Month: February 2018

• InsurEye acquires the Dirt

  Back in 2013, my friend Mike Lerner and I designed, developed, and launched a condo review platform called the Dirt (thedirt.co). It’s hard to believe that it’s already been five years.

  Our mission was to empower real estate consumers through greater transparency in the marketplace. And we did this by crowdsourcing condo building reviews, as well as pricing comps.

  Today we are excited to announce that InsurEye Inc. has acquired the Dirt. InsurEye began as a moderated insurance review platform for home, auto, and life insurance, but it has since grown to include condo reviews.

  The team at InsurEye shares a very similar goal of creating greater transparency in the marketplace, and so we are thrilled that they will be picking up where we left off.

  Press release, here.

  P.S. The Dirt is the reason why I started the daily blog that you are reading right now. I started writing for the company and fell in love with it as a discipline and practice. Life is lived forwards, but understood backwards.

  2018.02.28

• A sensible purchase price

  “Investing is an activity in which consumption today is foregone in an attempt to allow greater consumption at a later date. “Risk” is the possibility that this objective won’t be attained.” -Warren Buffet

  Warren Buffet published his annual letter to Berkshire Hathaway shareholders this past Saturday. I always enjoy reading his letters and I have been doing it for years. If only he wrote a daily blog.

  One of the things he talks about in this year’s letter is why Berkshire wasn’t very acquisitive in 2017:

  In our search for new stand-alone businesses, the key qualities we seek are durable competitive strengths; able and high-grade management; good returns on the net tangible assets required to operate the business; opportunities for internal growth at attractive returns; and, finally, a sensible purchase price.

  That last requirement proved a barrier to virtually all deals we reviewed in 2017, as prices for decent, but far from spectacular, businesses hit an all-time high. Indeed, price seemed almost irrelevant to an army of optimistic purchasers.

  Some of you in the real estate game might be feeling similarly. But he ends the section with these words of advice: 

  In the meantime, we will stick with our simple guideline: The less the prudence with which others conduct their affairs, the greater the prudence with which we must conduct our own.

  Buffet has a way of simplifying things. He also, clearly, has a way of remaining disciplined.

  2018.02.27

• Are we entering a new era of tech-driven city building?

  

  Emily Badger of the New York Times published an interesting piece yesterday talking about the tech industry’s current obsession with trying to fix cities. And there are certainly many problems to fix.

  Staying true to tech and engineering parlance, there’s lots of talk of optimization. How do you technologically optimize a city, for things such as affordable housing?

  There’s no doubt that many of you will sympathize with this statement: 

  “To planners and architects, all of this sounds like the naïveté of newcomers who are mistaking political problems for engineering puzzles.”

  But naïveté is not always a bad thing and with all of the money sloshing around in this industry, there’s also no doubt that this is likely a new era of city building.

  The article ends by quoting JD Ross, the 27-year old co-founder of Opendoor – a startup that we have discussed many times before on this blog and is now valued at over $1 billion.

  It is him saying that he wants to figure out how to put $100 million into this space as soon as he can figure out the right target to optimize for. “It’s better than buying a Bugatti.”

  Of course Sidewalk Toronto – which is mentioned a few times throughout the article – is already a perfect example of tech infiltration.

  But I think Dan Doctoroff gets it right when he posits that the real naïveté will come from disrespecting urbanist traditions.

  Photo by David Alacaraz on Unsplash

  2018.02.25

• My Piece of the City

  A friend of mine just sent out a group city builder email about My Piece of the City, which is a new documentary that is screening all weekend here in Toronto at the TIFF Bell Lightbox.

  The film is a critique on the revitalization of Regent Park, told through local residents and their efforts to stage a community musical (which happened in real life).

  The Daniels Corporation, in partnership with Toronto Community Housing, is the developer and builder for the entire 69 acre community. The Daniels Foundation also funded the musical and this documentary.

  But, despite this backing, the Globe and Mail has said that it remains a “healthy critique” of this entire process. And the trailer certainly gives you that impression.

  I am sure that this documentary will be of interest to many of you, so if you would like to grab tickets for this weekend, you can do that here.

  2018.02.24

• Become a Sidewalk Toronto Fellow

  Sidewalk Toronto is currently looking for “12 smart, creative, and caring people who are interested in the future of Toronto’s waterfront and how we [Sidewalk Toronto] can responsibly incorporate technology to improve urban life.”

  Each Fellow will complete a 2-day orientation session in Toronto; 6 days in Amsterdam and Copenhagen; 5 days in New York City and Boston; 3 days in Vancouver; and then do a final 2-day working session back in Toronto before presenting their takeaways.

  This feels like a response to the criticism that Sidewalk Toronto wasn’t doing enough to listen to the community and that it simply wanted to build a tech-infused neighborhood that could serve us more ads – but it’s cool nonetheless. 

  If you’re between 19-24 years old and you live in Toronto, you can apply here. It sounds like a fun opportunity for young city builders. I know that I certainly would have been all over it when I was in that age bracket.

  2018.02.24

• Only 2 new single-family homes sold in Toronto last month

  Altus Group just released its January (2018) sales figures for the new home market in the Greater Toronto Area.

  – 1,251 new homes sold last month. 886 of these (or 70.8%) were condominium apartments (everything from stacked townhouses to high-rises).

  – This is down from 2,429 homes in 2017 and 2,118 homes in 2016.

  – Almost half of the new home sales (609 homes) came from Toronto alone. And almost all of these (607 homes) were condominium apartments. Only 2 new single-family homes sold in the city last month.

  – Benchmark price for single-family homes was $1,229,454, which is a 19.6% increase from January 2017.

  – Benchmark price for condominium apartments was $714,430, which is a 40.8% increase from January 2017.

  That last increase really stands out. I did a double take.

  But as we’ve talked about before, low supply and high prices seem to be pushing more buyers toward condos – and larger ones at that.

  Recently we’ve been seeing an increase in both average unit sizes and prices per square foot.

  According to Altus, sales of new single-family homes in the GTA last month were the lowest for a January since before 2000.

  2018.02.23

• Global mobility index

  Below is a short video that was created by the MIT Senseable City Lab, World Economic Forum and TomTom for a study on how people move in 100 cities around the world. They call it the Global Mobility Index.

  It shows congestion levels (using real-time traffic data from TomTom), commute times, and an estimate for the percentage of trips that could be shared if people were willing to wait up to 5 minutes.

  In the case of Toronto, they estimate that 99% of trips could be shared and that it would increase average speeds by ~7.9 km/h and reduce overall traffic levels by ~44.09%.

  Their solution to solving traffic congestion is a cocktail that involves car-sharing, bike-sharing, and public transit. It’s about developing a “mobility portfolio.” Seems sensible.

  I found myself wanting more information and data after watching the video. Still, it was interesting to see what the authors describe as the “pulse of our cities.”

  If you can’t see it below, click here.

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

  2018.02.22

• Drinking on the street and the 2018 index of economic freedom

  This morning I was reading a snippet about Hong Kong changing its drinking laws in order to curb “Club 7-Eleven” and it made mention of the “country” being the freest economy in the world according to the Heritage Foundation.

  I was immediately curious and so I looked up their 2018 Index of Economic Freedom. Below are the top 10 countries. Apparently Hong Kong has been #1 for the last 24 consecutive years.

  

  The Heritage Foundation describes economic freedom as “the fundamental right of every human to control his or her own labor and property.” 

  And to measure this they look at 12 aspects of economic freedom, which are grouped into the following 4 categories: rule of law; government size; regulatory efficiency; and market openness.

  If you’re really keen, there’s also this free book that was published alongside the 2018 index. But come to think of it, this index appears to have very little to do with lax alcohol laws.

  2018.02.21

• Attract and extract

  Chris Dixon’s recent piece on why decentralization matters is currently making the rounds online. It clearly explains the first two eras of the internet and how the third era is developing as we speak. Cue decentralized cryptonetworks.

  I particularly like how he describes the relationship that centralized platforms – like Facebook – have to their users and to their complements (other businesses, software developers, creators, and so on). 

  Here are two graphs from his article:

  

  In the early days it’s all about cooperation and doing everything you can to attract users. The platform gets more valuable the more users are on it and so the immediate goal is to build up the network effects and lock people in.

  But as the platform grows, the relationship flips (top of the S-curve). In Dixon’s words, it becomes a zero-sum game whereby to continue growing the platform starts extracting data from its users and competing with its complements.

  The promise of cryptonetworks is that they will do away with many of these negative externalities, but at the same time empower the kind of sophistication that we see today with centralized platforms.

  The venture capitalists are circling because a fundamental shift in the architecture of the internet will mean disruption. I’m following it because I want to understand how it may apply to real estate and the built environment.

  2018.02.19

• Is it only a matter of time before Amazon enters the delivery business?

  Yesterday I ordered something from Amazon Prime. The guaranteed delivery time was today before 9pm, but within an hour of ordering the delivery estimate was updated and it ended up arriving on the same day about 5 hours after my order. I thought this was pretty amazing, particularly because the package was a bit time sensitive.

  Delivering to individual residences is more expensive than delivering to more centralized businesses and stores. And with the rise of online shopping, UPS now delivers as many as 31 million packages every day. Because of this, every little detail counts. 

  Last year the company started installing Bluetooth receivers on the inside of its delivery trucks. If a driver incorrectly loads a package that isn’t on their route, it pushes out a loud beep. (This is one of the many tech and data-driven projects that UPS is working on to ensure it stays competitive.)

  Previously there was no final check. If there was a rogue package on the truck, it meant the driver would have to stray from their route, coordinate a handoff, or delay the package for another day. These mishaps can really add up when you’re delivering 31 million packages in a single day.

  With Amazon squeezing delivery times and with the rumors that it’s going to start its own delivery business (to compete directly with UPS and FedEx), one has to wonder about the impact that these volumes will have on our cities. Perhaps autonomous vehicles will really become the new roaming retail outlet – ready to deliver as soon as we click buy.

  2018.02.18