Brandon Donnelly

Daily insights for city builders, delivered every morning at 6 AM ET. I’m Brandon Donnelly — a Toronto-based real estate developer and founder of Globizen. I’ve been writing here since 2013.

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    This week at Paris Fashion Week, Saint Laurent’s creative director Anthony Vaccarello presented an open-air show in front of the Eiffel Tower that is widely rumoured to be his last show at the fashion house. (Too bad.) The set was opulent cinema. Everything was gilded — in an elegant way, not the gaudy Trump way — including the clothes themselves.

    The overall set was intended to pay homage to the historic ballroom of the Hôtel InterContinental, where Yves Saint Laurent himself used to famously present his collections. And suspended above the runway was an enormous gold chandelier that effectively created an “urban ceiling” for the space. Here’s the full show if this at all interests you.

    But this is not a post about fashion.

    One of the things that stood out to me was the obvious relationship between the glittering Eiffel Tower and the enormous gold chandelier. It’s a good example of how you don’t necessarily need walls to frame an urban space. The hanging chandelier was all that was needed to turn a public plaza into a private salon.

    At the same time, I was struck by how sexy and glamorous Paris always manages to make what is effectively a piece of raw industrial architecture. The Eiffel Tower was immediately popular with the general public at the 1889 Exposition Universelle because of its awe-inspiring stature, but elites derided it for its lack of Parisian taste. So how then did it become so synonymous with French high culture?

    One theory is that it’s because the tower is generally useless.

    In 1964, French theorist Roland Barthes wrote an essay where he argued that the Eiffel Tower became the ultimate global symbol precisely because it means basically nothing in itself, which is why it can be so easily imbued with other symbolic meaning. The Louvre is art. The Arc de Triomphe commemorates a military victory. And Notre-Dame is religion.

    The Eiffel Tower, by contrast, is empty. It’s more or less a hollow skeleton of iron. Barthes called this an “empty signifier.” In other words, it’s a blank canvas — one that has come to symbolize everything from 19th-century industrial progress to 21st-century luxury fashion. Its greatest strength may be its uselessness.

    It can be hard to predict when something might resonate in the way that the Eiffel Tower has. The so-called cultural elites certainly didn’t get it at the time. But cities desperately need these urban symbols, and what they come to mean ultimately depends on the urban context and positioning we choose to create. It’s malleable.

    Take, for instance, the CN Tower in Toronto. There is nothing inherent to its concrete form that prevents it from symbolizing high design or civic sophistication in the way the Eiffel Tower does. The difference is in the curation: at its base, we put an aquarium; Paris brings out gilded Saint Laurent.

    Saint Laurent’s show this week was equal parts marketing for the fashion house and for the city.

  • Can AI democratize property tax appeals? Doesn’t look like it.

    Property tax appeals are a routine part of owning commercial real estate. And there are lots of people who will help you with an appeal. One common way that these consultants charge for their services is as a percentage of achieved savings. This creates a low-commitment scenario for landlords and a strong incentive for the consultant to perform and get paid. The same is true for individual households, who also engage in property tax appeals. However, research shows that some groups are far less likely to appeal:

    Lower-income homeowners are substantially less likely to file an appeal. Even holding home values constant, Hispanic and Black homeowners appeal at lower rates than White homeowners, while less-educated homeowners appeal at lower rates than more-educated homeowners. These disparities are often attributed, at least in part, to differences in knowledge of the tax system, confidence in navigating the appeals process, and the ability to afford a human agent (Doerner and Ihlanfeldt, 2015).

    But what if more tools and support were provided?

    Here’s an interesting study. To test this, the researchers recruited a sample of 645 households in Dallas County, Texas and gave each of them a website providing personalized property tax information and instructions for how to file an appeal. However, half of the households were assigned to a “treatment” version of the website that included a Claude-powered AI chatbot, which was there ready to answer tax-related questions and provide personalized guidance.

    What they generally found was that homeowners liked the chatbot. 78% of those who had access to it initiated a conversation. The researchers also found that using the chatbot meaningfully increased the probability of filing a property tax appeal. The baseline increased from 41.4% to 50.5% (a 22% increase!). Importantly though, the increase in appeal filing was smaller among less-educated homeowners, those with lower-valued properties, and those from racial or ethnic minority groups. Overall chatbot take-up wasn’t all that different, but the translation into action was.

    This is interesting because it provides “suggestive evidence” that simply providing access to AI isn’t enough. In fact, it had the opposite effect in this study. Rather than reduce inequity, it exacerbated it by increasing filing rates among the already more advantaged.

  • The value of the free press

    I like this analogy from economist Justin Wolfers. Politicians are employees of the people. We are the bosses. And like with any boss, it’s impossible to know what our employees are doing all the time. But in democratic societies we have the free press, which helps us keep tabs on them.

    If our employees aren’t performing, we can then decide to fire them by voting them out. This is, of course, good for general business because bosses need to know if their people aren’t performing. You can’t manage what you don’t measure, and if the bosses aren’t managing, markets will price that in.

    I’m astonished that these are analogies that need to be put forward today in the context of the US, but it’s the unfortunate reality of the current administration.

  • An unsold condo tax misdiagnoses the real estate market

    When developers build new, for-sale housing, they are incentivized to sell that housing. That’s the business. If developers are sitting on unsold inventory — there’s an estimated 4,000 newly-completed unsold condominiums in the Vancouver region — it’s typically indicative of market conditions; meaning developers are sitting on inventory because they have no other choice, not holding inventory because they’re trying to price gouge.

    Last week, BC Premier David Eby announced that, if re-elected, his government would impose a new 2% tax on recently completed condominiums if they sit empty for more than 1 year. This would be levied against the assessed value of the property and increase by 1% for each additional year. So, by year three, the tax would be 3%.

    This would be a punitive tax that seems to suggest developers are not already incentivized to sell their housing inventory. Eby positioned the tax as a way to encourage developers to further lower their prices and sell homes at price points that people are willing to pay. While it would certainly be a “stick” for developers, why punish home builders? That’s less than optimal for long-term housing supply.

    A valuable indicator of current market conditions can be found in Ontario’s new enhanced HST rebate. It represents a meaningful cost reduction on the price of new housing and all signs point to this rebate being passed through to purchasers at or close to 100% of the value. It’s a sign that developers are not looking to price gouge. They’re trying to balance competing objectives and ultimately move their inventory.

  • Incomes caught up with inflation. So why does everyone feel broke?

    Early on in my career, I used to run development pro formas where I would assume that our costs would increase at some rate in and around inflation. Combined with a conservative contingency allowance, I used to think I was being prudent. How cute.

    The pandemic made this approach seem silly. Our pro formas did not contemplate 40-50% cost increases for certain line items. But even without these outliers, the pandemic did cause things to become more expensive than one would have expected from pre-pandemic trends. Here’s a recent chart via the Bank of Canada:

    But the cost of things is only one side of the equation. For things to be “more expensive,” we also need to look at their relationship to income, and that’s what Yaz Terajima has done here. Interestingly enough, household disposable income seems to have kept pace with the additional cost of things, at least on average.

    Between 2020-25, the average household spent about $6,500 more per year relative to pre-pandemic trends, but disposable income increased by about $7,400, creating a positive income-expense gap of about $900.

    So why, then, does it feel like things are more expensive? Well, for one thing, there is a meaningful difference across age groups and income levels. Yaz also found that younger and lower-income households did not, in fact, see their incomes rise sufficiently to cover these higher costs.

    On top of this, this study does not factor increases in overall wealth due to assets appreciating, which tend to be more concentrated among wealthier households. So the full-picture reality is almost certainly a bigger socioeconomic divide across age groups and income levels.

  • How built form drives Toronto’s modal splits

    If you’re a cyclist in Toronto, you probably know that Shaw Street is a damn good street for biking. The city first redesigned the one-way street in 2013, adding a bike lane in each direction (one of which is a contra-flow bike lane). Then in 2020, they made it so that the one-way direction for cars alternated every few blocks. This stopped drivers from using it as a high-speed shortcut. The result was an immediate increase in cycling.

    Here’s some data from Observing the City for the intersection of Bloor and Shaw:

    As of June 2025, the modal split at this intersection during peak hours was 34% bikes, 21% pedestrians, 1% trucks, and 44% cars. At times, there has been a 310% increase in cycling trips since the redesign. It goes to show you that the right street design (or the wrong one) will induce demand. If you look at the intersection counts for the entire city, you’ll see just how profoundly built form impacts behaviour. Cycling is broadly an Old Toronto thing.

  • Density by necessity

    A blog reader sent me this article by Adam Clermont arguing that “Hong Kong was a 15-minute city before the rest of the world knew what to call it.” It’s great. He was right. I did find it interesting, so much so that I subscribed without really looking at what I was subscribing to.

    Here’s an excerpt:

    There are things Hong Kong does not do well. The apartments are small. Mine is small. I have made peace with this in the way that a man makes peace with anything, which is to say, incompletely and with occasional resentment. The rents are obscene. The air quality on bad days could strip paint off a Renault. Nobody is moving here for the spaciousness. But the fifteen-minute city crowd keeps talking about access, about proximity, about the ability to live a full urban life without depending on a car. And on that score, Hong Kong is not a case study. Hong Kong is the answer key that the rest of the world keeps trying to peek at while pretending they came up with it themselves.

    His overarching argument compares Hong Kong to Paris. While Paris was busy talking and planning to be a 15-minute city — by redesigning its streets and removing space for cars — Hong Kong was already busy doing it, by accident and out of necessity.

    While it is certainly true that Paris has undergone a deliberately planned urban transformation over the last decade or two, it’s worth pointing out that we’re talking about two of the most dense cities in the developed world.

    Hong Kong is, of course, on another level of hyper density, but Paris, as we like to talk about on this blog, is also sneakily dense, despite its mid-rise heights.

    The fact that both cities might be described as so-called 15-minute cities places them in a rarified universe, regardless of how deliberately or accidentally they may have ultimately gotten there. Not all cities have the benefit of density, and Paris already had lots of 15-minuteness before it became a buzzword and it started planning for it.

    Adam has a line that “density is not a problem to be solved but a feature to be exploited,” and I would agree with this. However, the broader problem to be solved is how do you create this feature in the first place, if you don’t already have it?

    Modern cities are typically not as dense. It is almost universally true that high urban densities are the result of necessity — physical constraints and/or economic gravity. Hong Kong is an island with no place to go but up. The same is true of Manhattan.

    Paris is not an island, but it hemmed itself into practical equivalents over the centuries through fortified walls. Even today, the boundary of Paris proper is the Boulevard Périphérique, which sits where the city’s last defensive walls were built in the 19th century.

    Dhaka, to throw out another example, is hemmed in by major waterways that flood every year like clockwork. Naturally, the city focused development on higher, safer ground, though there are informal settlements that have found ingenious ways to navigate its precarious waters.

    Density may be a feature to be exploited, but it tends to happen best when there’s no other choice. That’s why Hong Kong is so good at it. The real problem to be solved is getting there when it’s not the only option.

    Photo by Antonio Sokic on Unsplash

  • Inside the post-pandemic AI investment boom reshaping San Francisco

    San Francisco’s Q2 2026 economic report is perhaps an idealized summary of how the post-pandemic, AI investment boom is transforming our cities.

    Housing Supply Crisis: Residential apartment rents grew 14% from March to July, and single-family house prices are now growing at double-digit annual rates. And yet, the city continues to see a structural decline in housing permits, below pre-pandemic levels.

    Segmented Commercial Market: The city’s office vacancy rate declined 3.7% over the past year, but the overall vacancy rate is still greater than 30%. Weekly office attendance also remains below 50% of pre-pandemic levels.

    Urban Rebound: Average highway speeds are dropping, suggesting more user demand. MUNI Metro (local) ridership is also increasing rapidly, reaching over 70% of pre-pandemic levels. But downtown BART station exits (regional rail) are below 50% of 2019 levels, reinforcing the fact that though the city is active, but people simply aren’t commuting in nearly the same way.

    Ultimately, the surge in housing prices proves that the “urban doom loop” narrative was fundamentally wrong (remember that?). San Francisco remains an intensely desirable place to live and work. But they’ve got to get moving on building more housing.

  • The gravity of bond yields

    Customarily, the “risk-free rate” is considered to be the yield generated by a stable government’s debt. This matters to real estate investors because if you’re going to make an investment and take on additional risk, then you need to be compensated for that risk — earn a spread — above the risk-free rate.

    Bond yields are also similarly the foundational benchmark for lots of financial instruments, meaning that when yields go up, so does the cost of other things, like mortgages and real estate debt.

    As of August 17, the yield on the 30-year US treasury bond closed at over 5.3%. This was a 19-year high. Howard Marks of Oaktree Capital wrote a great memo on the topic that, as always, is worth a read. Among the factors contributing to higher bond yields, he calls out inflation being “stubbornly higher than is desirable” and the US’s “total lack of fiscal discipline.”

    The point of his memo is to once again argue that we cannot repeal the laws of economics without there being consequences. He quotes investor Stanley Druckenmiller who said, “Every basis point of artificial yield suppression is a subsidy to procrastination. Governments defending prices against fundamentals always lose. The only variable is how much they spend before conceding.”

    Marks ultimately concludes: “I don’t think the U.S. can perpetually spend more than it takes in and not expect its creditworthiness to be questioned and its IOUs – its currency and Treasury securities – to be disrespected.”

    All of this suggests that real estate investors might want to be prepared for “higher for longer” financing costs. That means don’t count on cap rate compression.

  • How tax policy shapes the immigration equation

    Immigration is an exciting topic (to put it one way). Over the last few years, public sentiment around it has shifted significantly in Canada from viewing it as a positive thing to thinking there’s too much of it.

    But as John Burn-Murdoch points out in this recent FT article about the real fiscal costs of immigration, it’s important to be precise about what’s going on. Our decisions and policies guide assimilation and affect whether an immigrant becomes a net cost or net contributor.

    Here, for example, is an interesting chart showing what pay percentile a primary earner needs to reach in order to become a net contributor to the country:

    In the UK, the average couple arriving at age 30 needs the primary earner to have a salary at the 55th percentile, compared to only the 28th percentile in Germany. This is because of the relatively low tax rates for low-income workers in the UK, and flatter tax regimes in the other countries in the chart.

    This is just one example demonstrating that “immigration,” to use the words of Burn-Murdoch, is “not a fixed thing across time and place.” Who are we attracting? And what policies do we have in place to ensure people economically assimilate and become net contributors?