May 18, 2024
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Salt Lake City wants to turn Main Street into a pedestrian promenade

Last year, I wrote about how Salt Lake City wants to build a new linear park around its downtown. That post can be found, here.

Fast forward to today, and the city’s Department of Economic Development has just published a new comprehensive 215-page study that supports turning Main Street into a pedestrian promenade.

Specifically, the area running from South Temple to 400 South, and including 100 South from Main to West Temple:

As part of the study, they highlight a number of successful case studies from around the world, including 16th Street Mall in Denver, Bourke Street Mall in Melbourne, and Queens Quay here in Toronto.

In the case of Denver, they cite the one-mile stretch as single-handedly generating over 40% of the city’s total downtown tax revenue! And in the case of Toronto, they refer to Queens Quay as a global destination. (Toronto readers, do you agree?)

Like most city building initiatives, this vision is will take years to realize. But it’s interesting to note that, of the eight design alternatives included in the study, there is already one clear preference within the local community — option B.

Option B is a pedestrian/transit mall, but with multi-use trails. In other words, it is a no-cars-allowed alternative that would still allow bicycles and scooters. Here’s the street section:

If you’d like to download a copy of the full Main Street Pedestrian Promenade Study, click here.

May 17, 2024
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The US is building a lot of apartments right now

As of November 2023, it was estimated that there were 988,000 homes under construction in multi-family buildings containing 5 or more units. This is in comparison to 680,000 single-family homes, according to US Census data. (Looking at the below graph, it’s also interesting to see how the supply of single-family homes dropped off after the global financial crisis and multi-family apartments took off.)

All of this means that in 2024, the US is on track to complete more apartments than it has in many many decades. In fact, exactly similar to what we experienced here in Toronto, if you want to find a comparable multi-family supply number, you need to go as far back as the 1970s (see below). Of course, the US had fewer people back then, and so on a per capita basis, it was building more housing.

Still, all of this new supply is having an impact. Apartment List recently published its national rent report, over here. And overall, it found that:

Rent increases are currently being moderated by a robust construction pipeline expected to deliver a decades-high number of new apartment units in 2024.

More specifically, they found that the cities with the most supply are now seeing the largest rent declines:

Many of the steepest year-over-year declines remain concentrated in Sun Belt cities that are rapidly expanding their multifamily inventory, such as Austin (-7.4 percent year-over-year), Raleigh (-4.4 percent), and Orlando (-3.9 percent).

If you’re an apartment developer, this is not what you want to see. It means that increased competition is creating downward pressure on rents and that vacancy rates are probably rising. But if you’re someone looking to rent an apartment, this is exactly what you want to see. You want more affordable housing. And so, as a consequence, you want more homes to be built. Because when supply outstrips demand, this is what you get.

Charts: Apartment List

May 16, 2024
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Just give me the fastest option

I had a dinner in the suburbs this evening. And so in the afternoon today, I opened up Google Maps to figure out how I was going to get there.

I didn’t have my car with me — because I hate driving into the office — so in my mind, I was either going to take transit or take an Uber.

These are the time estimates that Google gave me:

It was going to take me over 4 hours to walk there. Over an hour to drive there. And 47 minutes to take the train there. Interestingly enough, cycling was also going to be faster than driving.

As soon as I saw this, I shut down the app and decided I would take the train. All I was interested in was the absolute fastest option. And for me at that moment, it was the train.

I recognize that this isn’t always the case. Sometimes driving is much faster than taking transit. It depends on a number of factors.

But as a general rule, when it comes to big and dense cities, you really can’t beat trains and bikes for moving the greatest number of people, as quickly as possible.

May 15, 2024
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Seoul’s infamous modernist megastructure

Seun Sangga is Seoul’s first mixed-use complex.

Constructed between 1967 and 1972, the elaborate structure sits atop a strip of land measuring 50 m x 1.2 km, which had been flatted during the Second World War as a way to contain the spread of fire in the event of an air raid and to act as an evacuation corridor.

It’s a modernist development that is very much of this period. It’s massive, complicated in section and, in many ways, completely disconnected from its surrounding urban context. Flanking the various buildings are elevated and covered walkways.

So it is perhaps not surprising that this development has followed a similar fate to many others of this era. While it was initially viewed as being quite modern and desirable — it was one of the first buildings in Seoul to have elevators — Seun Sangga was quick to start showing signs of decline.

In fact, by as early as the 1970s, the complex became known for its porn shops and a bunch of other informal economy-type activities.

It’s an interesting, though familiar, story.

If you’d like to learn more, I recommend you check out this episode of the Urbanist and this article from The Architectural Review. The photos in the article are good accompaniment to the audio-only Urbanist episode, so make sure you flip through them.

May 14, 2024
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Do great cities need tall buildings to help them thrive?

In other words, are tall buildings a prerequisite to competing in today’s global economy? It’s an interesting question. And Jason Barr — professor of economics at Rutgers University-Newark — does think they are an important ingredient. So much so that he wrote a book on the topic called, Cities in the Sky: The Quest to Build the World’s Tallest Skyscrapers. While Jason does acknowledge that not every city needs them, he does suggest that not having them could hinder a global city:

If you look at Paris’ global ranking in terms of its importance in the world economy, as measured by the size and number of international firms, it’s falling. Paris in 2000 was ranked fourth, and by 2020, it was down to eight, losing out to skyscraper cities such as Singapore and Dubai.

In the last decade, Paris has shrunk by 122,000 residents. As reported by Forbes, “Many of those leaving are choosing either the suburbs or countryside around Paris, or they are relocating to France’s smaller cities such as Bordeaux, Lyon, and Toulouse.” By limiting its building stock, Paris is driving up housing prices, pushing out residents, and causing suburban sprawl.

While I agree that tall buildings are important “geography-shrinking machines”, what we’re really talking about is using land more intensely. We’re talking about urban density. But you don’t necessarily need tall buildings to have high population densities. Consider Barcelona, which is one of the densest cities in Europe, and consider this comparison between Paris (few tall buildings) and Vancouver (more tall buildings).

So is the argument simply that density is good for cities, and that tall buildings are one way to achieve that? Or is it that, now that cities like Paris are built out (albeit at very high densities), the only option for growth is to go up? I guess I’ll have to read his book.

May 13, 2024
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Waymo’s robotaxis now make 50,000 paid trips every week

A few days ago, Waymo announced (on X) that its robotaxis are now doing more than 50,000 paid trips every week across Phoenix, San Francisco, and Los Angeles.

This means that the company is getting an average of 300 bookings every hour or five bookings every minute. And if you add in Austin, where it’s currently offering a limited number of rides, the company has completed a total of over one million rider-only trips.

In the announcement, Waymo also went on to say that “fully autonomous ride-hailing is a reality and a preferred mobility option for people navigating their cities every day.” All of this is something.

But perhaps the most important takeaway, right now, is that the company continues to claim — by way of a study from Swiss Re — that its robotaxis are already significantly safer than human-driven vehicles.

I don’t personally know if this is true, but it’s not hard to believe. I mean, human drivers suck. And assuming it is true, we should all want more robotaxis on the road, because statistically, we would be significantly safer.

The problem, though, is that autonomous vehicles suffer from a perception bias. We’re all looking for them to fail. If a robotaxi gets into an accident, it’s news. But if a human driver gets into an accident, it’s standard operating procedure. It’ll be interesting to see how and when this flips.

May 12, 2024
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Cost-plus price floor

Oftentimes, it feels like there is a perception that developers price new housing with the fattest of margins. Meaning, if only developers were less greedy, housing could be more affordable. But as we have spoken about many times before, real estate development is a competitive industry; therefore, projects happen on the margin.

Ordinarily, the prices you see are the result of a cost-plus pricing strategy. Developers figure out what it will cost to build and develop, they add on a margin that they think their investors will accept, and then they determine what sticker prices they need to make the project financially feasible.

I’ve been writing about this approach for many years, but today it’s even more obvious. According to Urbanation’s Q1-2024 condominium report, new unsold condominium inventory in the GTA is currently sitting at approximately 23,815 units. This is up 30% YoY and is equal to about 23 months of supply. Two years ago in Q1-2022, this number had reached an 18-quarter low of 8,726 units.

Developers are highly motivated to sell and move their projects forward. Time is a killer, especially today. So the logical explanation for this rising inventory is simply that they can’t sell it. Their cost-plus pricing doesn’t overlap with what most buyers in the market are willing to pay. Like I said, development happens on the margin.

In theory, there is always a price where buyers would be willing to transact. If I listed a beautiful condominium for $100k today, many people would want to buy it. Supply would quickly run out. The problem is that no developer can build for this. There is always a very real price floor and, right now, that floor doesn’t seem to be low enough for many buyers.

May 11, 2024
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Housing affordability in Canada

By some measures, housing affordability is, in aggregate, the worst it has been in Canada going back to the 1980s. Below is a chart from RBC showing homeownership costs as a percentage of median household income.

The previous spike came around the early 90s, but following that, we saw 3 decades of relative affordability. In fact, for a large portion of this timeline, condo apartments look to be hovering around 1/3 of median household income. This is a common rule of thumb for measuring affordability.

Now obviously things changed pretty dramatically during the pandemic. But that time has ended and a reset is underway. New housing supply has slowed dramatically. Developers are sitting on record levels of inventory. And sellers of all shapes and sizes are clinging, as best they can, to yesterday’s prices.

With so much uncertainty, it’s challenging, if not impossible, to know exactly how all of this will play out in the coming years. But I suspect that, as time goes on, the above chart is going to start to mirror what we saw in the early and mid-90’s. In other words, affordability is going to improve.

May 10, 2024
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Facing west

I lived in my last condo for over 10 years. And since it faced east, I never got to see any sunsets while at home. Now that our new place faces south and west, I am amazed at how often there’s a beautiful sunset here in Toronto.

This was last night’s from my home office:

Naturally, this picture doesn’t come close to doing it justice.

May 9, 2024
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Toronto’s Major Streets Study approved at Planning and Housing Committee

Back in March, we spoke about how Toronto wants to allow small-scale apartments on all of its major streets. Well today, this study — known as the Major Streets Study — passed at Planning and Housing Committee.

It still has to pass at Council. And the Committee did ask for city staff to look at certain amendments, such as reducing setbacks and increasing the maximum dwelling count from 30 to 60 suites. However, all signs point to this new policy being fully approved sometime in the coming months.

There’s still work to be done. For example, I don’t know why there even needs to be a maximum number of homes. Maybe one of you can explain it to me. We are already dictating the overall built form, so why not let people just build as many homes as possible.

It feels like we’re saying: “We desperately want more homes on our major streets, but you know, we don’t want the economies of scale to be too great. We’d rather see more, smaller projects. This way each home is more expensive to build!”

In any event, this is still meaningful progress. It is what so many urbanists have been clamoring for over the years; more homes in our low-rise neighborhoods. So I think it’s important that we recognize today as such. Nice work.