Month: June 2015

• Why I write something every single day, even if it’s garbage

  I was out for brunch last weekend with a few close friends from high school. It’s a “monthly reunion” that happens nowhere close to every month. But the hope is certainly there.

  During brunch the topic of my blog came up. And one of my friends asked me how I got started and how the hell I keep up with one blog post every single day. (I get that second question all the time.)

  I’ve written about this before, but I think it’s worth revisiting.

  Earlier this week venture capitalist Fred Wilson wrote a post on his blog called The Blank Screen. And I really liked how he described the experience of writing a daily blog post:

  Sometimes this process produces great insights for me and possibly others. Sometimes it produces garbage. But I’ve come to realize that the daily post, and its quality or lack thereof, is not really the thing. It is the ritual, the practice, the frequency, the habit, and the discipline that matters most to me. And, I would suspect, the same is true of the readers and commenters who frequent this blog.

  Fred’s blog was a major source of inspiration for me. I saw him doing it. I saw the value he was getting out of it. And I wanted to do it too. So I did, almost 2 years ago. 

  But he also inspired me in another way.

  Venture capital and real estate development share many similarities in my mind, even down to the way that deals are often structured with preferred returns and promotes.

  But the interesting thing about venture capital is that it went from a largely closed and “ivory tower” kind of industry to now one where almost every venture capitalist blogs, tweets, and strives for greater transparency (when possible).

  I thought this was a fascinating shift and it made me think that the exact same thing was bound to happen in real estate development. So I am trying to make that happen. Hopefully this blog is helping.

  2015.06.20

• How immigration shaped Toronto and New York

  One of the things that Joe Berridge reminded me of in his talk yesterday, is that the story of Toronto is really the story of immigration. 

  In his words, Toronto has become the success story that it is precisely because we are good at taking in lots of immigrants and making them economically productive. 

  Sure, there are many things that we could be doing better, but you don’t get to be the most multicultural city on the planet without doing a lot of things right. More than half of this city is now foreign born. The term “visible minority” is quickly expiring.

  

  And more than anything else, this accomplishment is arguably what has allowed us to become the global city that we are. Click here for a fascinating chart from the Toronto Star that allows you to see the number and source of immigrants that have come to this city over the last half century.

  But of course, Toronto is not alone in this accomplishment.

  Urban economist Edward Glaeser wrote a great essay back in 2005 called Urban Colossus: Why is New York America’s Largest City? It’s an incredibly interesting read for those of you interested in cities and so I definitely recommend it.

  But the crux of his argument is that New York is the largest and most dominant city in America because of geography – specifically its deep harbor – and because of its success in manufacturing.

  What this meant is that New York became the center of shipping in the country and the point of entry for the majority of immigrants coming into the United States. But since transportation costs were still relatively high at the time, most immigrants arrived in New York and stayed in New York.

  Luckily, New York had a robust manufacturing economy – notably because of sugar refining, publishing and printing, and the garment industry. This allowed the waves of immigrants flooding into New York to become economically productive.

  From 1850 to 1920, the population of the New York grew about 800% from roughly 700,000 people to over 5.6 million people.

  So the moral of the story is simply that immigration has and will continue to play a pivotal role in the shaping of our cities. Canada has a sub-replacement fertility rate somewhere around 1.61 births per woman (2012). This is lower than that of United States, which is around 1.88 births per woman.

  That means that without immigration, we do not grow. We shrink. And that’s usually not a great thing for economies.

  2015.06.20

• 7 ideas and lessons for global cities

  Today I had the pleasure of attending a really great talk by Joe Berridge (partner at the planning firm Urban Strategies) that was all about how Toronto can best maintain its position as a globally competitive city. 

  He went through 7 ideas/lessons. Though they were specifically aimed at Toronto, most of them could be applied to any city that’s concerned about its position on the global stage. They are:

  1. Invest in infrastructure, such as transit, airports, and so on. Sustainable funding and proper governance are critical. Transit planning in Toronto has become far too political and it’s crippling our city.
  2. Embrace Uber and get them using our Presto card so that it becomes a legitimate part of the city’s public transit network. Every city in the world is battling with Uber. Toronto has the opportunity to take a leadership position.
  3. Build a new convention centre and invest more in tourism and economic development. Berridge’s suggestion was something big at Ontario Place/Exhibition Place.
  4. Build new Universities to fuel the knowledge economy. See New York’s Cornell Tech campus as an example.
  5. Invest in infrastructure and institutions that turn research and development into businesses. Platforms like MaRS.
  6. Start thinking big. This was specifically geared towards Toronto, as his argument was that we do a lot of the small things right, but we’re missing out on the really big opportunities.
  7. Create Suburban Enterprise Zones to help drive employment outside of the core and along new transit corridors.

  Alongside these ideas and lessons, there was a fascinating sub-argument. And that is that Toronto is really an accidental global city. In other words, we didn’t set out to become a top 10 global city and one of the fastest growing cities in the developed world.

  But by getting a lot of things right – such as a high quality of life – and through a bit of luck – such as Montreal shooting itself in the foot – we somehow became one. But we absolutely shouldn’t take that for granted. There’s lots of work to be done.

  2015.06.19

• The PRESTO Push

  

  Back in 2004, I spent a summer living in Asia. And one of the things that I remember really standing out for me was Hong Kong’s Octopus card. It’s a refillable card that you just tap to get onto transit. Lots of cities have them.

  But the cool thing about the Octopus card was that you could use it so many other places besides just on transit. I don’t know know what it’s like today in Hong Kong, but I remember also using it in taxis and to buy breakfast in the morning at Pret a Manger. That was pretty incredible for 2003.

  This was also great for me because I’m one of those people that dislikes carrying around paper money/change. I almost never spend my change and so it just ends up just accumulating in a container beside my front door. Here in Toronto we also use microscopic transit tokens, so that adds another layer of inconvenience.

  But that’s all changing.

  Toronto now has its own version of the Octopus card and it’s called PRESTO. Technically it launched in 2009, but I only recently noticed the card readers appear at my home subway station (King Station). So tonight I decided to finally pull the trigger and order a card. I’ve been waiting 11 years for this moment 🙂

  And I was doing that, I noticed this message on the website:

  

  Not surprisingly, we seem to be pushing to get PRESTO rolled out before the world comes to visit. And I think that’s a great thing.

  One of the big benefits of hosting an event like the Pan Am Games or the Olympics is that it creates a hard deadline to get things done, which is something governments often need. It’s a bit like tidying up before guests come over for dinner. You find a way to do it before people arrive.

  There’s a lot of debate about whether or not it makes sense for cities to spend the money on playing host city. But I don’t think we should ignore the fact that they can be a great catalyst for city building. Things get done. And oftentimes done is better than perfect.

  Good news: I’ve been told that the PRESTO system will be compatible with mobile phones and near field communication. Because let’s face it, cards won’t be around that much longer.

  2015.06.18

• 11th Annual Land & Development Conference

  Today I spent the day at the 11th Annual Land & Development Conference here in Toronto. I found it particularly good this year, but it’s now late, I’m tired, and I want to go watch game 6 of the NBA finals. So I think this is going to be a fairly short post.

  Here’s a summary of some of my key takeaways from the day (a lot of it is Toronto-centric):

  • Increasingly, the commercial and residential sides of the real estate development business are converging. And it’s being largely driven by the focus on urban intensification and mixed-use.

  • This is leading to an “institutionalization” of the residential side, which has historically been the domain of smaller private/local companies and rich families.

  • Merger is creating complexity around asset valuations: Is it about the income (cap rates) and/or the future development potential?

  • Low rise house prices in Toronto continue to skyrocket. Supply is highly constrained. This has been the story for a number of years now.

  • High rise condo prices in Toronto continue to be more or less flat (modest increase). The industry is going to need to figure out how to work with and compliment the current surge in rental apartment development. There is an element of competition between the two asset classes.

  • According the RealNet’s new home price index, the spread between low-rise and high-rise housing in the Greater Toronto Area widened to $326,659 as of this past April (2015).

  • Rental Apartment Case Studies: Motion on Bay by Concert Properties (Bay and Dundas) was underwrote at $2.60-2.80 psf rents back in 2009. Rents are now in the $3 range. The Heathview by Morguard (Bathurst & St Clair) had $2.80-2.90 psf rents in its pro forma. It achieved and beat these numbers.

  • There’s a flood of Asian money coming into (1) Vancouver and then into (2) Toronto looking for development projects. There appears to be a lot of impatient and/or dumb capital out there. Challenge remains finding good development sites.

  • Vancouver is well ahead of Toronto in terms of transit oriented development. The initial intent in Ontario was to create a link between the greenbelt that surrounds Toronto + land use (intensification) + transit. But we haven’t been doing a good job of building transit and developing around it. This ties in nicely with a post I wrote called: The case for planning transit around minimum population densities.

  I will end by saying that I found there to be greater transparency at today’s conference. There was a lot of talk about deal specifics and I don’t remember seeing this much detail at past conferences. 

  Maybe I just wasn’t paying attention closely enough before or maybe the industry is slowly becoming more transparent. I hope it’s the latter.

  If you were there today and I missed something groundbreaking, please share it in the comments below!

  2015.06.17

• Visit Apartment N°50 in Marseille next month

  

  Completed in 1952, the Unité d’habitation in Marseille, France (more specifically known as the Cité radieuse) is one of the most famous buildings by Swiss-French architect, Le Corbusier. Every architecture student learns about it at one point or another.

  It’s famous because it was a model for a new way to live and build cities. Le Corbusier envisioned the apartment building as a kind of vertical city. The corridors weren’t thought of or referred to as corridors, they were instead called streets and lined with shops and businesses.

  Of course, Le Corbusier later became famous for inspiring an entire generation of buildings that many people now hate. Some believe he was completely misguided and others believe we simply bastardized his intents. But whatever the case may be, he certainly had a profound impact on cities.

  So if you happen to be in Marseille between July 4 to 19 (2015), you should check out an installation at the Unité d’habitation called Apartment N°50.

  It’s an installation put on by Jean-Marc Drut and Patrick Blauwart. They are the owners of Apartment N°50 and, since 2008, they have invited a designer or studio to come in and renovate it on an annual basis. They then open it up to the public during the summer. I think that’s a really neat idea and would love to visit sometime.

  Click here for the official Apartment N°50 website (it’s in French). The image at the top of this post is from Curbed.

  2015.06.15

• Are there enough nerds in Miami?

  

  I was browsing through my online reading list this morning (as I do every morning), and I stumbled upon this Dezeen article talking about a big new 6.5 million square foot development being proposed in Miami’s Park West neighborhood. 

  The goal of the project is to transform Miami into “Florida’s Silicon Valley.”

  This sort of thing is happening all around the world. From Buffalo to Lisbon, cities everywhere are betting on tech, startups, and entrepreneurship to grow their economy in the 21st century. And I personally think that’s really exciting.

  But as I was reading the article, I couldn’t help but think of an old essay that Paul Graham wrote back in 2006 called, How to be Silicon Valley. (Paul Graham is a famous Silicon Valley entrepreneur/investor).

  In his essay Graham argues that to be or to replicate the model of Silicon Valley in your city, you basically need two types of people: rich people and nerds. The idea, of course, being that the nerds work on the cool new ideas and the rich people then fund them.

  Using this logic, he specifically calls out Miami as a city where few startups happen and as a city not likely to become another Silicon Valley. Though there’s lots of money and rich people in Miami, there simply aren’t enough nerds. In Graham’s words: “It’s not the kind of place nerds like.”

  But that was back in 2006. 

  The iPhone didn’t even exist yet. Things have since changed. Now there are successful tech companies like Snapchat (valuation north of $15 billion) that are based out of cities like Los Angeles. And I think you could argue that Los Angeles and Miami do share some similarities.

  So while it may have seemed far fetched in 2006 for Miami to become a startup hub, is that really the case today?

  Image: Dezeen

  2015.06.14

• Revisiting electronic road pricing as a way to fight traffic congestion

  

  Electric Dreamway by Jonathan Teo on 500px

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

  As disappointing as this week’s vote on Toronto’s Gardiner Expressway East was, there is one good thing that has come to the forefront and that is the will to explore road pricing. At this point, I have almost no confidence that this City Council would ever vote it in, but at least we’re talking about it. That’s better than not talking about it.

  If you’ve been reading Architect This City since the beginning, you might know that I’ve been a vocal supporter of road pricing. I wrote two posts on the topic: The case for electronic road pricing (which was based on an HBS case I did as part of my MBA) and More on electronic road pricing (which was a Lunch & Learn I did while I was at TAS).

  I continue to believe that road pricing is a highly sensible solution to big city traffic congestion. But I do think that an electronic/variable pricing model is preferable to and more equitable than a flat toll model. A variable model means that the price of using the road adjusts based on congestion levels and/or the time of day. I also think that we should use as much of the revenues as possible to fund continuous transit improvements.

  If you’re interested in learning more about this topic, check out the two posts mentioned above. I’d also love to hear your thoughts on road pricing in the comment section below. Would you welcome it in your city?

  2015.06.13

• Fun Friday: Everyone’s Upstairs Neighbors

  This week has not been a good week for Toronto city builders. So I think a Fun Friday post is in order to lighten things up around here. (I’m stealing the idea of a Fun Friday post from Fred Wilson’s technology blog – he has been doing them for years).

  Here’s a short comedy sketch called, Everyone’s Upstairs Neighbors. If you’ve ever lived with a noisy neighbor above you, this will all make perfect sense to you and I think you’ll find it hilarious. Click here if you can’t see the video below.

  [youtube https://www.youtube.com/watch?v=4IRB0sxw-YU?rel=0&w=560&h=315]

  2015.06.12

• Gardiner East vote shows that Toronto is not yet ready to be an urban leader

  

  Today is very sad day for Toronto. 

  After 2 days of debate, City Council voted this afternoon, 24-21, in favor of rebuilding the elevated Gardiner Expressway East (”hybrid” option) that runs along the city’s eastern waterfront.

  And once again, Toronto is largely divided. See above image prepared by Joel Eastwood and William Davis.

  It’s the old city of Toronto (who uniformly wanted the elevated highway replaced with a boulevard) versus the rest of the city (who for the most part voted for the hybrid).

  I can’t begin to tell you how deeply disappointed I am by not only the outcome, but also by how it happened and why it may have happened. For all of our talk about being a progressive global city, today we are clearly not that. 

  Because more than a vote on what to do with the Gardiner East, today was a vote on how we believe we should be building this city for the future. 

  When the Gardiner East was first built, the vision was one of fluid private mobility, where it would be possible to quickly circle around and across the city on an endless sea of highways. Detroit was doing it. Baltimore was doing it. Everybody was doing it.

  In other words, we were building our environment around the car. And our primary – some would say singular – focus was to ensure that the car could move unencumbered around the city. That’s why Toronto is now home to the busiest and one of the widest highways in the world.

  But despite all this, Toronto remains crippled by gridlock. And so does every other big city city in the world that has bet on cars as the solution. Why is that?

  Because that model doesn’t work.

  The I-10 Katy Freeway in Houston is 26 lanes at its widest point. It is the largest highway in the world by number of lanes. But from 2011 to 2014, commute times in some sections increased by as much as 51%. Is that because they haven’t built enough highway? How much is enough?

  By comparison let’s look at a city that has bet on transit as the solution: Tokyo. 

  The metropolitan area of Tokyo is approximately 37.8 million people. That’s more than the entire population of Canada and by most accounts is the largest urban region in the world. But despite its size, Tokyo is consistently ranked as one of the most livable cities in the world and also one of the most efficiently run.

  Interesting.

  So when I heard Councillors going on today about how a vote for the “hybrid” is a vote not to increase congestion and gridlock, it became abundantly clear that many – apparently most – people in this city still do not appreciate what it is going to take to get us efficiently moving as this region approaches 10 million people by 2041.

  This should not have been a debate about 3 minutes. That, as I’ve said before, is a red herring.

  Of course, there was lots of lip service to transit. Many seemed to agree that transit is the future. And some even went so far as to say that removing the Gardiner East and replacing it with a boulevard is the right thing to do, but that we simply can’t do it now because we haven’t made the requisite investments in transit. 

  If transit is truly what we want, then we why don’t we take the boulevard savings and put it directly into transit?

  To me it’s like saying: I really want to be homeowner, but I can’t afford it right now. So instead, I’m going spend more on rent so that I can burn through more money and make it even more difficult for myself to eventually become a homeowner.

  Because that is what happened today. 

  We voted to overspend on a stretch of elevated highway that is used by a small sliver of downtown commuters (~3%), instead of replacing it with a cost-effective surface boulevard (with similar road capacities) and then prioritizing the proven solution to urban congestion: transit.

  At the same time, we also made a number of other things clear in today’s vote. 

  We made it clear that cars matter more than our city’s public realm; that cars matter more than our waterfront revitalization plans; that cars matter more than our environment and our “efforts” to reduce GHG emissions; and, frankly, that cars matter more than our overall quality of urban life.

  I believe that cars will always be a part of our cities, but I don’t believe in putting them ahead of you and I. I guess old habits die hard. That my friends, really sucks.

  2015.06.12