Month: January 2022

• Ownership and participation — what cities share with Web3

  

  Here’s a cogent argument by Dror Poleg about how urban economics can be used to explain the evolution of Web3, and also why it’s all a bit of a ponzi scheme, but that when it works, it works.

  His argument revolves around ownership and participation. If you own real estate in a city, you could say that you are both a part owner of said city and a participant. You participate by virtue of living and/or doing other things there, but beyond that you also have a vested interest in the city doing well. Because if the city continues to do well and grow, there should be more demand for real estate, including yours, and that likely means your wealth will increase over time.

  This same force could be said to apply when existing property owners oppose new development. It restricts supply and increases the value of people’s existing “ownership” in a city. It’s kind of like being a company and not issuing new shares so as to not dilute your existing shareholders.

  This connection between ownership and participation is similarly a hallmark of Web3. In the world of crypto, users buy tokens (some fungible and some non-fungible) and those tokens provide access and rights to various things.

  For example, owning tokens might allow you to vote on key decisions affecting the overall organization. And if the organization does well and continues to grow, all token holders should, in theory at least, see their wealth increase. More people will want those same tokens. Ownership and participation.

  Web2 companies, on the other hand, do not typically offer this automatic connection between ownership and participation. That is, of course, unless you’re a shareholder. If you’re just a regular user of a platform like Instagram (which I am), but you don’t own any shares in Meta (I do not), then you’re only a participant.

  If you happen to be a widely followed influencer then you can certainly benefit indirectly from the platform, but you do not benefit from any sort of direct ownership in the organization. Pretty much everything accrues to the house.

  In fact, you also don’t own your followers, from which you derive your indirect benefit. Not to pick on Meta, but if Meta decided that your content was suddenly inappropriate for the platform, perhaps too salacious, then it could choose to close you down and your indirect benefits.

  This, of course, is one of the great promises of crypto and Web3. If you’re a part owner and you have some say in the way things are being run, you can maybe avoid this kind of outcome. And if things really aren’t working out, one should have the flexibility to take their followers and be extra salacious somewhere else.

  We shall see if this is ultimately how Web3 plays out, but the connection between ownership and participation is an interesting one and, if things do end up working out as planned, maybe it can be harnessed to improve our cities. Because we know the problems: inequality, housing supply and affordability, and many others. The system is clearly far from perfect.

  Photo by Adrian Schwarz on Unsplash

  2022.01.21

• Twitter just launched NFT profile pictures

  I was reading this morning about how Meta is working on features that will allow users to display their NFTs on their social media profiles, and to possibly even buy and sell them from within Facebook and/or Instagram. I thought this was kind of newsworthy and so, after the reading the article, I opened up Twitter to share the story. This is then what popped up:

  

  It is an invitation to use an NFT as my profile picture. Now, I am already doing this (it’s a CryptoBabyPunk), except that it would take someone a bit of work to determine if I truly owned the NFT or if I was just posing as a proud CryptoBabyPunk owner for the purposes of trying to increase my internet stature.

  So what this new feature is intended to be is a way to easily demonstrate proof of ownership. Once you connect your crypto wallet and select your NFT, your profile picture changes to a “special hexagonal shape.” This is the marker. Though you have to be a paying Twitter customer to do it (currently a few dollars a month).

  Some or many of you may be wondering why this is even worth talking about. Maybe you like your circular Twitter profile picture just the way it is. But these moves and announcements by large companies are both a vote of confidence for the crypto space and greater “utility” for NFTs.

  The value that somebody might derive from an NFT is wide ranging. In some cases it might just be something to look at (which is generally how art works). And in some cases the NFT might grant access to exclusive events or provide other perks, some real and some alleged. It’s all very much evolving as we speak. But in every case, you really need to be able to differentiate real from fake. What Twitter just did is a step in that direction.

  Broadly speaking, the more infrastructure that gets built out around NFTs, the more value they will have. I think bringing NFT collections to our social media profiles is, for example, a perfectly obvious extension. Here are my photos. Here are my videos. Here’s the stuff I’m tagged in. And here’s my beautiful and wonderful NFT art collection.

  You can bet that the NFTs will become just as curated and carefully managed as the rest of the profile.

  2022.01.20

• Berlin is considering going car free

  

  Berlin is considering something pretty radical. A grass roots movement called Volksentscheid Berlin Autofrei, or the People’s Decision for Auto-Free Berlin, is trying to turn the entire core of the city into a car-free zone. (There would be some exceptions and so we should maybe call it primarily car free.)

  The area in question is everything inside of the city’s circular S-Bahn train line (pictured above), which would make it the largest car-free zone or mostly car-free zone in the world. It’s larger than Manhattan and it’s about the size of London’s zones 1 and 2, to help give you a sense of the scale.

  So far the group has collected about 50,000 supportive signatures and, according to Fast Company, the Senate of Berlin is set to make a decision on the proposal next month. I have no idea how much community and/or political momentum this actually has, but I love how bold of an idea this is.

  Is it too bold?

  Again, it is perhaps useful to flip the question and use Seth Godin’s status-quo-bias-checker model when thinking about this. If the center of Berlin was already car free and a community group had just come forward with a plan to now allow vehicles, how do you think you’d feel? I could see that being contentious.

  Do you think Berlin should do it?

  Image: City of Berlin via Fast Company

  2022.01.19

• Price of shelter increased 4.1% — or was it more?

  The latest US consumer price index report was recently published and for the 12-month period ending December 2021, the all items index rose 7.0%. This is the largest 12-month increase since June 1982. Here’s a breakdown:

  • Gasoline (all types): +49.6%
  • Used cars and truck: +37.3%
  • Meats/fish/poultry/eggs: +12.5%
  • New cars: +11.8%
  • Food at home: +6.5%
  • Electricity: +6.3%
  • Food away from home: +6.0%
  • Apparel: +5.8%
  • Transportation: +4.2%
  • Shelter: +4.1%

  The obvious standouts here are the price of gasoline and the price of used cars and trucks. Too much demand and not enough supply, it would seem. But the other conspicuous line item for me is shelter at only 4.1%. Is that it?

  As Charlie Bilello points out in his latest newsletter, US rents were estimated to be up about 17.8% in 2021 (the highest increase on record according to Apartment List) and the Case-Shiller US National Home Price Index was similarly up about 19% year-over-year.

  I also just glanced at the latest Urbanation rental report that came out today, and condominium rents were up 10.8% year-over-year here in the Greater Toronto Area. So I don’t know about this 4.1% number. But maybe I just missed something in the fine print.

  2022.01.18

• Slime mold may be better than us at transportation planning

  So slime mold, which is a fungus-like single-celled organism, has a tendency to build highly optimized networks across its food sources. In other words, if you scattered a bunch of food on a surface and then dropped in some slime mold, it would naturally create an interconnected web of linked veins across this surface. And this web would be based on the shortest and most efficient paths of travel between the various food sources.

  I am mentioning this odd factoid because ten years ago researchers in Tokyo used this naturally occurring phenomenon for the purposes of trying to improve transportation planning. What they did was map out greater Tokyo. They then placed oat flakes (i.e. food) in spots that correspond to the various cities and urban centers that surround the city. Alongside this, they blocked off the areas where transportation networks do not typically run, such as through mountains and into the water. They then dropped in some slime mold, wet the surface, and watched it grow.

  

  What they found was that the resulting network was remarkably similar to Tokyo’s actual rail network. The slime mold had found the most efficient routes, eliminated redundancies, and generally discovered the optimal way in which to connect its food sources. And if you think about it, this is basically what transit networks are supposed to do. They should connect clusters of people in the most efficient way possible.

  It has been a decade since this slime mold transportation discovery was first publicized, and it would seem that it hasn’t really caught on as an invaluable planning tool. So I’m going to go out on a limb and suggest that we should take out a map of every major city in the world, plot its population centers, drop down some oat flakes, and then let slime mold tell us all the ways in which we are screwing up and over-politicizing our transportation planning efforts.

  Thank you to Angus Knowles for making me aware of this study. Angus writes an occasional newsletter about cities and housing, over here.

  Image: LiveScience

  2022.01.17

• Love letter to Québec

  I watched this for the first time last night. It is the late and great Anthony Bourdain hanging out in Montréal and Québec City with two of Canada’s most respected chefs and restaurateurs: Dave McMillan and Fred Morin of the famed restaurant Joe Beef. Initially aired in 2013, it’s hard not to miss Bourdain when you watch it. And it’s also hard not to love Québec. This is an episode about humility, authenticity, good living, and, of course, some of the best food and drink in the world. Bourdain has a great line right before they visit Wilensky’s (in Le Plateau area of Montréal) where he says, “no matter how you feel about Québec as either separate or as an essential part of Canada, any reasonable person loves this place.” I couldn’t agree more.

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

  2022.01.16

• A new 15-minute city is being developed near Salt Lake City

  In 2018, the Utah State Legislature passed a bill creating a new land authority to guide the future development of 600 acres of state-owned land in Draper, Utah (just south of Salt Lake City). It’s near an area called The Point of the Mountain and so that’s what’s this project is now being called — The Point. Here’s a map to help you get situated:

  

  In addition to this being a big and meaningful development opportunity with an estimated 7,400 new households being contemplated, the land authority also wants this to become an innovation hub and a model “15-minute city.”

  There has been a lot of talk about 15-minute cities over the course of this pandemic, but the idea is simply to have all/most of your daily needs within walking distance of where you live and to not have to always rely on a car. This is a difficult thing to achieve in many cities, but I think it’s one the greatest urban amenities out there.

  

  A big part of this is creating the right street network and planning for enough density, which is why this can be so challenging to do after the fact. Street grids, in particular, tend to be extremely sticky and mostly immutable. In this case, the plan is to create car free zones (or limited vehicle zones) across the various centers of the development.

  

  Developing walkable communities from scratch is a lot harder than slotting into existing urban fabrics, particularly when you have a contrasting context all around it. You have to get a bunch of different things right for it to be successful. But we continue to see lot more of these urban-focused masterplanning efforts and I think the trend will only continue.

  If you’re a developer who would like to participate in The Point, the RFP door is currently open.

  2022.01.15

• Brampton is building a ton of secondary suites

  Here is an interesting housing chart from Ryerson University’s Centre for Urban Research (CUR) using data from CMHC:

  

  What it shows is (1) the number of new housing using created through the addition of secondary suites, such as basement apartments and laneway suites; (2) the number of housing units lost to demolition or “deconversions”, such as when a duplex or triplex gets converted (back) to a single-family home; and then (3) the net new units added over the last three years.

  In looking at the chart, you’ll see that the City of Toronto actually lost about 2,000 units from its existing housing stock between 2019 and 2021. Again, these numbers only consider what’s happening in the city’s existing low-rise residential housing stock. They don’t factor any of the housing supply being delivered through new condominiums and multi-family apartments.

  Still, it’s evidence for something that is perhaps already well known: many of Toronto’s low-rise neighborhoods are losing people. They are losing people because the existing structures are housing fewer residents and they are losing people because we make it difficult to build new housing. We want them to be “stable.” But stable built form doesn’t necessarily mean that things aren’t changing on the inside.

  Now compare this to what’s happening in Brampton (a suburb of Toronto). CUR is calling Brampton the land of secondary suites. Over the last three years, it added nearly 11,000 housing units and was on pace (at the time the data was published) to create nearly 6,000 last year alone (most of which are basement apartments). This is all within its existing housing stock.

  With all of this, I think there’s an interesting question about about how much of this is being driven by market demand and how much of this is being driven by land use policies. There’s obviously demand for expensive single-family homes in Toronto, which is why “deconversions” are happening. But to what extent does this change if/when we become more permissive around multi-unit dwellings?

  I think it depends on how we craft the policies.

  2022.01.14

• Buy and hold

  I know that this is supposed to be a blog about building cities, but it’s also a blog about real estate and I have heard that people sometimes do things like invest in real estate. So here is a terrific memo by Howard Marks (of Oaktree Capital Management) about when to sell assets (and when not to sell assets). His overarching argument is that, most of the time, staying invested is ultimately the most important thing. But that it can be difficult to do.

  Here’s an excerpt:

  When you find an investment with the potential to compound over a long period, one of the hardest things is to be patient and maintain your position as long as doing so is warranted based on the prospective return and risk. Investors can easily be moved to sell by news, emotion, the fact that they’ve made a lot of money to date, or the excitement of a new, seemingly more promising idea.

  Howard is talking about the stock market and his words of advice are particularly important in that context given how easy it is to be a “trader.” I can, so maybe I should. But the same lessons hold true for real estate, even though it is a less liquid asset. A lot of wealth has been generated over the years by those who simply bought well and held for the long term. One good decision and patience can go a long way.

  2022.01.13

• What is a beautiful place?

  

  The UK has something called the National Model Design Code. The purpose of this national code is to provide guidance to local authorities and communities on the production of policies that promote successful design. More specifically, it is intended to help people determine what “good quality design looks like in their area.”

  So as part of this, the code wades into subjective things like beauty, attractiveness, and distinctiveness (see above chart). This is an interesting discussion — and a topic in this recent Monocle radio episode — because, at the end of the day, is there really such a thing as universal beauty? Can we all agree on what the most beautifully designed places in the world are?

  At the same time, and architect Félicie Krikler points this out in the Monocle episode, there are countless examples of ugly places that are still wildly successful by all other urban measures. Is that okay or should they also be beautiful? And if budgets are tight (they always are), is it better to be a beautiful building or to be a more affordable one? Uh oh.

  There is also a temporal consideration. Sometimes the things that were once thought to be ugly are now actually thought to be quite beautiful. Beauty can take time, and places sometimes take time to settle in and find their best uses. This is something that I have written about a few times before on the blog.

  All of this being said, I believe wholeheartedly in the importance of beautiful places. And I don’t think we talk enough about it. Too often we get hung up on esoteric planning stuff, even though so many of the places that we love would never meet these same tests. However subjective as it may be, more beauty is rarely a bad thing.

  Image: National Model Design Code

  2022.01.12