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.
Earlier this month, Resonance Consultancy published its 2024 World’s Best Cities ranking. Or, in their words: its definitive power ranking of the 100 global cities that it believes are shaping tomorrow.
These are always fun to flip through, which is I guess why people do them and why people look at them; but I do think it’s important to look at the underlying methodologies. Otherwise, what does “world’s best” even really mean?
In this case, they’re looking at global cities through the lens of three key categories: livability, lovability, and prosperity. More specifically though, the report looks at factors that are demonstrated to have moderate to strong correlations with attracting talent, visitors, and/or businesses.
This makes it distinct from rankings that are more focused on things like livability. Because according to Resonance, factors such as commute times, crime, and housing affordability don’t tend to correlate strongly (at least in the short-term) with a city’s ability to attract talent, tourism, and investment.
While this may seem a bit counterintuitive, it does also make sense. People don’t move to London because they’re looking for affordable housing and a reasonable commute. They move to London because they want to be in the center of the world.
And yes, London tops their power ranking:
The top of this ranking isn’t all that surprising. It’s the usual suspects. But I continue to be impressed by how quickly Dubai has transformed itself into a top global city. Also impressive is how Dublin punches above its weight of just over 500,000 people.
I am medium surprised to see Hong Kong nowhere on this first page (there are another 65 cities not shown here). It usually features as a top global city. But presumably this is the result of Beijing meddling. People are looking elsewhere — like Singapore.
For the full list of cities and to download a copy of the report, click here.
There are about 2.1 million people who live in Paris (2023 figure).
The metro area is, of course, much larger with over 13 million people. But if you look at Paris proper — that being the 20 arrondissements within the Boulevard Périphérique — it’s the 2.1 million number.
The footprint of this area is 105 km2, and so that means that Paris has an average population density within its administrative boundaries of just over 20,000 people per km2.
This is about 4.5x more dense than the City of Toronto as a whole. Which is why if you overlay the outline of Paris on top of Toronto, as Gil Meslin has done over here, you get this:
Ok, just for fun, three maps:
1) The outline of Paris, within the Périphérique, overlaid on central Toronto. 2) Toronto subway lines and stations within that area (including Crosstown). 3) Paris Métro lines (1-14) and stations within that same area. pic.twitter.com/i2xxHWoZGv
To be fair, there are pockets of Toronto that are very dense, even by Paris standards. North St. James Town, for example, was estimated at over 44,000 people per km2 back in 2016. But generally speaking, Toronto is not that.
And Gil’s maps do an excellent job of demonstrating it.
As someone who collects NFT art, I now see a lot of AI-generated images. Usually I can tell when an image was generated by a computer, but sometimes it’s hard to tell and I’m sure eventually I won’t be able to tell. But if I’m being honest, today I find that I have a bias toward art that was created without any AI prompts. Maybe that changes in the future, or maybe it doesn’t.
Either way, the marginal cost of producing new content, such as images and videos, has now gone down to zero as a result of AI tools. (Here are some of my crappy creations.) That means that, if you aren’t already, you’re soon going to be faced with a deluge of things created in this way. This will almost certainly become the dominant form of content that we consume.
I don’t think that we need to be scared by this future, but I do agree with Ben Thompson and others that it’s going to make authenticity and human-content more valuable. In other words, we’re probably going to need to know what is digitally scarce and what is just another thing generated by AI. Thankfully we have a suitable technology for this: it’s called a blockchain.
There is no such thing as an investment with absolutely zero risk. But you can get pretty close to zero-risk with things like US Treasuries and other government bonds, which is why when people think of the “risk-free rate of return” they usually think of instruments like these.
Not completely risk free, but pretty damn close.
Over the last cycle, and specifically between 2009-2021, the risk-free rate was at historic lows. What that meant is that if you wanted to generate any sort of meaningful return, you had to both look to other types of assets, such as real estate, and you had to take on more risk.
How this usually works in practice is pretty simple. Find asset. Figure out how much said asset yields (or could yield). And then decide if the spread you’ll be earning above the risk-free rate is worth the amount of incremental risk you think you’ll be taking on.
One challenge in bull markets is that it can get very competitive for assets, which can lead to investors accepting lower spreads. But regardless, the underlying idea remains the same. If you’re going to take on more risk than no risk, you should be compensated for it.
Today, the problem is a different one. 2022 led to a “sea change” in the market. The risk-free rate is much higher, and that means that previously attractive assets yields are now no longer attractive. Things need to be reset.
It doesn’t feel like this has happened yet, but it has to eventually. That is, assuming rates don’t go back to 0-1%, which I don’t believe they will.
The problem with fun things (y-axis) is that they’re fun. So lots of people want to do them. And if there’s a small or no market for said fun thing, then it’s probably a hobby. (Hobbies are still important.)
Sometimes you can be fortunate where something that previously had no market eventually has a big market. Take, for example, tinkering with computers in the early days.
This is what Chris Dixon was getting at when he said that what the smartest people do on the weekend is what everyone else will do during the week in ten years.
But if this doesn’t happen or if a big market already exists — and you do want to be successful at something fun — it’ll likely follow a power law.
Meaning, you’ll need to be the very best in the world and it’s almost certainly going to be a “slog”. (Bottom right quadrant.) One example of this would be the phenomenon of “starchitects.”
And that’s pretty much it for the fun stuff. The rest of this graph is for things that are difficult, which means that 3 out of these 4 quadrants are difficult and/or a slog.
This is not nearly as much fun as not ever working.
Heatherwick’s reticence makes his latest work more surprising. He is launching a 10-year campaign against the “catastrophe” of how buildings are built. Our cities, he argues, are in the grip of an “epidemic of boringness”. Most modern buildings are too flat, too plain, too straight, too shiny, too monotonous, too anonymous and too serious. They make us unhappy and ill, they make us not want to come into the office.
In his book Humanise, out on Thursday, Heatherwick derides architects as members of a modernist “cult”, which indoctrinates them during their seven-year training into thinking they don’t need the public’s approval. The result is the UK’s commercial buildings are so unloved that they have an average lifespan of perhaps 50 years, leading to huge carbon emissions as they are replaced.
I haven’t read it yet, but something tells me that I’ll probably agree with some/many aspects of the book and be annoyed by others.
What I’ll likely agree with is that our cities should be more playful, beautiful, and creative. They should be more human. And we should be more daring.
But what I’ll likely be annoyed by is the impracticality of the proposed approach(es). There are markets. There exists money. And there are reasons why many of Heatherwick’s projects are “luxury” ones.
Or maybe I’m just being cynical and I should wait and see.
Shoot up the Humber River and pass under various bridges and subway tracks.
Arrive in Weston (which, by the way, was established in 1796). Go west on Lawrence to Royal York (there are a couple of hills here that will get your bum up).
Then bomb down Royal York as fast as you can until you arrive at San Remo Bakery for coffee, donuts, cured meats, and other wonderful things that I don’t normally order.
Many of you probably didn’t click through on this link in yesterday’s post, but it was a link to a book called Emergent Tokyo — Designing the Spontaneous City. What this book is largely about is the idea that Tokyo — usually considered to be the largest urban region in the world — is more the result of bottom-up actions than top-down actions. In other words, it is a kind of complex and self-organizing system.
Some of you may be reading this and thinking that the result would be chaos. But the opposite is, in fact, true. Despite being the largest urban agglomeration in the world, Tokyo is consistently viewed as one of the most livable big cities in the world. How is that possible?
One topic that we’ve been talking about on this blog recently is the planning approach of mandating ground-floor retail in new developments. While certainly good intentioned, this is one example of top-down planning. We are saying, “retail needs to go here because.”
The problem, as we have talked about, is that the market may not want it. It may not actually be viable or desirable. Of course, it is a delicate situation. Because if you don’t provision for it, then you might block it from ever being possible on sites where it clearly makes sense. (We spoke specifically about this, here.)
There is also the opposite question of: where are we not allowing retail?
Maybe there are places where retail activity would be viable today, except it’s currently not permitted. One concrete example of this is Toronto’s laneways. Right now, we only allow residential (throughout our “Neighbourhoods”). But there many people, including myself and planner Blair Scorgie, who have been arguing that they should be mixed-use:
Would office and retail uses actually work in Toronto’s residential laneways? I frankly don’t know. Because they’re not allowed today, it’s largely impossible to know. If we allowed these uses and nothing happened, then we’d have a better idea that there’s little demand for it. (I say a better idea because there still could be other obstacles in the way.)
On the other hand if we decided to mandate non-residential uses in our laneways and nobody did anything, two things might then happen. One, we’d be similarly led to believe that there’s little to no demand. And two, we’d probably be sacrificing the residential use, for which we can say today there is clear demand.
There are also the considerations that demand will almost certainly change over time and be inconsistent across different locations. For instance, maybe retail doesn’t work in this laneway, but it will work in that laneway. Can we actually plan for this?
Top-down approaches generally assume that we know all or many of the answers. It presumes that we know that this street should have ground-floor retail and this street should not. It’s also about control. More bottom-up approaches admit that it’s impossible to plan for everything and that there could be latent potential that we’re not even thinking about.
Of course, there is something naturally unsettling about this approach because it is, by definition, unknowable. And it relinquishes a certain amount of control. Maybe a restaurant will appear here or maybe it won’t. Maybe someone will open a small office in this laneway or maybe they won’t. Either way, the potential for change exists.
But I think this should be seen as empowering, transparent, and highly efficient. It is a way of reducing the barriers to entry and allowing more urban creativity and ambition to shrine through. I believe, for example, that if we made it easier, cheaper, and possible to open a small restaurant (perhaps in a laneway), we would have more and overall better restaurants in the city.
And as we have seen in the case of Tokyo, the result of more flexibility is not necessarily chaos. It can be a highly livable city that has people wondering, “how did they manage to plan such a large city so well?”
I know I know this, but this is still an alarming chart:
This is saying that, as of 2016, over 36% of Americans were considered to be obese. In Canada, the number was just under 30%. And in the UK, it was just under 28%, which is the highest rate in Europe.
We often talk about the health benefits of living in a walkable community. And there’s lots of research to back up that this is in fact the case: obesity rates tend to be inversely correlated with higher prevalences of active transportation (walking, cycling, and so on).
An increased reliance on cheap, ultra-processed food, which accounts for 57 per cent of what Britons eat according to a 2019 study conducted by researchers at the University of São Paulo, suggests that the health crisis is unlikely to change anytime soon without intervention, argue campaigners.
It can be hard to eat healthy, especially if you don’t have a lot of money and you live a busy life. But in my view, we need to change the course of this graph. And two very good places to start looking would be (1) our built environment and (2) the Japanese diet.
Actually, now that I think of it, Japanese cities would be a good place to look as well.
In may ways, this recent article by Brian Potter about how fast cities can grow, feels intuitive: Small cities tend to grow faster than big cities (on a percentage basis) and, as cities get bigger, their growth rates tend to decline. It is, however, still interesting to see the data behind this intuition:
A city of less than 100,000 might be able to have growth rates of 10-20% or more, and cities of up to 3-400,000 can potentially have growth rates in the neighborhood of 10-15%. Potential growth rates tend to fall as cities grow larger, and cities above 1 million people almost all grow at less than 10% per year, and usually less than 5% per year. The US, the Middle East, Southeast Asia, Africa, and South America all seem to have followed this basic pattern, assuming the data is reliable.
It is also a good reminder just how much of an outlier China is:
Unsurprisingly, since 1950, Chinese cities have mostly exhibited higher growth rates than US cities. Only around 12% of US data points are above a 5% growth rate, whereas for China this is close to 50%. China also has 2.5x the fraction of cities growing above 10% per year, and 3.3x the fraction of cities growing above 15% per year.
And some cities are outliers even within China. The most notable here is Shenzhen, which saw enormous growth after it became China’s first special economic zone in 1980. At a population of around 200,000, Shenzhen was growing at 35% annually, and it was still growing at over 20% annually when its population crossed 2 million.
Just imagine these numbers compounded. Even small variances can result in significantly different outcomes over time:
New York’s growth rate, however, declined less than Los Angeles or Chicago as the city grew larger. At around 3.5 million people, New York was still growing at over 3% per year, compared to less than 1% for LA and Chicago. This may not sound like much, but it’s the difference between doubling in size every 23 years vs. every 70 years.
Now here’s what I’m wondering after reading the article: Should we be thinking of city size as the single most important factor in determining urban growth? Because my mind immediately went to population densities, zoning controls, and other factors that might constrain or encourage growth.
But the data seems to suggest that, for many cities, this doesn’t seem to matter over the long run. It is as simple as saying, “this city has X number of people and so it’s more than likely growing at somewhere around Y% per year.”
That said, what’s up with China? What is it that allows a city of 2 million people to still grow at over 20%? Is it the sheer influx of people migrating from rural to urban areas? Or is it that you need a one-party authoritarian state to really clear the way for growth?
As cities get bigger there does appear to be a natural tendency toward slower growth. Part of this is the low base effect. But the declines are not always consistent and there are meaningful outliers. I am now curious to know what, for the most part, causes these differences.
