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: June 2021

  • The next wave of computing innovation

    Venture capital firm Andreessen Horowitz (a16z) has just launched a new site called Future. It is a site for “understanding the future, how tech shapes it, and how we build it.” I just subscribed to it and, if you’d like to do the same, click here. At the same time, the company also just announced their latest crypto fund (a $2.2 billion fund). Here’s an excerpt from the release:

    We believe that the next wave of computing innovation will be driven by crypto. We are radically optimistic about crypto’s potential to restore trust and enable new kinds of governance where communities collectively make important decisions about how networks evolve, what behaviors are permitted, and how economic benefits are distributed. 

    I’ve been reading a lot more about crypto over the last few months (which is something that I mentioned I was doing here.) I am not in this world day-to-day, but I am now fully convinced that we are in the very early innings of a profound shift. So pretty soon this is going to become my day-to-day, whether I like it or not.

  • US migration patterns according to one-way U-Haul truck transactions

    One of the ways to try and keep tabs on where people are moving is to look at the number of permanent address changes. Another way is to look at the number of one-way U-Haul trucks that enter versus leave a particular state. And it turns out that if you’re U-Haul, you do care to track where all of your trucks are going. Each year in the United States there are about 2 million one-way truck transactions.

    Looking at the data from 2020, the top inbound destinations — that is, the states that had the largest net gain of one-way U-Haul trucks — were (1) Tennessee, (2) Texas, and (3) Florida. This is a big jump for Tennessee as it was 12th in 2019. Texas and Florida, on the other hand, were similarly in the top three last year. In last place on this list is California, meaning that it had the largest net loss of one-way U-Haul trucks leaving the state.

    Overall, this data continues to reinforce a shift that is taking place toward more affordable housing markets, such as those in the southern United States.

    For the full U-Haul article, click here.

    Photo by Tanner Boriack on Unsplash

  • Speed and simplicity in Vancouver

    This is a good follow-up to my recent post about the barriers to developing mid-rise here in Toronto. I have just learned (thanks to Michael Mortensen) that Vancouver has proposed some specific zoning changes that are intended to increase the supply of new rental housing.

    Oddly enough, some of these proposed changes are consistent with what I put forward in my post and include 1) streamlining the development approvals process and 2) simplifying the allowable built form. i.e. Fewer step-backs.

    Here’s a capture from the report that went to City Council:

    The report is dated May 2020 and I truthfully don’t know the current status of these proposed changes. I’m sure Michael would have all of the details. But regardless, the report very clearly acknowledges that lengthy entitlement timelines are a barrier to new rental housing, as are more complicated building forms. Speed and simplicity can go a long way.

    For the full staff report, click here.

  • Unicorns overwhelmingly originate in big cities

    In the world of startups, a unicorn is used to refer to a company with a market cap greater than $1 billion. A decacorn, the latest benchmark, is what it sounds like in that it’s a company with a market cap greater than $10 billion.

    While unicorn status is just one measure, valuations are an important yardstick for cities and countries. How many big new companies are you creating? That is a critical question because, presumably, these big new companies are going to create a bunch of new jobs and generate a lot of new wealth for people.

    This recent blog post by Elad Gil is a great summary of what’s happening in the world from this perspective. The raw data is also available if you’d like to dig deeper.

    Here are the number of new unicorns since October 2020 by city:

    Silicon Valley, not surprisingly, continues to dominate, followed by New York.

    Here is a breakdown for the United States as a whole:

    Miami and Austin have been in the news a lot over the past year and their startup scenes may very well be on the rise relative to other US cities. But it’s interesting to see other smaller cities on this list, like Salt Lake City, who are, at least right now, holding their own.

    I found this last set of two charts particularly interesting:

    They are showing unicorn count (first) and unicorn market cap (second) as a percentage of their respective countries. For example, Silicon Valley is sitting at about 47% and 51%, respectively. So about half of all unicorns in the US have originated from this geography.

    But for most other cities on this list, the percentage is much higher and, in many cases, it is 100%. (Silicon Valley is perhaps relatively low because the US has lots of other big and important cities.) For me, this shows the continued dominance of cities. If you’re building the next great unicorn or decacorn, the data tells us that you’re probably doing it in a big city somewhere. And I don’t see that changing anytime soon.

  • The Surfside tragedy

    What happened in Surfside, Florida this week with the partial collapse of a 12 storey building is a horrible tragedy. My heart goes out to everybody who has been affected. I can’t imagine how this must feel. The New York Times is reporting that some 159 people are still unaccounted for, as of last Friday night. At least 4 people have been killed in the incident.

    The focus right now is on saving as many human lives as possible. Without a doubt, that is priority number one. But this situation also raises a critically important question: How the hell could this happen in North America? When I saw the terrible news this week, I immediately flipped the article to one of our structural engineers with a note asking basically this.

    As many of you know, buildings are typically designed and built with lots of structural redundancies. This is so that these sorts of tragedies can be avoided. It is too early to know exactly what happened here, but there are going to be questions around the building’s original design and construction, its maintenance program (saltwater is awful for buildings), and much more.

    I am sure that all of this will come out in the fullness of time. And it is important that it does.

  • Releasing the shackles on mid-rise development

    I love mid-rise buildings. I think they are an incredibly livable scale of housing, which is why I am looking forward to moving into Junction House when we begin occupancies next year. But as we have talked about many times before on the blog, the mid-rise economics are challenging in this city, which is why we also don’t have any other Avenue-style mid-rise projects in the pipeline right now. We haven’t been able to find land where the math works.

    Here are two excerpts from a recent Globe and Mail article — titled “Toronto’s mix of planning rules limits growth of mid-rise housing” — that speaks to this dynamic:

    For well over two decades, Toronto’s official plan has called for transit-oriented intensification along the “Avenues,” much of it expected in the form of mid-rise apartments that can be approved “as of right” – meaning without zoning or official plan appeals. Such buildings are often seen as more livable and human scale than 50- or 60-storey towers.

    Yet, ironically, the highly prescriptive Mid-Rise Guidelines – combined with skyrocketing land, labour and building costs, as well as timelines that can run to six years for a mid-sized building – have turned these projects into pyramid-shaped unicorns, often filled with deep, dark and narrow units dubbed “bowling alleys.”

    “The economics are so frail,” says architect Dermot Sweeny, founding principal of Sweeny & Co., who describes the angular plane requirements as “a massive cost” because they make the structure more complicated and expensive while reducing the amount of leasable or saleable floor space.

    The critiques extend beyond the industry. Professor of architecture Richard Sommer, former dean of the John H. Daniels Faculty of Landscape, Architecture and Design at the University of Toronto, describes the controls in the guidelines as “very crude.” “They’re built around a mindset of deference to low-rise communities.”

    My opinion is that, at a minimum, we need to revisit the “guidelines” that govern these kinds of projects and we need to make this scale of development “as-of-right.” In the same way that laneway suites work, where you simply apply for a building permit, we need to make it just as easy for mid-rise housing. There just too many barriers and too many opportunities for something to come up that could hold up the entire project for months or years.

    Building at a variety of scales is important for the fabric and vitality of our cities. Unfortunately, I have all but made up my mind that small doesn’t work unless it’s as-of-right. I would love to build another laneway house and I fully expect that to happen at some point in the near future. But I just can’t seem to get my head around another mid-rise building right now. I wish that wasn’t the case. And it’s certainly not because of a lack of effort.

  • One Delisle is a BILD Awards finalist for Project of the Year

    BILD just announced its finalists for the 2021 BILD Awards.

    This is probably the most noteworthy awards program in the development industry here in the Greater Toronto Area. And so I am pretty excited to announce that One Delisle is a finalist for the following awards:

    • Project of the Year, Mid/High-Rise (Pinnacle Award)
    • People’s Choice Award (Voting Opens August 2021)
    • Best Suite Design, Large — West Penthouse Residence
    • Best Innovative Suite Design – Sky Collection Suite

    The full list can be found over here (PDF). All of the finalists’ work is also going to be posted on the BILD Awards website before the end of this week.

    The actual winners will be announced this fall at the Awards Gala on October 7, 2021. I’m not sure if it has been decided yet whether it will be in person or online, but we all know that in person would be much better. Let’s hope that will be the case.

    Given the good news, our office decided that it was probably a good idea to make a few margaritas this evening:

    Whatever the end result, we are thrilled to be a finalist.

    We are also a past recipient of the “Best Innovative Suite Design” award, which was given to our House Collection of suites at Junction House. So I guess we like working our floor plans.

    Congratulations to the full One Delisle team. This is well deserved.

  • How buildings convey meaning

    Witold Rybczynski and I clearly do not have the same taste in architecture. But he raises an interesting point about the relationship between architecture and art in this recent post. Here’s an excerpt:

    In the name of renouncing the past—and denouncing anything that smacks of decoration—modernism has largely done away with art, the lonely Henry Moore stranded on a plaza, notwithstanding. The problem is that when you strip away figural and allegorical ornament, what is left are mute building materials, mechanical-looking details, and abstract space.

    There is a long-standing tradition of integrating art, and other ornament, into architecture. But modernism viewed this sort of decoration as being superfluous. It wasn’t functionally necessary and so why include it?

    This has led us to today where there is a joke that investing in public art means investing in some sort of add-on that sits outside of your building and that can be classified as art. Perhaps something by Henry Moore.

    The result, Witold argues, is that we have lost something critically important in our buildings: meaning.

    But is allegorical ornament really all that different from a freestanding art piece? Don’t both tell a story? And don’t they both get applied, in a way, to a building that could surely continue on without it?

    At the same time, what is meaningful art? Does it need to include bas-relief and/or figural representations? Or could it be a signed urinal on a pedestal in the lobby with an accompanying digital NFT?

    There’s no question that buildings need meaning. We all crave stories. But sometimes they communicate in different ways.

    Photo by David Vives on Unsplash

  • Digital-only clothing is seemingly taking off — is real estate next?

    https://www.instagram.com/p/CPX05kKAXPb/?utm_source=ig_web_copy_link

    Last month a digital-only version of a Gucci bag sold on gaming platform Roblox for about US$4,115. Again, digital-only. No physical bag that can be brought to brunch. At the time, this was about US$800 more than the real life version of the same Gucci bag. So why not go and buy that one instead?

    I am sure that most of you are scratching your head at this and wondering: who the hell is valuing the digital more than the physical? Could it be that status and signaling — perhaps the real purposes of a designer bag — are even more important online in the world of Roblox than in real life? In this case, it wasn’t even an NFT and so presumably there aren’t any value claims around scarcity and authenticity. (Full disclosure: I don’t know how Roblox works.)

    It’s important to keep in mind that meaningful innovation often starts out looking pretty silly to some/most. And to me, this feels like one of those times. What we are clearly seeing is a blurring between our digital and physical worlds. In fact, just today I was reading about a slew of digital-only clothing companies that sell, you know, contactless cyber fashion. One of those companies is Tribute (embedded post above).

    The way it works is that you first buy a piece of digital clothing (which can sell out just like regular clothing). You then send them a picture of yourself and the company goes and renders that piece of digital clothing onto your photo. The result is what you see above, which to me looks fairly realistic (though at the same time fantastical, which I think is part of the point).

    As out-there as this may seem, this strikes me as something that could become a very big deal. What is real on Instagram anyways? I can also see this being applied to other industries, including real estate. Maybe that is already happening.

    What do you think?

  • Toronto releases draft garden suite regulations

    As most of you know, laneway suites (a form of accessory dwelling unit) are permitted “as-of right” across the City of Toronto. This has led to an explosion of new laneway housing. One framing contractor that I know recently told me that he is now doing a new laneway house every month. Incredible considering how out-there they were only 10 years ago.

    However, there are a few barriers to participation with the current policies, one of which is that you need to be adjacent to a laneway in order to have an eligible lot. So the City has been working on adapting these policies to suit residential properties without a public lane. These new accessory dwelling units are being referred to as “garden suites.”

    The draft garden suite regulations are now available online and will be heard at Planning and Housing Committee next week. The recommendations are that these regulations form the basis for further community engagement, and that a final report be brought back to the Committee in Q4 of this year.

    This final report is expected to recommend Official Plan policies and Zoning By-law regulations so that garden suites, along with laneway suites, can be as-of-right across the city. This is great news. So if you have a lot without a public lane and you’re considering an ADU, now might be a good time to start planning.

    The best place to start doing that would be with these draft regulations.