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: September 2024

  • Design solves problems

    A long time ago, I attended an architecture presentation that started with talking about cabover trucks. See example above. Cabover is the name for trucks where the cab sits above the front axle. This is different from more conventional trucks where the engine sits in front of the driver. Here you get more of a flat face. Again, see above.

    This truck style is credited to Viktor Schreckengost, who first came up with the design in 1932 and later patented it. And it’s a pretty big deal in the history of trucking because of the simple fact that this design shaved several feet off the length of the tractor.

    This meant something in the 1930s because, at the time, total truck lengths in the US were limited to 42 feet (12.8 m). So by minimizing the depth of the tractor, it created room for a bigger trailer. In building terms, Viktor had found a way to increase the ratio of rentable area to gross construction area.

    The point of this example in the presentation was to show that good design solves real problems and that this is how their firm approaches projects. They aim to create value. And I remember this really resonating with me, because it’s how I also like to think about design.

    Admittedly, there is an element of design that involves making things look good. That’s important too. But it’s linked to solving problems. For example, one thing you’ll often hear people say when talking about design is that things should look “intentional.” You want to feel that real thought was put into it.

    Arbitrary is bad. For some reason, it doesn’t look as good.

    Well, what could be more intentional than solving problems and creating value?

    Image: Wikipedia

  • Leslie Lookout Park

    This morning I rode out to Toronto’s new Leslie Lookout Park, which opened two weeks ago. I came down Cherry Street, crossing the new north bridge, and then I went all along Commissioners Street, crossing its new bridge.

    It’s great to see the Port Lands area continue to develop. Every time I’m down there, it feels more and more real — like an extension of the city. Now we just need to start developing within the blocks.

    If you find yourself at Leslie Lookout, make sure you locate Claude Cormier’s heart up in the tower. Claude’s firm CCxA was the landscape architect behind the project; but sadly, he passed away last year.

    Exactly 1 year before the opening of this park.

  • Toronto’s highway 407 is doing what it is supposed to do

    In Google’s guide to its maps, there is a section on live traffic congestion, and in it, this image is used:

    It is a map of the Toronto region, and not surprisingly, it is showing traffic congestion on the 401 highway. But what’s interesting about this image is that there’s no traffic at all on the 407 express toll route. (This is the green highway running generally parallel and north of the 401, for those of you who aren’t familiar with Toronto.)

    This is, of course, accurate. A 2019 study by the Canadian Centre for Economic Analysis called the Economic Impacts of Highway 407 found that, at the time, an average of 413,000 drivers were using the 407 highway each weekday. And of these trips, more than 85% of vehicles were travelling at or above 100 km/h. This translates into a traffic congestion index of almost zero.

    During this same time, the highway 401 through Toronto showed that about 85% of vehicles were travelling below 50 km/h. Meaning, lots of congestion. This also had a significant impact on collision and fatality rates. On the 407, both were about half of what they were on the 401. (I couldn’t find any more decent data, but if you have it, please share it in the comments.)

    The reason for these differences is simple: the 407 charges for congestion. Here are the current per kilometer weekday rates for light vehicles travelling westbound:

    Naturally, there are people who think the 407 is too expensive and that it shouldn’t have been privatized. But the reality is that it works; really well in fact. And this is the only method that has been proven to reliably combat congestion. We can go ahead and spend a gazillion dollars building a new tunnel under the 401, and double the number of lanes (it’s already 18 lanes at its widest point), but we already know that it won’t solve our congestion problem.

    Either we price roads and congestion, or we don’t. But if we don’t, then we need to be brutally honest with ourselves about the economic trade off that we are making: free/underpriced roads = traffic congestion, and accurately priced roads and congestion = less traffic. The choice is ours. But know, there’s no such thing as a free lunch.

  • The Bentway Islands

    As many of you know, Toronto has a highly successful public space underneath the Gardiner Expressway called The Bentway. I have ice skated in this space during the winter and I have listened to hard techno in this space during the summer. It has become a public space anchor in the city. Ilana Altman and the team are doing great work. And this week, they just announced that Field Operations (New York) and Brook McIlroy (Toronto) have been hired to design a major expansion. Called The Bentway Islands, this next phase consists of three “islands,” totalling 11,500 m2 (~125,000 ft2).

    Here’s a map:

    And here’s what the spaces look like today:

    Both of these firms do fantastic work, and so I’m excited to see what they come up with. (Field Operations is the firm behind New York’s High Line.) But if I can offer two unsolicited (yet related) suggestions, they would be: 1) Let’s incorporate more commercial uses and 2) let’s aim for these three parcels to not actually feel like urban islands. Generally speaking, the spaces underneath highways aren’t the most desirable. They also tend to be surrounded by inhospitable urban environments. Stitching them in and creating continuity in the fabric of the city (existing example, here) is the best way to make the highway above more or less disappear.

  • Mapping 15-minute cities

    This is an interesting map to play around with. It allows you to see how many 15-minute neighborhoods and cities there are around the world. And it works by calculating the average time it takes to walk or bike to the closest 20 points of interest in 10,000 cities. These points include all of the usual suspects like places of work, schools, healthcare institutions, grocery stores, and so on. A blue cell indicates an average walk time < 15 minutes, and a red cell indicates an average walk time > 15 minutes. The darker the color, the shorter or longer the average time in minutes.

    By this measure, it’s hard to beat many/most European cities. Here are Paris and Barcelona:

    The city propers are completely blue, and you have to go pretty far out (or up into mountains) to find areas that don’t have 15-minute conveniences.

    Toronto has a strong core and isn’t terrible overall, but expectedly, we aren’t as uniform and as deep blue as Paris and Barcelona:

    Where things get really interesting, though, is when you look at cities like Dallas and Houston:

    It’s clear where these cities stand on walkability.

  • The art of high-rise living

    Today, I’m excited to share that I’ll be attending the second annual Elevate event this December as an industry ambassador. This means I get to ride alongside industry celebrities like Norm Li. (He better be DJ’ing.)

    Put on by Zonda, in partnership with Livabl and ARCHITECT Magazine, the event is focused exclusively on “the art of high-rise luxury living.” Everything from the overall state of the housing market to how to sell branded residences.

    Here’s the agenda and here’s the list of speakers.

    I wasn’t able to attend last year, but I heard from a number of industry friends that it was very well done, which is why I agreed to participate this year. That now means I have a discount code you can all use if you’d like to attend — BRANDONVIP30.

    For those of you who like art and culture things, the event also happens to fall right after Art Basel. This was done on purpose, and so now you have at least two good reasons to be in Miami Beach in December.

  • The growth of branded residences

    A branded residence is, as the name suggests, a residential building with a known branded attached to it. Historically, these have tended to be hotel brands. But it really just needs to be any brand that people know, care about, and will pay a premium for. So it could also be a fashion brand, a car brand, or whatever else.

    This is a growing segment of the residential market. According to UK-based Savills, there were only 15 or so of these “schemes” in the 1990s (the UK uses scheme in lieu of project, which always sounds conniving to me), but by the end of this decade they expect the pipeline of branded residences to exceed over 1,200.

    I would also argue that projects designed by celebrated architects and/or designers are a form of branded residence. And this is not being captured in Savills’ number above.

    Whatever your definition, today, the branded residence capital of the world seems to be Dubai, which feels right. And the biggest brands, by what appears to be a long shot, are Four Seasons and Ritz-Carlton (hotel side), and YOO and Trump (non-hotel side). Here are the full rankings from Savills:

    This is an interesting part of the real estate business for a few reasons. One, it makes sense. A New Balance shoe that gets co-branded with Aimé Leon Dore unlocks additional value for both sides. ALD has a brand that certain people care about. So, of course the same would be true of real estate paired with the right brand.

    Two, it’s a growing market, and I think this is aided by the fact that development is an intensely local business — so it can be hard to grow a globally-significant brand on your own. Sometimes you just need to borrow someone else’s.

    And three, it’s usually a less risky approach to getting your name on buildings. Branded residences typically operate on a licensing model, which means developers pay for the right to use the brand. The brand may also capture some of the upside in the form of a percentage of sales. That’s less risky than putting up your own money.

  • London’s clean air zone

    In 2019, London implemented something known as an Ultra-Low Emission Zone (or ULEZ). The intent was to reduce the number of older and higher-polluting vehicles entering and driving around the city.

    It works like this: If you have a vehicle that does not meet the ULEZ emission standards, you need to pay a daily charge of £12.50. This applies all day every day (except Christmas) and it is in addition to London’s congestion charge.

    It’s also done entirely through license plate cameras. If you enter the zone, don’t have an approved plate, and don’t pay the charge within a few days, you get sent a fine. The result is that London’s ULEZ is now the largest clean air zone in the world (at least according to London).

    It also achieved its intended purpose. In 2017, only 39% of cars entering London would have met the ULEZ emission standards. Today the number is over 95%. Meaning, most people don’t actually pay the charge.

    At the same time, nitrogen dioxide levels in the zone have more than halved, improving overall health outcomes. It’s a perfect example of taxing the things you want less of. What’s also interesting is that there were positive second-order consequences.

    Vehicle traffic as a whole declined by about 9% in the first year, with no evidence of displacement to other areas. And according to this research study, it actually encouraged more kids to walk and take other forms of “active transport” to and from school.

    Seems like a no brainer to me.

  • Rent control and road pricing — economics is the study of choice

    Yesterday’s post tried to pit politics against the realities of how we know cities and economics work. So today, I thought I would share a set of memos from Howard Marks (of Oaktree Capital) titled Economic Reality, Political Reality (which he refers to as an oxymoron), and Shall We Repeal the Laws of Economics?

    In this last one, he specifically talks about things like price gouging (starting with the grocery industry) and apartment rent controls. Each is worth a full read when you have the time, but here I’ll leave you all with a few city building-related thoughts.

    Marks describes economics as the study of choice. And within these choices, there are many complicated moving pieces and second-order consequences. Take, for example, rent control in New York City. What rent control does is stop the free market from being able to freely set rents. The result:

    A person in favor of this arrangement would argue that it maintains affordability and diversity. What it means in purely economic terms is that some people who couldn’t afford to live in New York City if rents were set by free-market forces are able to live there if they’re lucky enough to secure an apartment with regulated rent. But other people who would like to live in New York City and can afford higher rents can’t do so because there are no apartments for them. And lastly, landlords that have apartments that are somehow unregulated can command higher rents than would be the case if additions to the supply of apartments weren’t being discouraged. It’s a matter of personal philosophy whether this is good or bad. But clearly, the laws of economics and the actions of free markets aren’t at work in New York City. Someone in government is making the decisions.

    Much like inclusionary zoning in the case of new housing, the tradeoffs with regulated rents are that you get (1) less overall housing supply and (2) more expensive prices for the people that can pay market rents.

    You could argue, as Marks suggests, that these are acceptable outcomes; but regardless of your opinion, there are real consequences to this policy decision. There’s no such thing as a “free lunch” in economics, and consequently there’s no such thing as no-cost affordable housing. The question is: Who pays?

    Going back to the topic of traffic congestion from yesterday’s post, Toronto’s general reluctance to implement any form of road or congestion pricing is also an economic choice. We have priced our roads so cheaply that demand is always going to outstrip supply. And this is expected. What we are experiencing today is a natural market outcome.

    Targeting bike lanes as part of the problem is meant to counter this by increasing road supply. Less bike lanes means more space for cars, right? But the second-order consequence of this choice is that you push people off their bikes (which take up less road space) and into cars (which take up more road space). So demand is also likely to increase.

    The stark reality of solving traffic congestion is that it will require greater change. It will mean fewer people driving, more people taking transit and biking, and the people who do continue to drive will have to pay more for it.

    Of course, this is not what any politician wants to talk about. As Marks says: “In the world of politics, there can be limitless benefits and something for everyone. But in economics, there are only tradeoffs.” The tradeoff we have decided to make is cheap roads in exchange for crippling traffic congestion.

  • Toronto’s congestion crisis needs solutions, not politics

    People in Toronto are deeply and rightly frustrated about our traffic. We have truly world-class congestion. But here’s the thing, the way we’re going about solving this problem is all wrong.

    Transportation staff seem to believe that congestion charges would not reduce or deter traffic from coming into Toronto. Never mind all the global precedents, never mind that we have the tolled 407 highway to look to, and never mind that economics tells us that when the price of something increases, the quantity demanded decreases.

    Instead, we seem to think that we can solve this problem with fewer bike lanes, improved traffic management, and better policing, including higher fines for disobedience. (Interestingly enough, higher fines are supposed to deter people, but congestion charges won’t do the same. I’m confused.)

    None of this will fix the mess we’re in.

    This is a case of politics over data and experience. Identify something that people are pissed off about, and then create the illusion that you’re doing something to fix it. Good politics. But the reality is that this problem is much trickier to solve. It will require vision and meaningful change. That’s a much tougher sell.

    Think of this way. Can you identity a large car-oriented global city with millions of people that doesn’t have a traffic congestion problem? Even the Katy Freeway in Houston, which counts as many as 26 total lanes, has a congestion problem. And the last time I checked, it didn’t have any bike lanes.

    https://twitter.com/joshuahind/status/1837347617304424620

    Now let’s look at the largest city region in the world — Tokyo. The city proper has about 14 million people and the broader region has about 41 million. This is the entire population of Canada in one city region, and yet it’s generally viewed as being one of the most well-run and efficient cities in the world. How do they do it?

    Here are the modal splits within Tokyo’s 23 wards (2018 data):

    • 36% public transport (rail and bus)
    • 27% passenger cars
    • 23% walking
    • 14% bicycles and motorcycles

    Now compare this to the splits in Toronto’s census metropolitan area (2021 census data):

    • 76% passenger cars
    • 16% public transport
    • 5% walking
    • 1% bicycles
    • 2% other

    Of course, if we were to look at the modal splits within the core of the city they would look quite different and much closer to Tokyo’s numbers. This is why it can be so hard to achieve consensus on many city building issues — we are quite literally a divided and different kind of city.

    In the end, this is the root cause of our traffic problem. The vast majority of people in this city region drive. And they are not to be blamed. It’s because we’ve designed this to be the only practical option.

    But if we’re serious about solving congestion, it’s going to require some bold changes. It’s going to require reducing this 76% figure. We can fool ourselves into thinking that better construction coordination, fewer bike lanes, and higher fines will somehow solve this enormous and deep-rooted problem, but the inconvenient truth is that they won’t.

    What we need are real solutions. Is anyone going to take the lead?