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.

Month: October 2015

  • The economic benefits of a winning sports team

    Jays Game 2 by Charles Bodi on 500px.com

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

    I was having round 1 of (Canadian) Thanksgiving dinner with my father on Saturday night and we inevitably started talking about the Blue Jays.

    As I write this post, the Blue Jays are down 2-0 in the ALDS, but by the time you read this email in your inbox (assuming you subscribe), game 3 will have already happened. Either the Jays will be on their way to a great comeback or the season will be over. I am remaining fiercely optimistic.

    But in addition to the regular sports chatter, we also started talking about the possible economic benefits of the Blue Jays winning and being in the playoffs for the first time in decades. 

    We assumed that 50,000 people buying tickets, heading downtown, and spending money on food, alcohol, parking, transit, taxis, and hotels, would be a great benefit to the local economy. And immediately I thought to myself: this would make a great blog post.

    But it turns out that the local benefits of professional sports aren’t so clear cut.

    There’s been a lot of research on public funding for sports stadiums and a lot of the research suggests that it may not be in the best interest of taxpayers. A considerable amount of the spending does not get retained by the local economy and instead gets siphoned off to the respective league and to concentrated private interests.

    But Toronto already has the SkyDome, I mean, Rogers Centre. It’s a sunk cost. So looking forward, there must be some incremental benefits.

    Well, a recent article in the Chicago Tribune asked this same question in light of the Cubs heading to the playoffs. And it turns out that it’s also not so clear cut.

    Part of the problem is something called the “substitution effect.” When a sports team starts winning (and people jump on the bandwagon), money is simply redirected away from other forms of entertainment towards sports entertainment. In other words, instead of going to see a movie or going to the museum, people go to the game.

    In fact, a 2001 study by Dennis Coates and Brad R. Humphreys called, “The Economic Consequences of Professional Sports Strikes and Lockouts”, found that during sports stoppages, 37 metro areas with professional sports franchises actually experienced no negative financial impact. And in many cases they performed better.

    Interesting.

    Having said all this, there’s a powerful sense of solidarity that takes over a city when everyone is rooting for the same team to win. And that’s hard to attach a value to.

  • Fred Wilson on where the New York tech ecosystem is heading

    Venture capitalist Fred Wilson is the poster boy for the New York tech industry. And this morning he posted an interesting video on his blog of a recent talk he did at Google NYC.

    At the 4:50 mark he begins talking about the evolution of the tech sector in New York and how it became what is probably the second most active startup hub in the United States.

    Given yesterday’s post on talent and the recent CityAge conference I participated in, I thought this video would make a great follow-up. There’s talk of lifestyle, diversity, gender equality, and talent within cities.

    Fred is heavily involved in growing and improving computer science education in New York, which is a perfect example of how cities can better leverage the people and talent they already have – as opposed to just focusing on bringing in new talent. Coding is a valuable skill to possess.

    I also found it interesting that Fred ended up in New York precisely because his wife wanted to live in New York. And that had a lot to do with all of the things you can do in the city, outside of work.

    If you can’t see the video below, click here.

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

  • Last call at the bar

    Earlier this week I attended the CityAge conference here in Toronto and participated in a panel discussion about talent. 

    The questions were all about how cities can attract and retain talent, and how they can best leverage the talent they already have. These are questions that a lot of cities around the world are thinking about.

    In my responses I talked about things like transit connectivity, which is a problem that all of us in Toronto recognize we have. But I also focused a lot on quality of life, on sense of place, and on being a cool place to live. These are important factors.

    The example I then gave is Berlin. Some say Berlin is now over. But for many years Berlin has been dubbed one of coolest cities in the world. And I personally think a lot of that has to do with the arts, culture, and nightlife scene that emerged in the 90s. 

    But this wasn’t a government initiative to make Berlin a hub for talent. It was largely a grassroots movement that took hold for a myriad of reasons, one of which was simply empty buildings that people could colonize for parties. And it transformed the place into a city that later became known as “poor but sexy.”

    That brought me to another point, which is that Toronto’s 2AM last call at the bar is laughable by global city standards. And we know that. That’s why whenever we host an event of any sort of notoriety – such as the Toronto International Film Festival – we extend it to 4AM. The people coming here from all around the world expect that.

    This may seem like a small thing. And I am sure many of you here in the city would like things to stay just the way they are. But I think we need to loosen up.

  • Multiple representation

    house by Edoardo Panella on 500px.com

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

    If you’ve ever bought a property, you might be familiar with something called “multiple representation.” It’s when one real estate agent represents both the seller and the buyer for a particular transaction. It may also be called “dual agency.”

    The reason this can happen is because, here in North America at least, real estate sales are typically done with two agents: a seller’s agent and a buyer’s agent. The real estate commissions are (directly) paid by the seller to the listing brokerage, but it’s usually split between both brokerages and agents involved in the transaction.

    However, if you’re an agent-less buyer and you happen to come across a property that you like on your own (perhaps by browsing around online), the selling agent will likely ask you to also sign a representation agreement with them. And that means entering the world of “multiple representation.”

    Here’s some of the wording that the Ontario Real Estate Association uses:

    MULTIPLE REPRESENTATION: The Listing Brokerage has entered into a Buyer Representation Agreement with the Buyer and represents
    the interests of the Seller and the Buyer, with their consent, for this transaction. The Listing Brokerage must be impartial and equally protect
    the interests of the Seller and the Buyer in this transaction. The Listing Brokerage has a duty of full disclosure to both the Seller and the Buyer,
    including a requirement to disclose all factual information about the property known to the Listing Brokerage.

    But I don’t understand how this can work.

    You now have a sole agent that is supposed to act as a neutral facilitator between (1) a party that is paying them all of their salary for the transaction (and which increases as the selling price goes up) and (2) a party that just came off the street (and where there’s no preexisting relationship).

    That’s why multiple representation scenarios always make me uncomfortable. Real estate already has too many information asymmetries for my liking and this feels like a conflict of interest in almost all of the cases. I guess that’s why they are not allowed in many states in the US.

  • Guest Post: How We Changed Toronto

    This past summer I participated in a Jane’s Walk here in Toronto, where I was the only speaker to advocate for removing the eastern portion of the Gardiner Expressway.

    After my short talk I was feeling a bit like the black sheep of the group. Either nobody felt the same way as me, or nobody was willing to speak up. Most of the other people there seemed more enamoured by architect Les Klein’s “Green Ribbon” proposal.

    But as I put down the megaphone and began walking to the next stop, a man came up to me. Truthfully, I didn’t know who he was at first, but he reassured me that it was the right thing to do. The Gardiner East should come down.

    Eventually he gave me his business card. On the front it said: John Sewell. And as soon as I saw that I said out loud: “I know this name!”

    John Sewell was a member of Toronto City Council from 1969 to 1984 and was Mayor of Toronto from 1979-1980. Today, he is a Toronto activist and has written dozens of books, mostly relating to urban issues.

    His latest book, released last month, is called: “How We Changed Toronto – The inside story of twelve creative, tumultuous years in civic life, 1969-1980.”

    And today I’m delighted to share a guest post that he has written for Architect This City. The focus of his post below is on the importance of community participation in the planning process and how it was used in this city in the 1970s.

    If you’re a developer, this post might scare you. I think there’s often the perception that communities will generally oppose any sort of development. But there are developers in this city, such as Westbank, which have been taking a more proactive approach to community consultations. And it appears to be working for them. So maybe this is something we should be talking about.

    If you have any thoughts on this, let’s have a discussion in the comment section below. I hope you enjoy the guest post. Thank you again, John.

    _________________________________

    Transportation plans, redevelopment schemes, urban expansion: municipalities address big issues like these in several different ways. A staff report can be requested; consultants can be called in; a competition can be held.

    The device used most successfully by Toronto City Council in the 1970s was a committee of citizens working directly with city staff and council members. It produced enormously successful results, as I recount in my new book `How We Changed Toronto’, but sadly it is rarely used in the 21st century.

    In 1970 City Council appointed a working committee of local residents and several councillors to create a new plan for the Trefann Court Urban Renewal Area, a neighbourhood that had been fighting the city’s plan of demolition for half a dozen years. With the help of a city planner hired specifically for this task, a new plan satisfactory to the different factions in Trefann was hammered out within a few years, then successfully implemented.

    In 1973, when the new Council pondered how to rethink a downtown designated for more office towers, it appointed the Core Area Task Force, a body of community representatives and developers, to give direction to city planners as a new approach to the downtown was devised. The result was the remarkable Central Area Plan which encouraged housing downtown and mixed uses, put an end to windy plazas, and generally created an environment that was active and felt comfortable to anyone on foot.

    In 1974, as Council faced the problem of how it would redevelop 45 acres of wasteland on the edge of the downtown, it appointed a working committee of concerned residents and councillors to give direction to city staff. It’s fair to say that no one had a good idea of how the site should be developed, but the working committee and city staff conceived a brilliant plan which was quickly executed – the first new building was under construction within two years of the working committee being established – and the neighbourhood, now known as St. Lawrence, remains one of the great successes of the latter half of the 20th century.

    From the 1980s onward, City Council has touted the idea of citizen participation, but confined that activity to public hearings on decisions recommended by staff. That generally is the practice today, although open houses have been added, as though showing people plans and getting informal comments is a good way of involving people.

    What’s lost in public hearings and open houses is the creativity that a group of committed, diverse individuals can bring to a problem when they meet together over a number of weeks and months. The members of the group know the local scene but they aren’t experts, so they must be advised by planners and other professionals about the issues they should address, the pitfalls of some options, and the trade-offs available before decisions are taken. It is an open ended process fueled by debates about different opinions, but held together by a common purpose and the realization that those around the table are playing an important role in shaping the direction of the city.

    The working committee that started meeting in Trefann had no clear idea in advance of what the plan it finally arrived at would look like. It was the same with the Central Area Plan, the St. Lawrence community, and the other processes in the 1970s which I touch on in the book. The process that the politicians, staff and residents committed themselves to made all the difference.

    One reason this kind of process is not employed much today is because too many elected figures take an ideological approach. They think they have the answers which they have been elected to implement, rather than to establish ways in which many more minds can be involved in seeking results which are widely agreed on.

    As well, city staff are not seen as independent professional advisors serving the public at large, but as a part of a corps serving the mayor and city councillors. In the 1970s in Toronto there was a clear separation between the politicians and the administration, and there were frequent (and welcome) debates on the floor of City Council between the two factions. Both were there to serve the public although they might have different ideas of how that should be done. This kind of tension was seen as entirely appropriate.

    In Toronto (and probably other cities) the situation is now even more complicated as councillors see themselves not as public servants for a few years, but rather as individuals with a lifetime commitment to holding public office. Too many members of Toronto City Council have been there for more than 15 years, and they fear that taking a principled stand on an important issue might result in the worst of all possible outcomes, their defeat. They decide not to take on the big issues.

    Toronto is currently facing significant problems.  The downtown is being overrun with new tall condo towers, for which the city does not have the infrastructure, and the new housing is not designed to meet the needs of future residents. It is the perfect opportunity for a new look at the Central Area Plan, using the same mechanisms as in the 1970s: a holding bylaw so the new plan won’t be pre-empted by development applications; a citizen-led task force including some councillors, advised by city staff. Who knows what brilliant plan an open ended process can recommend?

    Another problem is money. Toronto does not have enough money to upgrade its transit system or repair the affordable housing it owns, let alone build the new affordable housing it needs. The demands of the mayor that other governments should pay are understandably disregarded. It is time that the city had its own revenue sources, and what better than a citizen led initiative to point the way?

    It’s the same with a plan to build the affordable housing the city needs, to ensure development activity enlivens the near suburbs, to put some restraint on the continued low density subdivisions which are being unrolled far beyond the city’s borders, to restructure the megacity into something which works for the different communities within the city. These challenges all need strong citizen driven processes.

    As I recount in `How We Changed Toronto’, the 1970s really did change Toronto for the better. The city has been coasting ever since on those successes. It is time for renewal, and using the successful mechanisms from forty years ago is something worth doing.

    -John Sewell

  • City building jobs

    I get a lot of emails from readers of this blog. I try my best to answer every single one of them, but sometimes I fall behind and fail spectacularly at that. (The snooze feature in Mailbox and Google Inbox is one of the best inventions ever.)

    One of the most common emails I receive is about careers. Sometimes it’s someone looking for a new job or for advice on how to break into the industry (usually real estate development). And sometimes it’s an employer (or recruiter) with a role they need filled. 

    It’s hard to match up supply and demand when they arrive in my inbox on an ad hoc basis like this, but I have been thinking about ways I might be able to help these people out.

    So today I thought I would try something new. If you have a relevant job listing that you’d like me to distribute to the ATC community (something in architecture, planning, real estate, tech, and so on), email it to me at b@brandondonnelly. 

    If I get enough high quality listings, I’ll send them out in my newsletter. And if everyone finds it valuable, I may make it a regular feature.

  • Foursquare uses their global foot traffic data to accurately predict iPhone sales

    I am a fan and long time user of Foursquare – now known as both Foursquare and Swarm.

    Foursquare has struggled against competitors such as Yelp.com when it comes to local business recommendations. And I have less than 100 friends on my Swarm. It doesn’t seem to be that popular here in Toronto.

    But I’ve always loved the data collection aspect of Foursquare / Swarm. Even though most people don’t seem to care about that. When I check-in somewhere, such as the gym, it’ll tell me how many weeks in a row I’ve been there, whether it’s a new personal record, who else is nearby, and a host of other things.

    I’ve always felt like there was so much potential in all of the data it was collecting.

    Well the company is starting to make better use of that data. Recently they used their foot traffic data at Apple stores (I am assuming this goes beyond just check-in data) to predict the number of iPhones that Apple was going to sell globally following the launch of the 6s and 6s Plus.

    They predicted between 13 to 15 million handsets and it turns out they were right:

    This validates the accuracy of our prediction and while we’re proud of the result, we certainly aren’t surprised. Foursquare’s data is essentially the world’s biggest panel of foot traffic data — we have the best sense of the trends and patterns of the movement of people and their phones around the world.

    This is powerful stuff. If there were a way for me to be bullish on Foursquare beyond just writing this post, I would be.

  • We are all selfish bastards

    cyclist on bike lane by Axel Bueckert on 500px.com

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

    We are all selfish bastards when it comes to sharing road space and public space.

    When we drive, we complain about pedestrians jumping out in front of us, crazy cyclists who get in our way, and under-utilized bike lanes that are taking away valuable driving space and creating traffic jams.

    When we take surface transit (such as buses and streetcars), we want all the cars out of the way so that we can move more efficiently. And we complain about drivers who don’t stop to let us off and on when the streetcar doors open. (Toronto specific reference.)

    When we cycle, we complain about cars parked in the bike lanes, people who don’t look before changing lanes or opening their car doors, and drivers who honk at you because they just want you off the road and onto the sidewalk.

    And when we walk, we complain about cyclists who ride on the sidewalk (they should be on the road!), cars that don’t stop to let us go, and slow walking groups who linearly block the entire sidewalk so you can’t pass.

    We are never happy. And we automatically assume that we could do it better. (I know I’m guilty of this.)

    But here are a few things to consider the next time you’re flipping the bird to someone on the streets. Here are a few things that we do know about urban mobility.

    There is an unprecedented number of condominiums in the development pipeline right now in Toronto. For argument’s sake, let’s assume 75,000 condominium suites – many of which will be built in central areas of the city.

    At a parking ratio of 0.6 stalls per unit, which isn’t an unreasonable assumption today, that’s 45,000 new parking spots and potentially 45,000 new cars in the city. 

    If you think that 45,000 new cars will be able to get fully absorbed into the core and somehow move around in an unfettered way, then I believe you are mistaken. 

    If you think that there’s something that can be done to magically expand road capacity to handle all of these additional cars in the city, then I believe you are mistaken.

    And if you think that adding a bike lane is the only reason you are currently stuck in traffic, then I believe you are missing the bigger picture.

    Over a decade ago, we made a decision in this region to encourage building up, instead of building out. And along with that decision came a necessary rethink of how we get around. That transition is what we are living through right now.

    The other thing we know is that the 4 modes of mobility that I started this post with are ordered from least sustainable to most sustainable. 

    Electric self-driving vehicles will reduce the impacts of driving, but it will also transform it into something that feels more like transit and less like the driving we know today. That will be a very good thing.

    But I’m not yet convinced that it will solve all of our problems. To do that I think we will need to adopt a much more balanced and unselfish view of what it takes to move around a city. That, of course, isn’t always easy.

  • Why we should fight the divided city

    No man

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

    There has been and continues to be many divided cities around the world.

    Berlin had the Berlin Wall

    Northern Ireland (mostly Belfast) has its Peace Walls that still separate Protestant loyalists and Catholic republicans from each other. 

    Beirut had the Green Line, which separated the predominately Muslim side in the west from the predominantly Christian side in the east during the Lebanese Civil War. And I understand this is still the case today.

    Detroit has 8 Mile Road, which is a psychological barrier rather than a physical one, but one that still sharply separates whites (blue dots, below) and blacks (green dots, below). The image below is from Wired Magazine.

    image

    And even here in Toronto you could say that we’ve become a divided city, albeit without the civil wars or race riots that have plagued the other cities listed above. Our voting patterns suggest a real urban-suburban divide and the many ethnic groups in this city continue to concentrate themselves in specific areas.

    I’ve been thinking about this phenomenon in the context of a recent article I read talking about closed vs. open social networks. The article was talking about career success, but I think the lessons are also transferrable to cities.

    The argument made in the article is that people who are able to position themselves in open networks – that is, become the connector between diverse kinds of social groups – are more likely to succeed than people who position themselves in closed networks where they are only surrounded by people they already know and by people who are similar to themselves.

    And the reason for this is because people in open networks end up getting exposed to a broader set of viewpoints and ideas. They get a more accurate view of the world and they are able to problem solve better than those who may be coming at it from a more myopic or singular perspective.

    But the challenge with open networks, is that there seems to be an innate human tendency towards closed networks. We love what is familiar. We love what is comfortable to us. In other words, we are attracted to people that are similar to ourselves. This is known as homophily.

    So it’s not surprising that we tend to cluster ourselves in cities. Yes, there are economic benefits to doing so (known as agglomeration economies), but there’s also a certain feeling of solidarity that comes from being around other people with the same view of the world. There’s no tension because everyone has the same beliefs, whether that be religion or politics or sports or what to eat.

    But just like there’s an argument to be made that successful people should try and resist the pull towards closed networks, I think there’s also an argument to be made that successful cities should try and resist the pull towards closed and divided cities.

    That’s why some people believe that tolerance is a critical ingredient to fostering creativity in cities.

  • Blogging as city building

    This past week I received 2 separate invitations to talk at events about blogging as a form of city building.

    The first is a Pecha Kucha talk being held here in Toronto on Tuesday, October 20th, 2015. If you’ve never heard of the Pecha Kucha movement, it’s basically all about rapid fire presentations. Each person gets 20 slides and 20 seconds for each one. 

    Here are the details for the upcoming Toronto event:

    image

    The second event is being held in Ottawa in the new year. I’ll write more on that closer to the date when I have more information to share.

    I haven’t yet figured out exactly what I’m going to talk about at each event, but I am starting to think about a few things.

    When I started writing this blog, it was intended simply as an outlet for my own city-related – and also personal – thoughts. Ultimately, the blog evolved into having its own mission, which is to promote the building of beautiful, sustainable, and globally competitive cities. And so clearly in my mind blogging was and is in fact a form of city building.

    But writing is vastly different than the kind of city building I do for a living. During the day I worry about things like rental rates, building setbacks, bulkhead locations, parking counts, and a bunch of other fun stuff.

    The two are certainly related, but the latter feels a lot more tangible. The result is spaces that people will occupy and buildings that will have some sort of impact on the overall built environment.

    But as you all know, city building is a lot more than just bricks-and-mortar. It is political. It is emotional. It is subjective. It is ego-driven. And it is so many other things. Because of this, words do have a role to play in shaping the cities we live in. And hopefully my words are having some kind of positive impact.

    At the same time, I see myself as simply part of a larger set of trends that are happening in both city building, as well as in many other sectors. Trends around transparency, decentralization, and the democratization of information.

    Technology today allows us to connect at zero marginal cost. And that is empowering people like me to self-publish, people to crowdfund real estate development projects, people to crowdsource community feedback for projects, and to do many other exciting things that weren’t possible before. Without this blog, most of you reading this right now would have absolutely no idea who I am.

    So I guess I kind of do know what I’m going to talk about.