parking minimums, and area population densities that can exceed 50,000 people per km2. Is this what most voters want, provided they look pretty?
For the purposes of this post, let's just run with the argument that urban environments people broadly feel are beautiful would elicit less NIMBY opposition. Just build Paris-like buildings. Unfortunately, I also don't think the answer is as simple as this.
As Sam Deutsch of Better Cities points out, this runs counter to NIMBY history. Let's not forget that the Paris everyone visits today was vehemently opposed during the time of its initial development and that the city's most iconic structure was called a hateful column of bolted sheet metal, among other things.
Beautiful buildings and great places are, of course, fundamental to cities. But even then, expect turbulence along the way.
Cover photo by Deniz Bireroglu on Unsplash
Cover photo by Andy Feliciotti on Unsplash
I recently came across this tweet by Patrick Collison, the CEO of Stripe, where he argues that the YIMBY movement "employs an inadvertently dishonest sleight-of-hand" when it promises "Paris-scale density" only to ultimately deliver something quite different in cities.
In the post, he shares a fairly banal mid-rise development that looks nothing like Paris, and then says that if we're talking about Paris-style building, he'd be all for it, and likely voters would be too. His point seems to be that if only we made developments more beautiful, fewer people would oppose them.
I had to read the tweet a few times to make sure I was understanding it correctly because the "Paris-scale density" language was throwing me off. Paris is not a medium-density city. It's a high-density city and generally considered to be the highest-density city in Europe. Is this the Paris promise?
I don't actually think most people want Paris; they want a city that looks like Paris, and that's because they ignore most of its urban ingredients and only focus on the two most obvious things: (1) its outward architectural expressions and (2) its modest building heights.
Paris-scale density is single-stair buildings with minimal setbacks and stepbacks, dark light wells, tiny 130-square-foot studios in the penthouse, no parking minimums, and area population densities that can exceed 50,000 people per km2. Is this what most voters want, provided they look pretty?
For the purposes of this post, let's just run with the argument that urban environments people broadly feel are beautiful would elicit less NIMBY opposition. Just build Paris-like buildings. Unfortunately, I also don't think the answer is as simple as this.
As Sam Deutsch of Better Cities points out, this runs counter to NIMBY history. Let's not forget that the Paris everyone visits today was vehemently opposed during the time of its initial development and that the city's most iconic structure was called a hateful column of bolted sheet metal, among other things.
Beautiful buildings and great places are, of course, fundamental to cities. But even then, expect turbulence along the way.
Cover photo by Deniz Bireroglu on Unsplash
Cover photo by Andy Feliciotti on Unsplash
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