Month: April 2015

• Segregation and income inequality in cities

  

  Baltimore Harbor by Wes Bunton on 500px

  Given what is going on in Baltimore and other cities in the US right now, I thought it would be worthwhile to share an interesting article from City Observatory talking about income disparity and racial segregation in cities.

  There are significant racial income gaps in the United States (as well as in Canada). According to City Observatory, the average black household earns 42% less than the average white household in America. There is, of course, lots of regional variation, but this is what it looks like nationwide.

  The interesting thing about this racial income gap though, is that there’s one factor that seems to account for the bulk (up to 60%) of the variation: residential segregation. In other words, the more segregated a city becomes, the more this black/white income disparity increases.

  Here’s a snippet from Joe Cortright of City Observatory:

  …there are good reasons to believe that high levels of segregation impair the relative economic opportunities available to black Americans. Segregation may have the effect of limiting an individual’s social networks, lowering the quality of public services, decreasing access to good schools, and increasing risk of exposure to crime, all of which may limit or reduce economic success. This is especially true in neighborhoods of concentrated poverty, which tend to be disproportionately neighborhoods of color.

  We also know that there are all kinds of negative externalities associated with income inequality. Therefore, there’s a strong case to be made for addressing segregation and the spatial organization of our cities. 

  I recommend you read the City Observatory article for a more nuanced explanation of the above relationship.

  2015.04.30

• The psychological benefits of third places

  

  – by rinatus (rinatus) on 500px

  Today I’m thinking about extraversion and third places within cities.

  As many of you I’m sure know, the idea of a third place is that after your home (first place) and your work (second place), cities have what are known as third places. This could be a coffee shop, a barber shop, or a public space (to name only a few examples).

  This, of course, is not a new idea. For decades people have been arguing that third places are essential for establishing a sense of community, place, and belonging. In fact, this emphasis on third place is one of the ingredients that made Starbucks so successful.

  But with the rise of the internet and freelancing, third places are becoming even more important. That’s why coffee shops have become arguably the best example of a third place in today’s cities. They’ve even become the new second place for some (many?) people.

  But beyond just a place to meet and socialize, I’ve been thinking today (while I was at a third place) about the psychological benefits of these spaces.

  For example:

  One of the key differences between extraverts and introverts is where they draw their energy from. For introverts, they tend to draw it from within. In order to recharge, they often feel the need to retreat and be left alone. Extroverts, on the other hand, draw their energy from the outside world. They charge up by being around other people.

  When I was completing my MBA at Rotman, one of the things they had us do at the beginning and at the end of the program was complete the Myers-Brigg personality test. 

  In both instances, I was as extroverted as they come (I am consistently what is known as an ENTJ). And from experience, I can say that I definitely feed off the energy of other people.

  But the interesting thing about this – to tie both of these topics back together – is that there appears to be a clear correlation between extroversion and a preference for living in urban centers. And given what I just said, that probably makes sense to you.

  So if you too classify yourself as an extroverted person, then third places are more than just a busy coffee shop or a vibrant public space. They are where you derive your energy and where you feel alive. And that’s a pretty powerful thing in my view.

  2015.04.29

• What will driverless electric cars mean for cities?

  

  T E S L A by Thomas Juel on 500px

  Yesterday I posted a video about the career of Elon Musk. And it reminded me of something that’s been on my mind as I think about transportation, cities, and the future.

  Elon’s story for why he founded SolarCity, Tesla, and SpaceX is incredibly compelling. He chose problems and industries that he felt would move humanity forward. He felt that we needed sustainable forms of energy production (SolarCity), sustainable forms of transport (Tesla), and a way for humans to occupy other planets (SpaceX). That’s incredible ambition.

  Today though, I just want to focus on the transportation piece.

  Electric and driverless vehicles, I believe, are a step in the right direction. I honestly believe that at some point in the not too distant future we’re going to look back at that time when people used to drive their own cars and wonder how we ever allowed that to happen.

  But fundamentally, I think there still remains a question of how best to plan our cities. 

  There’s lots of talk today about peak car and the death of the automobile. Certainly within planning and urbanist circles, there’s an almost universal belief that planning (most of) our cities around the car, as opposed to people, was a huge mistake. Multimodal solutions with a public transit backbone are now the way forward.

  But will that always be the case as the notion of the “car” evolves?

  Intuitively, driverless vehicles feels like a massive opportunity to leverage data and better optimize our private transport assets. We know that the utilization rate for most private cars is incredibly low and so there’s lots of room to improve how we use and share private vehicles and how we move people around cities.

  But how big is that opportunity? Does a city filled with driverless electric vehicles and with networks like Uber mean that public transportation now becomes less important? And if so, how much less important?

  I can’t help but feel like private and public transport are on a collision course right now. I suppose that isn’t anything new. But this time around I wonder if private transport won’t figure out a way to achieve similar efficiencies to large scale public transport.

  2015.04.28

• Bloomberg Risk Takers: Elon Musk

  Elon Musk is one hell of an entrepreneur. I just finished watching this “Bloomberg Risk Takers” video. 

  [youtube https://www.youtube.com/watch?v=mh45igK4Esw?rel=0&w=560&h=315]

  It’s about 45 minutes long, but well worth it. What’s astounding is both is willingness to go all-in and his commitment to solving big, meaningful problems. Click here if you can’t see the video above.

  Once you’re done watching, you should then read this Quora answer from his first wife talking about what it takes to be that great.

  2015.04.28

• Dublin 2007

  

  In 2007, I spent the summer working in Dublin, Ireland for a boutique real estate consulting firm called Urban Capital. (For those of you who are from Toronto and know the industry, there’s no connection between the Urban Capital in Dublin and the Urban Capital in Toronto.)

  At the time, they were working with a number of government agencies on the development of masterplanned communities, as well as on specific development projects. Real estate was booming and everyone wanted to be a part of it – including the band U2.

  But as you all know, the following year (2008) wasn’t kind to the real estate industry and, in particular, to Ireland. That year the country fell into recession for the first time since the 1980s and became labeled as one of the “PIGS.”

  I really wish I had started this blog by that point because it would be interesting to look back today on my posts from that summer and see how I was thinking about the Dublin real estate market. I remember having many Guinness-fueled discussions about whether the bull market could continue.

  In any event, the Irish economy is coming back.

  This year GDP is expected to grow by 5.4%, which would make it the fastest growing economy in Europe. National debt is also falling. At the end of 2013 it stood at €215 billion or about 123% of GDP. And at the end of 2014 it had fallen to €203 billion or about 109% of GDP. The national debt is expected to fall below 100% of GDP by 2018.

  At the same time, Ireland also got permission to pay off its bailout loans early. That’s a good sign.

  I’m thinking and reading about all of this today because I was looking through my photo collection this morning and I stumbled upon a folder titled “Dublin 2007.” The photo at the top of this post was the terrace that I had outside of my apartment in the Docklands area. I don’t think I used it once that summer. 

  And here’s a photo of my bedroom. It must have been the curtains that sold me on the apartment.

  

  I had a great time in Dublin that summer. It’s a fun and young city and I remember being incredibly impressed by the quality of city building that was going on. I’m sure that wasn’t lost in the Great Recession.

  2015.04.26

• Waterfront Cities of the World comes to Toronto

  

  This morning I was interviewed for a Montreal-produced TV show called Ports D’Attache. The English version of the show is called “Waterfront Cities of the World” and it airs on Discovery. 

  Here’s a list of all the cities they’ve visited in the first 4 seasons and here are all the shows from the first 2 seasons in English (which you can watch online for free).

  Rather than a travel show, it’s a look at the “spirit and soul” of each waterfront city through the lens of “local personalities.” There’s definitely a lot of fodder for city geeks and so I thought you all might find the series interesting.

  Toronto was the last stop of season 5. The other cities from this season include Philadelphia, Budapest, Rome, Taipei and Kuala Lumpur, to name only a few of them. 

  I’m glad that they decided to come to Toronto and I’m delighted that they invited me to be on the show. The team was great and, if you haven’t already noticed, I love supporting this city.

  The show will first be released in French (with my comments dubbed over), but an English version will follow. Once that version is released, I’ll circulate a link.

  2015.04.25

• Where are Millennials going to move when they start having children?

  

  Kembangan by Jason Waltman on 500px

  Earlier this week I attended RealNet’s Q1 2015 market update webinar for the Greater Toronto Area. If you don’t already subscribe to RealNet, you should consider it. They’re one of the best sources for Canadian real estate market information.

  During their webinars, they occasionally run interactive surveys where they ask the audience a question and participants respond using their web browser. On this particular webinar, they asked the following question, which I thought was interesting:

  What is the likely housing moving by Millennials in raising their families?

  A) Move Up – Embrace urban high-rise housing forms

  B) Move Out – Accept extended commutes (including the Greater Golden Horseshoe and Hamilton Area) to find affordable ground oriented housing
  

  C) Move In – Cohabitate parental homes

  It’s an interesting question because it’s one that I’ve asked myself a number of times. Sure, Millennials are rushing back to cities and living in high density and walkable communities, today, but what are they going to do and where are they going to move when they start having children?

  As a Millennial myself, I know that I’ve always told myself that I want to stay urban for as long as I can (i.e. Move Up). But I’m only one data point. And given the seemingly endless demand for low-rise housing in Toronto, I always felt like I was in the minority. I figured that the majority of people, at least here in this city, still want a ground-related home when it comes time to raise a family.

  Putting aside economics, I still think that may be the case for a lot of home buyers. But the majority of people on this week’s RealNet webinar (which would be almost exclusively folks from the real estate industry) either think that preference is going to change (or already has) or that consumers won’t have a choice due to affordability.

  50% of the people on the call answered A – move up and embrace urban high-rise housing forms. The balance was about 44% for B and 6% for C.

  That’s not the outcome I expected to see. So today I’d like to re-ask this question to the Architect This City Community. Where do you think Millennials are going to move once they start having children? Please let us know in the comment section below.

  2015.04.24

• First crowdfunded real estate project opens in D.C.

  

  Want further evidence that technology and the internet are going to dramatically transform many “non-tech” industries such as real estate? 

  Take a look at 1351 H Street NE in Washington D.C (pictured above). It houses a hybrid retail store and restaurant and is probably the first truly crowdfunded real estate project.

  The project was completed using a platform called Fundrise, which I’ve written about before here on Architect This City. Their vision is to completely democratize real estate investment by removing middlepeople and outdated regulations that restrict who and how people can invest in real estate.

  To accomplish this, the founders of Fundrise went out in 2011 and bought the building located at 1351 H Street NE for $825,000. The goal was for it to act as their proof of concept. 

  They then spent a significant amount of time and money figuring out how to make it legal for small and local investors to participate in the project (as opposed to just accredited investors). It was ultimately done through a “local public offering” filed with the SEC.

  So how does it work?

  In the case of 1351 H Street NE, they first went out to the local community and asked them what they wanted to see. That’s how they ended up with a unique retail store / restaurant. It’s what the community wanted.

  Once this was established, they went out and issued 3,250 shares and crowdfunded $325,000 from 175 local investors. This was for an ownership share in both the building and the future business. The average investment amount was $2,000, but people were able to invest as little as $100.

  This is an incredible accomplishment. It takes real estate investment and development to a local level and really empowers small entrepreneurs to start businesses that may have been previously unfundable by traditional sources.

  I don’t know what you think, but I think this is the beginning of a powerful transformation. Many of the structures that are currently in place were formed at a time when it wouldn’t have been practical to crowdsource ideas and crowdfund money. But now that is very possible. It was just done.

  Image: Maketto 

  2015.04.23

• Ace Hotel coming to Toronto’s Fashion District

  

  Ace Hotel, LA by Dan Hogman on 500px

  https://500px.com/embed.js

  The word on the street right now is that Ace Hotel will be opening up a location in Toronto’s Fashion District at 51 Camden Street. 

  Unlike its other outposts around the world, which entailed the renovation of a historic building, this one will be a new build. And according to HotelChatter, Shim-Sutcliffe Architects have been retained for the project.

  Already a demolition permit has been issued for the existing 3 storey office building:

  

  For those of you who may not be familiar with the Ace Hotel brand, the first hotel opened in Portland in 1999 when 3 friends transformed a halfway house into an affordable hotel for creative types. 

  Since then, the hotel has expanded to New York, Los Angeles, Seattle, Palm Springs, as well as many other cities, and has become a kind of cultural institution for the creative class.

  I’m excited that they have (allegedly) picked Toronto for their next property and I’m excited that Shim-Sutcliffe will be (supposedly) designing it.

  2015.04.22

• Art and apartments

  

  Image Source: Vancouver by Marc M on 500px

  According to a recent Bloomberg article, this is where the rich are putting their money today:

  “The two greatest stores of wealth internationally today is contemporary art….. and I don’t mean that as a joke, I mean that as a serious asset class,” said Fink. “And two, the other store of wealth today is apartments in Manhattan, apartments in Vancouver, in London.”

  In case you wondering, Laurence Fink is the founder and CEO of BlackRock Inc., which today is the largest asset manager in the world. They have over $4.77 trillion in assets under management according to their website. That’s a mind boggling number.

  And if you read the Bloomberg article cited above, you’ll see that this interest in both art and apartments represents a shift away from gold as the de facto safe haven.

  “Historically gold was a great instrument for storing of wealth,” the chairman of BlackRock Inc. said at a conference in Singapore on Tuesday. “Gold has lost its luster and there’s other mechanisms in which you can store wealth that are inflation-adjusted.”

  What’s interesting and probably most relevant to the Architect This City community though is this investment focus on apartments.

  When people talk about a possible housing bubble in Canada they often cite house prices to median household income as a key ratio. The question then becomes: How can house prices be such a high multiple relative to local incomes?

  That’s relevant, but it’s not the entire story for cities like New York, London, and Vancouver. That ratio alone assumes that real estate isn’t a global investment vehicle. And for some people people it is exactly that.

  2015.04.21