Month: January 2024

• Touchdown in Lyon

  

  We landed in Lyon around 12:30 PM local time today. And it was about 15 degrees and sunny. This doesn’t bode well for fresh snow in the mountains. But it does bode well for getting a nice raccoon tan.

  Our flights and connections were heavily delayed, and so I had started mentally preparing for the possibility of an overnight layover in Montreal. Thankfully, we managed to make our connection. Unfortunately, some of our skis didn’t. Hopefully they come tomorrow.

  It’s for this reason that I usually throw an AirTag in my bag(s). It probably won’t help you get your delayed luggage any faster, but at least it gives you some peace of mind knowing where it is.

  For whatever reason, I also slept really well on last night’s flight. I don’t generally sleep well on planes. So I’ve been up all day, and we’ve been eating our way through Lyon.

  The general rule of thumb with these overnight European flights seems to be that you want to stay up as best you can once you arrive. If you nap, it’ll only prolong the adjustment period.

  Our first meal was during that awkward time in between lunch and dinner when most restaurants are closed. But we went to Bistro Bondy (our hotel recommended it) and it was exactly what we needed. For dinner, we ended up at La Tête de Lard and it looked something like this:

  

  

  

  There was a bit of cream and cheese involved in this meal and so, at this point, I am ready for bed. See you all tomorrow.

  2024.01.25

• 13th annual+

  

  It’s that time of year again: the annual ski and snowboard trip.

  Regular readers of this blog will know that this happens each and every year, provided a global pandemic isn’t currently underway. Last year we went to Park City and this year we’re off to Lyon and Les 3 Vallées. Is there anything better than urban + mountain? I don’t think so.

  This year’s is also unique in that I selfishly upgraded it into a slash bachelor party for myself. And that’s why I’m calling it the 13th annual, plus.

  So what should you expect on this blog for the next 10 days or so?

  You should expect more travel, food, and snowboarding-related content, as well as more photos. I generally never travel without my Fujifilm. I’m also thinking about experimenting with more real-time posts, and possibly even multiple posts per day. Basically something more akin to a social feed. We’ll see if that happens.

  Regardless, if beautiful European cities and sublime mountains aren’t your thing, you may want to check back in early February for our regularly scheduled city building programming.

  Photo by Inés Álvarez Fdez on Unsplash

  2024.01.24

• Rear-yard suites and secondary suites built in Toronto over the last decade

  Here is a mapping, from the University of Toronto’s School of Cities, showing the number of “closed” building permits issued in Toronto between 2013 and 2023 for both rear-yard suites (laneway houses and garden suites) and secondary suites (like basement apartments).

  

  A “closed” building permit probably means that construction is complete. However, it is not uncommon for a permit to inadvertently remain open. This happened to me with Mackay Laneway House. The permit was supposed to be closed, but it wasn’t.

  So here’s the same mapping with open (i.e. active) permits also turned on:

  

  Three things immediately stand out:

  1. Secondary suites seem to be somewhat evenly distributed across the city.
  2. Rear-yard suites are heavily concentrated in the older areas of the city, flanking the downtown core.
  3. North Toronto is wealthy and isn’t having either of these housing typologies.

  Looking at these mappings, it probably seems like a decent amount of new housing. But that’s not really the case:

  • From 2013 to 2023, Toronto issued 2,209 building permits for secondary suites (1,525 have been closed and 684 remain open as of December 31, 2023).

  • And from 2020 to 2023, Toronto issued 898 building permits for rear-yard suites (192 have been closed and 706 remain open, which does suggest some increased adoption). Rear-yard suites only became permissible in 2018, which is why the date range is shorter.

  To be fair, I would imagine that many secondary suites get built without a building permit. So I think the above number is probably underestimating actual supply. But even still, it doesn’t change the conclusion: A lot more needs to be done to increase the supply of new housing in Toronto.

  2024.01.23

• An overview of rental housing in France

  Rental housing in France is both heavily regulated and supported through dedicated public funds. Here’s a high-level overview of what that means (via this 2021 Brookings case study by Arthur Acolin):

  • Homeownership rates in France went from 35% in 1954 to 56% in 2001
  • As of 2018, 58% of French households own, 40% rent, and the remaining 2% supposedly get free housing from either their employer or a family member
  • Not surprisingly, younger households are most likely to rent (the figure is > 60% for people aged 18-29)
  • Household size seems to play a major factor in how likely people are to live in public housing

  

  • France has some 4.5 million public housing units and 17% of all households live in them (which represents about 43% of all renter households)
  • Within the unsubsidized rental market, 93.5% of households live in homes owned by individual investors (this is as of 2013) and only about 3.5% live in homes owned by institutional investors
  • This is pretty typical of Europe, where multi-family isn’t an established real estate asset class like it is in North America; so for those of you who like to hate on individual condo investors, check out France
  • In the decade between 2010 and 2020, 28 metro regions in France adopted some form of rent control and, in a few markets, like Paris and Lille, there are also maximum rents that can be charged for specific housing types

  If you’re interested in rental housing, Brookings also has articles covering the US, Germany, Spain, Japan, and the UK. They can be found here.

  2024.01.22

• Condominiums — affordable or luxury?

  

  It is disappointing to me that we often vilify all condominiums as being “luxury condos.” I think the rhetoric is disingenuous and I think it distracts us from finding more productive solutions. As Mike Moffatt points out in this thread, if you look at virtually all major cities in Canada, the most affordable housing options are going to be condominiums and not low-rise freehold houses.

  In his case, he looked at current for sale listings in London, Ontario, and found that for homes under $400k, about 81% of them were condominiums, and for homes over $1,200,000, only 4% of them were condominiums. Again: the real “luxury homes” are the low-rise houses that not the condos.

  Now to be fair, John Pasalis is not wrong in responding to the thread and saying that on a per pound basis, or a per square foot basis, condominiums are actually more expensive. I’ve been saying this for years on the blog. When measured this way, mid-rise buildings are one of if not the most expensive housing typologies.

  So John’s argument is that, while condominiums may be the more affordable option for 1-2 person households, if you’re a family in need of more space, low-rise housing is likely going to be more affordable for you on a per square foot basis. And I would agree with this statement.

  The problem with this approach in the real world, though, is that people don’t buy and afford homes based on this metric. You can’t go to a bank and say, “I want to buy this house for $1.7 million dollars because it’s only $680 per square foot when I include the basement, and that’s better value than this 700 square foot condominium selling for $1,400 psf.”

  Sorry, the bank is going to tell you what total price you can afford based on your income. And that’s why condominiums in our market have tended to serve as a critical entry point for first-time buyers. They’re the most affordable option in terms of their total sale price.

  So in my view, labelling all condominiums as “luxury” is not exactly productive. It ignores their role in providing more affordable homes; it overlooks the supply constraint that low-rise houses represent in most of our cities; and it’s a distraction from the more systemic issue at hand: how do we make housing more affordable for everyone, including families?

  Photo by Marcos Paulo Prado on Unsplash

  2024.01.21

• The Allen key

  I’ve been assembling a lot of things over the past few weeks, and that got me wondering.

  IKEA did not invent the Allen key. Though today, it might feel that way. Canadian Peter L. Robertson first commercialized the square socket in 1908. And in 1909, American Willian G. Allen patented the hex varietal.

  Due to an increased interest in interchangeability, hex nuts and keys would go on to become the dominant mode of fastening after World World II. And in English-speaking countries, the name Allen has largely stuck.

  They’re cheap to make and you get built-in leverage with its longer arm.

  IKEA first began using hex keys in the 1960s. Their philosophy was: “You do your part. We do our part. Together we save money.” Meaning, you assemble the things yourself. Here’s a set of assembly instructions from 1968:

  

  Today, most of us probably take it for granted just how radical of an idea this was. IKEA had smartly figured out that flat packing furniture saved a ton of money for everyone. The challenge was that it then had to get everyone accustomed to putting together their own furniture.

  But they more than did that. They arguably ushered in a revolution in furniture. And they did it on the backbone of a simple, yet revolutionary, device that, over a century later, most of us still call an Allen key.

  2024.01.20

• Big global events, small mountain towns

  I was speaking with our lawyer in Park City this week, and he commented to me that he wouldn’t be going into the office next week because Old Town would be too hectic with the Sundance Film Festival going on. His office is right on Main Street.

  When small mountain towns host major international events, there are going to be spillover effects. This is true of Sundance in Park City (population ~8,500) and it is true of the World Economic Forum, which was hosted in Davos (population ~10,000) this past week.

  Perhaps the most obvious impact is that people can rent out their homes for large sums of money. And so lots of people both do that and try to profit maximize while doing it. Here are some anecdotes from Davos (via NZZ):

  Ten days before the WEF, there are still 25 listings on the Airbnb internet platform. The prices here range from 8,000 to 56,000 Swiss francs. The son of an apartment owner says that his family receives 12,000 francs a week for their three-room apartment, which is quite close to the convention center. However, he says he assumes that they could achieve significantly more. The family rents out the apartment through an intermediary.

  Another interesting impact in Davos happens on the retail side (also via NZZ):

  According to expert Robert Weinert, the average rent per square meter of retail space in Davos is 248 Swiss francs. A businessperson renting a storefront of 80 square meters must therefore pay almost 20,000 francs in rent per year. However, if that business vacates the store during the WEF, it can earn 60,000 francs – three times the annual rent for the facilities.

  What this means is that some retail spaces remain vacant all year, just so that they can be available for when the WEF arrives and people need temporary commercial spaces. And why wouldn’t this be the case: 20,000 francs for the year or 60,000 francs for a week. If I’m the landlord, I’ll take the additional 40,000 francs and not think about the property for the rest of the year.

  Of course, if you’re trying to create a vibrant community with things, like, occupied retail spaces, then this isn’t ideal.

  2024.01.19

• Airbnb still has a lot of accommodations

  There are a lot of headwinds facing Airbnb. Cities around the world seem to be systematically making it more difficult to be a host. New York City, as many of you know, recently made it so that you need to be physically present while the dwelling is being rented. That is pretty limiting. Similar things are happening in non-urban markets too. North of Toronto in Muskoka, there’s a draft by-law that will, among other things, limit short-term rentals to 50% of the total number of days within certain time periods. That eliminates the possibility of doing this as a business. So in many ways, it’s easy to be pessimistic about the future of Airbnb.

  But at the same time, if you step back and look at the bigger picture, there are over 7 million active listings on Airbnb. This effectively makes it the largest hospitality brand in the world. There are more accommodations on Airbnb than with Marriott, Hilton, Intercontinental, Wyndham, and Hyatt combined. (The below chart is from Scott Galloway.) It’s also important to point out that while Airbnb doesn’t own any of its own supply, the same is true of most hotel brands. They are, brands. The difference is that Airbnb created a more scalable platform and a more decentralized approach to aggregating supply.

  

  The numbers also don’t suggest that things are slowing down for Airbnb. (Here’s their Q3 2023 shareholder letter.) Active listings on the platform grew 19% YoY in Q3 2023 (or by almost 1 million listings). Revenue is up. Free cash flow is up. And in Q3 of last year, the company repurchased $500 million of stock, bringing their one year total to somewhere around $3 billion. So despite all of the efforts to curb short-term rentals within our cities, the company, at least for now, seems to be holding up just fine. And if they can successfully diversify beyond their core business, there could even be reason to be bullish on the world’s largest hospitality brand.

  Full disclosure: I am long $ABNB.

  2024.01.18

• How would you make this street better?

  Let’s resume looking at sidewalks and public spaces.

  If you look in the City of Toronto’s Official Plan for the stretch of Dundas Street West that runs between Dupont Street and Bloor Street West, you’ll find a map that looks like this:

  

  Red signifies “Mixed Use.” And so if you were to just look at this map, you might naturally assume that, in the real world, this is a continuous main street that connects The Junction neighborhood down to Bloor. But that’s not actually the case. Instead, it looks like this:

  

  Because of the rail corridor on the east side, it is a single-sided street. And generally speaking, these don’t make for the best retail streets. But it also has narrow sidewalks and a compromised public realm. If you go back to the map I shared yesterday, you get this:

  

  I don’t think 30cm is entirely accurate here, but that’s beside the point. What matters is that this is just one of many examples in the city of a discontinuous public realm. (Here’s another, undignified example, from Parkside Drive.)

  Over the years, there have been a number of design concepts proposed. Below is one by Brown + Storey Architects that was done I don’t know how many years ago. Their proposal widened the sidewalks along this stretch, and added bike lanes. They also proposed a roundabout at the intersection of Dundas, Dupont, and Annette, which is another matter that needs addressing.

  

  

  But none of this has been implemented and I don’t know of any plans to do it. When we were going through the rezoning process for Junction House, we were made aware of some transportation studies that had been done for the above intersection. But that’s about it. There wasn’t an actual ETA.

  However, now that my commute consists of walking up and down this part of Dundas, I’ve been thinking more about how it could be improved.

  I think there’s no question that the sidewalks need to be widened. It would also be helpful if there were crosswalks to facilitate getting off the south end of this exotic island:

  

  But equally important, I think that something should be done about the single-sided nature of the street. Given that there’s limited width, my mind immediately goes to shipping containers, or something similar, to start activating the east side of the street.

  This has already been done further south on Dundas (east of Bathurst):

  

  And it could work here too. Already there’s a Blondie’s Pizza anchoring the south end of this stretch (really fantastic pizza, by the way):

  

  But I would love to hear your ideas, as I’m currently in the market. I also don’t think that you necessarily need to be from Toronto in order to comment. Great streets are great streets. So if it were up to you, what would you change, if anything, about this part of Dundas Street West? Let me know in the comment section below.

  2024.01.17

• Toronto’s discontinuous sidewalks

  

  Dave LeBlanc recently published an article in the Globe and Mail called, “How wide is your sidewalk?” And in it, he links to this sidewalk map of Toronto (pictured above), which uses open data from the city to plot sidewalk widths.

  It was originally intended as a map of where social distancing is possible (oh, how far we’ve come), but today it serves as a really interesting way of looking at the city. What it makes clear to me is that we could use a lot more sidewalk, and that too many areas of the city have a discontinuous public realm.

  Sometimes there’s very little that can be done until an adjacent property gets redeveloped. And when this does happen, the city will demand pedestrian widenings. But in other cases, there are solutions that could be implemented today, without private participation.

  So I sure hope that someone is looking at a map like this and trying to come up with holistic solutions for making Toronto a more walkable and more pedestrian-friendly city.

  Note: Sometimes a narrow sidewalk does not necessarily equal an inhospitable street. I mean, look at this example.

  2024.01.16