Month: September 2023

• Crowdsourced rental registry launches in Ontario

  

  Non-profit Vivre en Ville launched a new rental registry in Ontario last week. It is an extension of the one that they launched in Quebec last spring. The way it works is that it allows anybody to enter how much they’re paying in rent. In other words, it’s a crowdsourcing platform.

  The site then displays this information on a map so that everyone can see current and past rents. The data points are all anonymous and no personal information is linked to them, but the idea is to “preserve affordability in the residential market by providing access to important rent information.”

  Obviously, the thinking is that greater transparency will lead to more affordable housing. Presumably because you’ll now be able to see if you’re somehow being bamboozled, among other things.

  I’m not 100% convinced that this will be the case, but I am of the general opinion that more transparency and more information is better than less transparency and less information.

  I also find it interesting that there seems to be a lot of people willing to take the time to share this kind of information. According to the Toronto Star, they launched in Ontario with over 3,000 rental inputs. And according to their website, the full registry has over 40,000 inputs.

  2023.09.30

• The end of private car ownership

  

  Here is an argument that Philadelphia-based Diana Lind recently made on her blog, The New Urban Order:

  I believe we’re at the beginning of the end of private car ownership in American cities. This idea came from thinking about the next steps when our RAV4 dies in the coming year or so: not only shouldn’t we replace it, but we won’t want to replace it. Right now only about a quarter of Americans do not drive to work, and only 9 percent of Americans do not have access to a car at all. But I think that in the coming decade there’s going to be a ton of potential to convert people living in dense cities and neighborhoods away from private cars.

  There are a number of reasons for why she believes this is going to be the case and, to quickly summarize, they are: remote work, declining birth rates, more old people, Uber and other services, and autonomous vehicles. And generally, I would agree that there is a strong case to be made here.

  But one thing that she does not explicitly talk about is the relevance of built form in this move away from private car ownership. She does mention “people living in dense cities” (see above), but does this mean that we are to assume density will remain a prerequisite, as it mostly is today?

  Urban density dictates so much of how we move around. When I was driving around Paris during the summer, I couldn’t wait to return our car and get back on foot. You should have also seen the gymnastics we pulled off to refill the tank. Driving in the city was annoying. Paris is designed for walking, taking the metro and, now, cycling.

  On the other hand, when I land in Salt Lake City (Park City), the first thing I do is head to the car rental area. The city is getting better at trying to reorient itself, and there is a tram (Green Line) that runs from the airport through downtown, but it very much remains a driving city. And ideally you want something like a Toyota 4Runner that will take you through snow and up steep pitches.

  So while I agree that, directionally, Diana is right, I think the question remains: What does this mean for individual cities and their built environments? In a city like Paris, it is obvious. Private car ownership is highly likely to continue declining. But in a place like Salt Lake City, I think it’s going to be much more challenging and take a lot longer.

  Photo by Chris Henry on Unsplash

  2023.09.29

• En province

  As many of you know, I am learning French, again.

  One of the small things that I found really interesting in this week’s class — besides, of course, figuring out how the hell to use le subjonctif — was the expression “en province.” In France, this effectively refers to any place in the country that isn’t Paris — the capital city/region. And it turns out that many other countries employ a similar kind of vocabulary.

  According to Wikipedia, people in Peru say “en provincias”, people in Mexico say “la provincia”, people in Poland say “prowincjonalny”, and people in Bulgaria say “в провинцията”, whatever that means. What is fascinating to me about this is that it implies a very capital and urban-centric mentality. You’re either in the capital city or you’re, well, in the provinces.

  It’s also not something that is used in either Canada or the US. In Toronto, you’ll hear people say that someone is “up north” and, in Philly, you’ll hear people say “down the shore” to indicate that they’re headed in the general vicinity of the east coast. But as far as I’m aware, there isn’t a specific term that is used to describe any and all lands that exist outside of our capital cities.

  Maybe it’s because Ottawa isn’t our biggest city and so it would be silly to designate everything outside of it as being some sort of provincial non-capital territory. But I wonder if part of it is because we don’t have the same urban-centric mentality. Could it be that we just don’t value and think about our principal cities in the same way?

  2023.09.28

• The Livabl Launch podcast

  Matthew Slutsky (formerly of BuzzBuzzHome fame and now of Livabl fame) recently invited me on his podcast to talk about some of our current and upcoming condominium projects, as well as about the market in general.

  Despite my best attempts, I only briefly talk about NFTs and crypto (in the context of our One Delisle project). So if any of you are sick of hearing that from me, the episode should be overall fairly tolerable.

  To have a listen, click here. It’s about 30 minutes.

  Thanks again for having me, Matthew.

  2023.09.27

• Cold, warm, hot

  Sadly, this can very easily happen in the world of crypto. If you connect your wallet to a bad actor and sign a malicious transaction, it is possible for someone to drain all of your assets (coins, NFTs, and so on). It’s pretty terrifying. And I’m sure that a lot of people will see this and say to themselves, “that’s why I don’t like crypto! It’s too risky. Too many scammers. Bunch of rat poison.”

  There is no question that crypto is risky. It’s also not very user friendly. Clearly even sophisticated users can get tricked into signing the wrong kind of blockchain transaction. It happens all the time. But this is also a nascent space. And maybe this will become less common in the future as things mature.

  Either way, there are things you can absolutely do today to protect yourself if you’re planning to own and do crypto things. One of the most important rules to follow is this one here: you should have at least 3 crypto wallets. Let’s call them cold, warm, and hot wallets (which is often how they are described in web3 land).

  A hot wallet is the one you use to connect to sites, mint things, and do whatever else. Because of this, you want to keep almost nothing in it. If you want to mint an NFT, transfer in only whatever crypto is required to complete that transaction. That way if something bad happens, it’s not devastating. Once your mint is complete, transfer out the NFT to a colder wallet.

  A cold wallet is essentially your vault. This is where you store your Mona Lisas. These are the NFTs (or whatever else) that you plan to own for the long-term. The only transactions with this wallet should be to move things in and out of it. You should never connect it to any sites/services, even if they’re reputable ones. Once you do that, it’s no longer a cold wallet. It’s now a warmer wallet.

  A warm wallet lives somewhere in between. You connect it to sites/services that you trust, and you use it to hold NFTs that you might be looking to sell in the short-term (to give just one use-case example). In my case, brandondonnelly.eth is my warm wallet. It’s where I mint the NFT photography that nobody ever buys.

  I realize that all of this probably sounds convoluted, especially to those who are unfamiliar with this space. But in today’s world, if you want to be crypto literate, you need to take things like this into consideration. My NFTs might be finally totally worthless, but I love my growing art collection and I like it being on ice in a vault.

  2023.09.26

• Should more people live together?

  We know that, for a variety of reasons, more and more people are living alone. As of 2018, single-person households represented about 28% of all households in the US. This is up from 13.1% in 1960.

  Here in Canada, single-person households became the predominant household type in 2016 (we’re also at 28%) for the first time in Canada’s 150+ year history. And the numbers are even higher for some European countries. In Finland, Germany, and Norway, more than 4 in 10 households are single-person.

  Part of this has to do with people living longer. In Canada, 42% of people aged 85 or older (and living in a private household) live alone. But part of this is also cultural. Japan has one of the oldest populations in the world, but it doesn’t have the highest percentage of single-person households. Although, the number is relatively high and increasing. It’s nearly 40%.

  Whatever the case may be, you could argue that there appears to be some sort of global trend line toward more people living alone. But here’s an important question: Is this a good thing?

  Albert Wenger recently argued in this blog post that, actually, we need new forms of living together. Whether it’s multigenerational living or coliving with like-minded friends, there are clear benefits to living with other people. You get to share resources. You get elders that can look after kids. And you get company.

  There’s also an opportunity to curate your environment. As Phil Levin puts it on his coliving blog Supernuclear: “If your home is filled with motivated people, you will be more motivated. [And] if your home is filled with funny people, you will laugh more.”

  Albert posits that office conversions (which are obviously in vogue right now) could serve as an opportunity to rethink our built environment around coliving. And while this is certainly true, I’m not sure we need it to happen. There are ways we can live together today, within our existing environment, if we want to.

  The question is: do we?

  2023.09.25

• Zurich is hot

  Zurich is today one of the hottest real estate markets in Europe:

  

  And based on UBS’ Global Real Estate Bubble Index for 2023, it also has the highest bubble risk:

  

  According to Bloomberg, there are a number of reasons for this: low housing supply, a constrained geography, a key interest rate that is less than half of the ECB’s, and Google. Google is one of the largest employers in the city, with more than 5,000 employees. And supposedly the starting salaries for a software developer there can reach 200,000 Swiss francs (nearly CA$300,000).

  I also just learned that the minimum wage in Switzerland is 23.90 Swiss francs per hour. Based on 160 hours per month, that’s 3,824 francs per month or 45,888 francs per year. In Canadian dollars, that’s over $68,000 per year. Pretty healthy. Although, as we can see here, Zurich is also expensive.

  Charts: Bloomberg & UBS

  2023.09.24

• What’s real anymore?

  Generative AI has made it a lot easier to make things up using software like Photoshop. This, of course, isn’t a new thing. But it has gotten significantly easier for people like me who aren’t experts in photo editing.

  Here are two examples that I created this morning. The first is a photo of me from last summer in the Salt Flats of Utah:

  

  And here I am again after adding new clothes, a dog friend, a couple taking photos, a more impressive backdrop, and some sort of body of water in front of me:

  

  The second is a photo from Paris:

  

  Now here it is again with tall buildings in the background, glass storefronts, a few neon signs, string lights above the middle of the street, a bollard blocking car access, and a few more people:

  

  These aren’t entirely perfect if you’re really paying attention. But for the most part, I think they’re pretty convincing — especially the second one.

  Generated images are only going to get better going forward and I don’t think that’s a bad thing. But we do have to start training ourselves to question whether something is real or doctored. It’s already hard to tell.

  2023.09.23

• Learning French, again

  

  I grew up going to a French school. For a significant portion of my early education, I had every single class — except English class — in French. But to be honest, I never really loved it. I had started midway through elementary school and so I always felt like my French was never quite good enough.

  I was behind relative to my classmates. I needed special tutoring to get caught up (while my classmates were off learning a third language). And so I used to constantly beg my mom to take me out of French school and put me in a, you know, regular English school. I know this was tough for my mom, but her response was always steadfast: “You’ll thank me when you’re older.”

  At the time, I couldn’t possibly imagine her ever being correct with this statement. But it turns out, she was. Today, I’m grateful to be able to travel to a place like Paris and kind of speak the language. (I say kind of because, hey, it’s been a long time since high school!)

  And I’m grateful that when I go into Mabel’s Bakery across from Junction House that I can order a coffee and a croissant in French. (Most of the people there are from France. Try it for yourself. They’re lovely humans.)

  In fact, I enjoy it so much that I recently decided to enroll in a French class at Alliance Française here in Toronto. (Fresh $80 textbook pictured above.) Obviously the 9-year-old version of myself would be completely shocked with this absurd decision. But I guess this is just what happens when you’ve been indoctrinated from a young age.

  Or maybe I just really want to build something in France one day.

  2023.09.22

• 1/21st of a second home

  I don’t know for exactly how long, but for a very long time people have been trying to solve this real estate problem: “I have a desire to own a home, or multiple homes, around the world. However, I don’t know how often I’d actually use it/them, and this desire is both expensive and a pain in the ass.”

  And so unless you have a lot of money and can make the pain in the ass part go away, there seems to exist an ongoing need to make fulfilling this desire both cheaper and easier. Perhaps the most common ways are through a timeshare property or through some kind of fractional ownership structure, where you own a share of a property.

  Some companies are even “tokenizing” this second structure on blockchains. I have read about one company that is buying vacation homes and then issuing 365 corresponding tokens. Each token represents 1 day of occupancy (and actual title ownership apparently). In theory this sounds kind of neat, but you’re also buying a second home with potentially 364 other strangers.

  So here’s another approach that I just learned about. The UK-based company, August, has devised a model that works like this:

  • August starts with “homeowner curation.” Meaning, they start by vetting homeowners to make sure that they’re not weird or something.
  • Once they have a suitable collection of homeowners, August sets up a new real estate entity that all of the homeowners must then fund equally.
  • This entity, by way of August, goes out and buys 5 properties, and each homeowner receives an equal share of the ownership. (Typically, they target 16-21 groups per entity.)
  • August renovates the 5 properties, gets them ready for occupancy, and then manages them on ongoing basis. This includes bookings.
  • Finally, each homeowner gets an average of 8-10 weeks per year across all of their homes.

  In terms of the homes themselves, their pied-à-terre collection includes homes in Paris, Rome, Cannes, Barcelona, and London. They are typically between 70-100 square meters with 2 bedrooms and 1-2 bathrooms. And the average price/value is supposedly around €1,250,000 (post-renovation?), with the entry price of a share starting at €340,000.

  I’m not sure if this share figure is based on 21 homeowners, but if it is, then that’s €7,140,000 of equity being raised in order to buy somewhere around €6,250,000 of real estate. Is the spread their margin for setting this all up? There’s also an annual fee per owner (€8,600), which presumably covers operating costs and the ongoing management of the properties.

  A model like this naturally provokes a lot of questions. What happens if somebody wants to sell? Does the next buyer need to be similarly vetted for overall weirdness? And how liquid is 1/21st of a 5-property apartment portfolio? I don’t know these answers, but intuitively these shares have got to be less liquid than a 100% sale.

  However, as a solution to the problem of “I have a desire to own homes across Europe but I’m not quite rich enough to make it truly carefree”, this seems like a pretty clever solution.

  2023.09.21