Brandon Donnelly

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.

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Month: February 2020

  • Rightsizing in Kits Point

    Architect Michael Green’s new house in Kits Point, Vancouver was recently featured in the Globe and Mail. He and his family went from a 3,500 square foot home in the suburbs to a 1,500 square foot semi-detached home in the city, close to downtown. The house is simple, sparsely decorated, and about 13-feet wide.

    Here’s why he decided to do it: “I didn’t want to have to commute by car any more,” he says. “I wanted to be able to bike everywhere. I also wanted my kids to be able to bike everywhere. I wanted them to develop a sense of freedom, to have mobility, something too many kids don’t get these days.”

    As we all know, there is typically a very real trade-off in cities between space and location. The further you move out from the core (a generalization), the more affordable space usually comes. But at the same time, your transportation costs also increase — both directly and indirectly if you factor your time and your quality of life.

    Depending on how you value each of these items, you might be inclined to pursue more space or pursue more reasonable transportation costs. A 2,000 square foot reduction in space might seem like a lot. But if you’re heavily weighted toward freedom and mobility, as Green clearly is, it could be a perfectly rational decision.

    Photo: Ema Peter via the Globe and Mail

  • Telling a story through spaces

    I started watching Parasite on a flight home this past weekend (I know, I’m behind). The first couple of scenes immediately hooked me and so I ended up watching the full movie over the weekend. It’s one of the most creative movies I have seen in a long time. (To be fair, I don’t watch a lot of movies these days.) I won’t spoil it all for you here, but if you haven’t seen it yet, I would highly recommend it. One of the principal themes is social inequality. And it’s interesting to see how that gets told through the spaces within the film. The poor family lives in a “semi-basement” at the end of what appears to be a laneway. And the rich family lives, higher up, in a house designed by a famous architect. Naturally it has a big and perfectly manicured backyard. At one point in the film, you also get to see which housing type is more environmentally resilient.

    I’ll leave it there. But it’s worth checking out if you are into award-winning Korean tragicomedies.

  • Systemizing Airbnb

    Wired recently published a long read called, “I stumbled across a huge Airbnb scam that’s taking over London.” Apparently the people who do these sorts of things on the platform (things that are both illegal and questionable) call it “systemizing.” This is the process of trying to create scale. Secure lots of units. Create a bunch of fake/duplicate accounts. And try and maximize revenue.

    This obviously runs counter to Airbnb’s mission of “authentic places”, “community”, and “local hosts.” But as Benedict Evans points out in his latest newsletter, “where there is money and people, there will be scams.” And Airbnb is obviously doing everything it can to quash this kind of activity, especially as it prepares for a possible IPO this year. The company has a policy of zero tolerance.

    Fraud and government regulation are likely to be the two biggest kinks to work out as the company gets ready for public consumption. I am sure an equilibrium will be found; it’s just going to take some time and a few lawyers. It goes to show you just how challenging startups can be when you combine digital (tech) and physical (real estate).

  • Learning from Steve Falk

    Building new housing — in the places that really need it — is exceedingly difficult. This recent New York Times article by Conor Dougherty is a good example of that. It tells the story of a man named Steve Falk.

    Steve was previously city manager for Lafayette, California (a suburb of San Francisco), but he eventually grew frustrated by his inability to affect positive change, and actually build things. He ended up resigning.

    Below is a quote from the article. Steve is talking about housing affordability and supply.

    “I’m not sure individual cities, left to their own devices, are going to solve this,” he told me once. “They don’t have the incentive to do so, because local voters are always going to protect their own interests instead of looking out for people who don’t live there yet.”

    Steve is right in this assertion. I think it was Charlie Munger who once said, “Show me an incentive and I’ll show you an outcome.”

    I don’t know the specifics of the proposed 315 unit apartment building in Lafayette (perhaps it was ugly), but the article claims it was an as-of-right proposal close to a BART station (transit).

    How does that turn into 0 units and numerous lawsuits, while we all continue to debate housing affordability? Something is broken.

  • The ride-hailing red herring

    There’s a lot of data/speculation out there about the impact of ride-hailing apps. Many dense urban centers are claiming that they have increased traffic (slowed average speeds) and pulled people away from public transit. The University of Toronto published this study last year. And the WSJ recently published this chart for Chicago:

    To be honest, I’m not sure how much of the above is a result of ride-hailing apps, overall urban growth, e-commerce deliveries, public transit disinvestment, or other factors. But what is clear is that ride-hailing is pretty convenient and most (if not all) cities are seeing massive growth in this space.

    But all of this feels to me like a bit of a red herring. People will obviously choose what is most convenient and relatively affordable. And congestion was a problem well before people started using these apps (demand > road supply). The only solution I have seen work is to price congestion/roads.

  • Measuring street-network disconnectedness around the world

    Here is a recent research paper by Christopher Barrington-Leigh and Adam Millard-Ball that looks at the connectivity of local street networks across the world. They refer to this as “street-network sprawl” and they measure it using a Street-Network Disconnectedness index (SNDi).

    This is important for many reasons. Compact street networks with shorter blocks and fewer dead ends are far more conducive to different forms of mobility, including transit. Street networks are also incredibly sticky. Once laid, they rarely change. And if they do, it’s over very long periods of time.

    The study period in the paper is 1975 to 2013. What they found is that in 90% of the 134 most populous countries in the world, the street network has become less connected since 1975. What this means is that we have been making it harder to service our communities with transit.

    That said, there has been a reversal in “high income” countries, most notably in North America. If you take a look at the above graphs, you can see a fairly dramatic drop off, signalling a reduction in the construction of low-connectivity streets. Southeast Asia, on the other hand, is trending in the opposite direction. Note Bangkok in the upper righthand corner.

    For a copy of the full research paper, click here.

    Images: Global trends toward urban street-network sprawl

  • Why are people buying Apple Watches?

    I have been using an Apple Watch for a couple of months now. A lot of people ask me why I feel it is necessary to have a screen on my wrist, and I certainly get why some would see it as a massive distraction. You have to be selective with your notifications. Generally speaking, I find it very useful, though not necessarily invaluable.

    But every now and then I come across a new use case and think to myself, “well this is pretty cool.” I recently discovered that you can use it for boarding passes, which means one less thing in your hands at the airport. And this week I’ve been using it while snowboarding, which is helpful if you’re trying to manage a WhatsApp group chat and you don’t want to take your phone out on the lifts.

    The numbers also suggest I’m not alone in finding utility. Here are Apple’s sales numbers from Neil Cybart of Above Avalon:

    Apple has sold more than 90 million Apple Watches to date with 29 million sold in calendar year 2019. With an average selling price of more than $400, the Apple Watch is bringing in $12 billion of revenue per year, and that total is growing by 30% per year. After taking into account upgrade trends, the number of people wearing an Apple Watch has crossed 65 million. Based on my forward projections, the Apple Watch installed base will surpass 100 million people in 2021.

    In Neil’s view, the Apple Watch is indeed one of those paradigm shifts in computing. It is taking over tasks that our phones used to do and it is allowing for entirely new use cases. Neil cites three important features. We are now able to (1) seamlessly track/monitor aspects of our health, (2) intelligently receive small bits of information, and (3) augment our surroundings (“contextual awareness.”)

    For more on why the Apple Watch is / could be fundamentally changing mobile tech, click here.

  • Who is spending on developing autonomous vehicles

    The Information estimates that around $16 billion has been spent over the last few years on developing autonomous vehicles. This is across some 30 companies. But about half of this spending has come from just three companies: Waymo (Alphabet), Cruise (GM), and Uber.

    Waymo has been working on AVs for about a decade and the industry seems to believe that they are the furthest ahead. Still, the technology is not yet there and their AVs — which are operating in Phoenix — require lots of human supervision.

    The sentiment right now is that self-driving cars are going to take much longer than initially anticipated and many more billions in R&D spending. Last year, Waymo was looking for financing from outside investors. Morgan Stanley said the business was worth about $105 billion.

    Graph: The Information

  • This is not an art show

    Later this month a new exhibition will open at the Guggenheim Museum called Countryside, The Future. Produced by architect Rem Koolhaas and Samir Bantal (Director of AMO), the focus of the exhibition is on non-urban areas — or, the 98% of the earth’s surface not occupied by cities. The 21st century is being called an urban century. But the argument here is that “the countryside is now the site where the most radical, modern components of our civilisation are taking place.” If you’re going to be in New York, this one should be worth checking out. It’s on my list. Here is a teaser video that was just released by the Guggenheim:

  • How superstar cities can continue to scale

    Aaron Renn’s latest article in the Manhattan Institute is about how America’s top cities can “grow to new heights.” Usually when we talk about urban problems, it is because of failures. But in this case, it is about problems of success (though I suppose you could argue these are still failures).

    Cities such as New York and San Francisco have, in his view, stopped thinking like growth cities and that is leading to high home prices and overburdened infrastructure. But we all know that these problems are not unique to only “superstar cities.”

    Not surprisingly, Aaron argues that we need to stop implementing land use policies that only exacerbate our housing supply problems. Things like rent control and inclusionary zoning. And in some cases, it may be time for states to start intervening in local planning decisions.

    For the full article, click here.