Month: January 2016

• Off to the mountains

  

  I am leaving this morning for my annual retreat to the mountains. This year we are going to Park City, Utah, which we decided to do about a year ago.

  The reason we chose this particular place is because Vail Resorts spent $50 million over the offseason to merge Park City Mountain Resort with the neighboring Canyons Resort. 

  There’s now a mountain-to-mountain gondola and 7,300 acres of skiable area across the two resorts, which makes it the largest ski resort in the United States. And that’s why, this month, the New York Times named it one of the 52 places you need to visit in 2016. 

  But it’s not all puppy dogs and ice cream. What kickstarted this transformation was that the previous operator of Park City, Powdr Corporation, actually forgot to renew its sweetheart land lease.

  So if you’re at all interested in skiing, snowboarding, real estate, and/or lawsuits, you might be interested in what happened here. Curbed did a summary of the battle last year. It was big news in the ski world.

  Image via the New York Times

  2016.01.30

• Amsterdam is about to host the first Night Mayor Summit

  

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

  What is a night mayor, you might ask?

  Well, just as the name suggests, a night mayor is the chief executive officer of a city’s nighttime activity. And in 2014, Amsterdam became the first city ever to have one.

  Why is this important, you might ask?

  Well, for most cities the night is a blindspot. It’s viewed as something that needs to be carefully controlled as opposed to something that is celebrated and leveraged. Amsterdam saw this opportunity and, in my opinion, is now at the forefront of rethinking the night.

  Here’s an example of the kind of changes that this has meant for the city (via CityLab):

  “Until recently, Amsterdam enforced what by continental European standards is a fairly strict curfew: nightclubs had to close by 4 a.m. on weekdays and 5 a.m. on weekends. The city often had problems with noise and disorder at the exact moment when all the clubs closed, filling narrow inner city streets with rowdy people.

  To solve this problem, the night mayor suggested not less, but more time for people to go clubbing. He has helped push through the granting of 10 24-hour licenses for nightclubs. Crucially, all of them were located not in the dense city center but in thinly populated districts around Amsterdam’s outer ring road. The result was a marked reduction in street noise.”

  Some of you are probably feeling skeptical as you read this. Especially since 4AM and 5AM hardly seem strict when compared to other cities (Toronto’s last call is at 2AM). 

  But I would not underestimate the importance of what Amsterdam is doing. We are living in an era of the 24-hour global city and it’s about time that governments woke up to that. I’m sorry Toronto, but 2AM is an absolute joke.

  The night can be your competitive advantage in attracting human capital. As the CityLab article cited above suggests, a big part of what transformed Berlin into a capital of cool was its nightlife. 

  I wholeheartedly believe that and I have no doubt that the night will start to become a greater focus in city building.

  If you’d like to learn more about the Night Mayor Summit, click here.

  2016.01.30

• Top 20 cities for venture capital investment

  The Martin Prosperity Institute here in Toronto recently published a new report that looks at worldwide venture capital investment by city. The report is called Rise of the Global Startup City.

  The data is from 2012, because that’s what was available from Thomson Reuters, so keep in mind that there might be some variation in the rankings if we were to look at more recent data. Some of the cities sit fairly close.

  Nonetheless, here are a few of the broader takeaways (from the report page):

  “The United States accounts for nearly 70 percent (68.6 percent) of total global venture capital, followed by Asia (14.4 percent) and Europe (13.5 percent).”

  “Just two broad regions — the San Francisco Bay Area and the Boston-New York-Washington Corridor — account for more than 40 percent of global venture investment.”

  “Global venture investment is highly uneven and spiky — it is concentrated in a small number of large cities and metros around the world.”

  Here are the top 20 cities by total venture capital investment (in USD millions):

  

  And here are the top 20 cities according to venture capital investment per capita:

  

  Given the variation in these two lists, you realize that some cities are largely benefitting from sheer size. London, for example, drops off the list when you look at venture capital investment per capita. 

  In fact, in this second list, 19 of the 20 cities are in the United States. The only non-American city that remains is Toronto.

  2016.01.28

• Maximize your space with square foot hours

  I am more than happy to trade-off living space (that I don’t really need) for a better location. It means I get the benefit of driving less and enjoying the city more.

  But as more of us move to urban centers, we are finding ourselves having to do more with less space. Often this means creating flexible and multi-purpose spaces.

  One strategy for this that I really like – which I just learned about through 5 Kids 1 Condo – is the idea of square foot hours. Here’s how it works:

  “The concept behind ft²hours (square-foot hours) is to add a time-based measurement to how we assess and use our space. So if your 10′ x 12′ bedroom is used only eight hours a day (i.e., when you’re sleeping), your actual usage is 120 ft² divided by three (one-third of the day), which is just 40 ft²hours of used space.”

  In many ways, this happens intuitively. If you really want to maximize a space, you figure out how to use it more often throughout the day. But I like the idea of applying some math to it.

  Of course, this runs counter to the notion that some spaces should be reserved for specific uses. In the case of a bedroom, it’s sleeping and sex. This is so that your mind doesn’t start associating it with things like work, which might start to disrupt your quality of sleep. But perhaps that’s about to become an anachronism in the modern city.

  Without having the above formula in mind, I have thought along similar lines for my own apartment.

  When I think about where I spend most of my waking hours, it’s bouncing between the kitchen and the living room. And yet my kitchen isn’t up against the windows; it’s recessed towards the back. Instead, my bedroom – where the blinds are almost always drawn – got the windows. (Access to light is a code requirement.)

  If it were up to me, I would have flipped my bedroom and the kitchen. But typically in the real estate world, “recessed bedrooms” are considered less desirable. 

  I don’t think I’ve heard many people complain about a recessed kitchen, but maybe that will change once we start thinking more about things like square foot hours.

  2016.01.28

• The Business Blockchain Series

  I just backed this project on Kickstarter.

  https://www.kickstarter.com/projects/wmougayar/the-business-blockchain-books/widget/card.html?v=2

  I haven’t backed a lot of projects on Kickstarter, but I definitely enjoy the process of discovering a project that I’m interested in and then providing a small, seemingly insignificant, sum of money to help make it a reality.

  In this case, it’s a collection of two books by William Mougayar about Bitcoin, blockchains, cryptocurrency, and decentralization.

  These are all topics that I’ve touched on before on this blog, albeit with much less rigor than what I’m sure William will be applying to his books. I wrote this post about 2 years ago, when I first started wrapping my head around Bitcoin. And more recently, I wrote posts about how the blockchain could transform home buying and how Honduras is building a decentralized land registry system using the blockchain technology.

  So while at first glance it may seem like these books having nothing at all to do with city building and real estate, I am betting that they will over the long term, which is why I am doing my homework today.

  Here’s a snippet from William’s Kickstarter page:

  “The fundamental characteristics of blockchains are puzzling to consumers, corporations, governments, policy makers and regulators, because their implementation challenges centrally orchestrated trust, and enables a new kind of trust: one that is distributed, decentralized, from peer to peer, and not centrally managed by any single entity. Take any service, and add “without previous center-based authority”, and replace by “peer to peer, trust-based network”, and you will start to imagine the possibilities.”

  If all of this isn’t enough to pique your interest, then you should also know that William is from Toronto. Great things come out of this city 🙂

  2016.01.27

• The decline of US homeownership

  Charlie Gardner (aka the Old Urbanist) recently published an interesting pair of posts (here and here) about the decline of homeownership in the United States.

  What really stood out for me, though, was this chart (showing the percentage of household real estate equity):

  

  And this conclusion:

  “The implied conclusion here, that a dramatic expansion of debt has been necessary just to maintain the illusion of a stable homeownership rate (setting aside the explosion of debt in the 2000s necessary to support an increase in homeownership), puts an even more negative spin on the figures from the preceding post.  In short, a decline in homeownership has until the past few years been masked by shifting demographics and an increase in household debt.”

  What I would now be curious to see is the above chart in terms of household equity value. Because I wonder to what extent rapidly appreciating home prices (as a result of cheap credit) are having an offsetting affect on declining equity percentages.

  2016.01.26

• UberPOOL is the new networking tool

  

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

  UberPOOL launched in Toronto last week. It was tested in Toronto last summer and it’s been available in other cities for awhile, but now it’s officially here.

  If you’re not yet familiar with UberPOOL, it basically allows you to share your ride with other people who are headed in the same direction. I’ve heard some people on Twitter complain about route inefficiencies, but I’ve had only positive experiences with it so far.

  The disadvantage of this system is that it’s a bit slower. You’re stopping to pick up other people on the way. But the advantages of this system are twofold. First, it’s cheaper, which means it’s already starting to eat into my transit usage. And second, you get to meet new people everywhere you go.

  This second piece is really interesting to me, because I place a lot of emphasis on getting to know as many people as I can. That’s one of the reasons I blog every day and one of the reasons I spend a lot of time on Twitter. I get exposed to people that I might otherwise not meet. And I believe there’s huge value in that. I want to sit down and have a coffee with everyone. (Time doesn’t always allow that to happen.)

  Because since the beginning of cities, personal connections is one of the things that has made urban life so valuable. Here’s an excerpt from a CityLab article published back in 2013:

  “If you look at the interaction patterns of cities,” Pan says, “You will see that they grow super-linearly with population with the same growth rate as productivity, as innovation, as crime, as HIV, as STDs.”

  All of those facets of urban life have appeared until now to share a somewhat mysterious mathematical relationship. But this research suggests that this particular super-linear growth rate is directly tied to how dense cities enable us to connect to each other. As cities grow, our connections to each other grow by an exponential factor. And those connections are the root of productivity.

  “What really happens when you move to a big city is you get to know a lot of different people, although they are not necessarily your ‘friends,’” Pan says. “These are the people who bring different ideas, bring different opportunities, and meetings with other great people that may help you.”

  Clearly there can also be some negative externalities associated with urban life – such as crime and disease. But it’s also clear that for a many people, the benefits far outweigh the potential negatives. Big cities tend to make us more productive. And as we’ve discussed here before, they can also bring us happiness in ways not associated with economic success.

  If you’ve used UberPOOL before, I would be curious to hear about your experiences in the comment section below.

  2016.01.24

• Why Google is worried about being welcoming to employees who want to build new businesses

  Here on ATC, we’ve talked a lot about the changing nature of work and what that could mean for cities. 

  We talk (and debate) about the value of density and of being in close proximity to others so that ideas can percolate – whether that means open office floor plans or community coffee shops.

  But alongside all of this, there are some fascinating structural changes taking place within organizations. Below is an excerpt from a recent New York Times article called, How Larry Page’s Obsessions Became Google’s Business. 

  But corporate success means corporate sprawl, and recently Google has seen a number of engineers and others leave for younger rivals like Facebook and start-ups like Uber. Mr. Page has made personal appeals to some of them, and, at least in a few recent cases, has said he is worried that the company has become a difficult place for entrepreneurs, according to people who have met with him.

  Part of Mr. Page’s pitch included emphasizing how dedicated he was to “moonshots” like interplanetary travel, or offering employees time and money to pursue new projects of their own. By breaking Google into Alphabet, Mr. Page is hoping to make it a more welcoming home for employees to build new businesses, as well as for potential acquisition targets.

  What I find interesting about the statements I’ve bolded is that they represent a radically different approach to business and employment. Of course, it’s not really a new thing. Google has been encouraging its employees to work on personal projects since, I think, the very beginning. 

  But as you read the above article, you really get the sense that Page believes that this kind of organizational culture is fundamental to the long term competitiveness of the company. It’s something he is genuinely worried about.

  As counter intuitive as it might seem to encourage employees to work on other things besides the core business, one could argue that it’s almost essential in a world of rapid and constant innovation. Would you rather an employee or a competitor discover what’s next in your industry? If it’s the former, you have a chance of absorbing it into your current business. If it’s the latter, you’re already too late.

  If you go back to the article I posted earlier this week, you’ll see that creative destruction is happening a lot faster than it did in the past. The average life span of many, or most, companies seems to be decreasing.

  

  The tech sector seems to be ahead of most other industries with respect to this kind of thinking. But I believe that it will continue to percolate through the economy. And when it does, it will probably have many impacts on the kinds of spaces we design and build in our cities.

  2016.01.23

• To connect rather than isolate

  

  When I was
  a kid growing up in the suburbs of Toronto, I never played in the backyard. I
  played in the streets. That’s where all the kids came together.

  We would
  play baseball in somebody’s driveway, using one of the garage door “squares” as
  the strike zone. We would play football on corner lots, where it was tackle on
  the grass and “two-hand touch” on the street. And we would wax our curbs so
  that we could skateboard them.

  None of these
  spaces were ever really intended for baseball, football, or skateboarding, but
  we kids repurposed them.

  As people,
  including families, continue to move into urban centers around the world, I
  have no doubt that the next generation of children will once again repurpose
  spaces for play. But that doesn’t mean that we don’t have work to do when it
  comes to properly preparing our communities for people of all shapes and sizes.

  One of the
  most interesting design challenges facing us today has to do with our towers.

  Architects
  have long been obsessed with the idea of vertical villages. Le Corbusier’s Unité
  d’habitation in Marseille had two shopping streets embedded within the tower
  that were intended to act as public spines. I don’t know how well they did, but
  it was a highly progressive idea for the time.

  Following
  on this idea, I was recently watching a
  TED talk with architect Ole Scheeren (thanks Mariane) and I was fascinated
  by his obsession with breaking down the raw verticality of towers.

  His belief
  was that, yes, cities are and will continue to become more dense through tall
  buildings, but that most towers isolate rather than connect people. His work strives to do the opposite.

  And this
  one of the big trends that I think we will see more of in our cites. We will see
  new forms of urban connectedness and a blurring of private, public, and
  semi-public spaces. Screw Euclidean zoning.

  On that
  note, I am reminded that I owe the ATC community a post on my predictions for
  2016. I hope to get that out shortly.

  Diagram via Büro Ole Scheeren

  2016.01.22

• What technological deflation could be doing to the economy

  Earlier in the week, I came across this post (via Fred Wilson), arguing that rapid technological progress is causing systemic deflation in the broader economy.

  Here’s a chart that illustrates the author’s point:

  

  What is happening here is that despite advances in technology and increases in productivity, real wages have been stagnant for decades. (This chart is for the US, but it likely applies to many other countries.)

  This is an interesting paradox. For a long time, increases in productivity were met with corresponding increases in income. So why the divergence?

  The author believes that it’s because the gains brought about by “extreme technological progress” are being unequally applied to the economy. In other words, they do not benefit the majority of people. He then goes on to argue that we could be entering an entirely new macroeconomic era: 

  “Economic growth may be over soon, at least in absolute terms. On the other hand that will be at least partially offset by the technological deflation. So instead of the decline of the innovation it will be just the opposite, the explosion of the innovation that will turn the economy to the decline. And moreover, it will not be a tragedy since we will be able to produce higher standard of living with fraction of the GDP today. Few adjustments needs to be done into our economic system to cope with the change for sure.”

  When you read things like this it makes the idea of a “basic income guarantee” seem far more palatable.

  The other chart that stood out to me was this one below, which shows the declining cost of solar panels and the rise of global solar panel installations. 

  

  It’s a great reminder that it’s only a matter of time before we wean ourselves off of oil. And, that we could be headed towards some sort of third industrial revolution where the marginal cost of energy is almost zero. Already about 25% of Germany’s electricity comes from renewables.

  On that note, I am going to end with a fantastic interactive chart from The Economist (screenshot below) that outlines oil reserves around the world by country. If you click through to their website, you can then toggle the price of oil (per barrel) to see how much of those reserves are actually viable.

  

  With the price of oil where it is today ($27.88 per barrel as of January 20, 2016), there are only a handful of countries with profitable oil. I am sure you could have guessed which ones.

  What will happen if, or should I say when, that oil is no longer needed? 

  2016.01.22