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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Author: Brandon Donnelly

  • Using tweets to measure social connectedness in cities

    This recent study used geotagged tweets to measure social connectedness within American cities. There are two measures: (1) concentrated mobility and (2) equitable mobility. The first measures the extent to which social connections (geotagged tweets) are concentrated in a set of places within the city. And the second looks at the degree in which people move between neighborhoods in roughly similar proportions. These measures are the y-axis and the x-axis, respectively, in this graph:

    So how do you read this chart?

    Well if you look at New York, you’ll see that it is relatively high in concentrated mobility, but the lowest in terms of equitable mobility. This means that social connections are highly concentrated and that there’s low connectedness to other neighborhoods within the city. Miami, on the other hand, is the opposite. It’s also an outlier. Few hubs. But its social connections appear to cross neighborhoods and spread across the city.

    Perhaps not surprisingly, the study found that the size of a city seems to have the biggest impact on social connectedness. Which makes sense — it becomes harder to get around and so people start to localize. I am reminded of this whenever my friends in Los Angeles tell me they never go to the beach because it’s simply too difficult and too time consuming to get across the city.

    This also became clear to me after I started playing around with the Moves App back in 2015. The app no longer exists, but it was an activity tracker that allowed you to map where you, well, moved. And the more time you spent in one place, the more concentrated the activity would become. They depicted this through larger and larger circles. Example maps, here. My maps revealed that I need to branch out into different neighborhoods more often.

    To download a full copy of the study, click here.

    Chart: CityLab

  • Apartment rents in Ottawa vs. Gatineau

    Ottawa, Ontario and Gatineau, Quebec are border cities. They exist on either sides of the Ottawa River. And yet, 2017 data from the Canada Mortgage and Housing Corporation revealed that there’s about a $450 per month rent spread on the average two-bedroom apartment in these two cities. The average rent on the Ontario side was $1,232 per month; whereas the average rent on the Quebec side was $782 per month.

    Now, Ottawa is bigger. The city has a population of about 934,243 (2016); whereas Gatineau is about 276,245 (2016). Ottawa is also the nation’s capital, and so the center of gravity is firmly toward the former. But the border is also very porous. Google Maps is telling me that you can walk from downtown Ottawa to downtown Hull (Gatineau) in 30 minutes. So why then is there such a rent disparity?

    Is there a language barrier? Is it because income taxes are higher in Quebec? Or is it something else? Interesting.

    Photo by Marc-Olivier Jodoin on Unsplash

  • The 50 coolest neighborhoods in the world

    There’s a stretch of restaurants and bars on the south side of King Street, west of John Street, here in Toronto, that I generally try and avoid. I won’t name names, but if you’re from Toronto, you know what I’m talking about. With all due respect to the business owners, I think of this stretch as tourist row. All cities have them. Usually the identifying marker is a human on the street with a menu trying to entice you to come inside and eat. And there’s nothing wrong with that. I can appreciate good street hustle.

    But whenever I’m traveling and trying to find a place to eat, I’ll often think to myself, “Oh man, is this the (insert city name here) equivalent of tourist row? I see people on the street with menus in their hands. Could be.” This is one of the reasons why I like Time Out’s recent “definitive list of the planet’s cultural and culinary hotspots.” They surveyed over 27,000 city dwellers in order to figure out where locals actually want to hang out. The result is the 50 coolest neighborhoods in the world.

    I am somewhat embarrassed to say that, I think, I’ve only been to 6 of them. I have work to do. But Toronto does make the list — once — and it is none other than the Junction. Their recommendations, here. However, one thing they did miss was the Union Pearson Express. That is the way to get to the Junction from Union Station and it is, clearly, still under the radar for most. The number one spot on their list goes to Arroios in Lisbon, which is actually beside where I stayed when I was there this summer. Damn that city is cool.

    For the full list of neighborhoods, click here.

    Full disclosure: I am not a neutral observer. We are developing in the Junction. And I am moving to the Junction (and trying to pretend to be cool).

  • Fees on homes

    A colleague of mine sent me this Bloomberg article today and said, “Here’s an article about things you already know.” The article cites a recent report by Altus Group that compared government-related fees on new housing across Canada and the U.S. What they discovered will not surprise any of you who are in the industry: Toronto has some of the highest government-imposed charges on new homes.

    For new condo apartments, the report found that government charges can add up to as much as C$124,582 per unit. That’s about 50% higher than the average unit in the U.S. and about 30% higher than the average unit in Canada (see above chart for the list of cities). While all of us in the industry can appreciate this, I don’t think most homeowners and tenants understand this. Hopefully they’re reading this post.

    Chart: Bloomberg

  • Raising kids in the city

    This week, Matthew Yglesias of Vox makes the case for raising kids in the city. Spoiler: Driving sucks. Cities have lots to do. And parks can be better than lawns. However, he also talks about why this proposition is becoming increasingly difficult for many families. Here are a couple of excerpts:

    Now the father of a 4-year-old son, I live in Washington, DC, a city that is, mercifully, marginally more affordable than New York, and I wouldn’t want to raise a family any place other than the city.

    But unfortunately, families are disappearing from American cities even as city living in general has become fashionable again for those who can afford it.

    Children cost money. And they take up space. And urban space has become much more expensive — repelling growing families. This suits the proclivities of smug suburbanites just fine, but as someone who grew up in a big city in the 1980s and 1990s when city living was both less fashionable and more affordable, it seems like a tragedy to me.

    I didn’t grow up in the city. Though, I spent time in apartments and other higher density housing. And I don’t have kids. But I find this topic interesting. It’s also an important one. I don’t believe that the childless city is a good thing.

    For the full article, click here.

  • Suburban household debt in Canada

    Rachelle Younglai and Chen Wang’s recent piece in the Globe and Mail on suburban household debt (in Canada) has a number of interesting stats. Here are some of them:

    • Looking at debt service ratios across the country, the most financially stressed neighborhoods in Canada are almost exclusively in the suburbs. (Map of the Greater Toronto Area shown at the top of this post. Data from Environics Analytics.)
    • 34 of the top 100 most financially strained neighborhoods in Canada are located in Brampton, Ontario.
    • Brampton has grown at 2x the rate of Toronto over the last decade.
    • 43% of Brampton’s housing was built between 2001 and 2016.
    • 80% of homeowners in Brampton have a mortgage compared to 63% across the Toronto region as a whole.
    • 80% of Brampton’s property tax revenue comes from residential property (not surprising). In comparison, 47% of Toronto’s property tax revenue comes from commercial properties.
    • About 2/3 of Brampton’s work force leaves the city for their job. This makes sense given the above point.

    The other thing the article talks about is the increase in the average household size in many suburban communities as a result of people renting out parts of their house.

    One Brampton gentleman is quoted as saying that he rents his basement out to 3 or 4 students and his upstairs bedrooms to two truckers. This translates into typically 6 vehicles parked in his driveway.

    Assuming this is the trend, I wonder how much of this additional income is being reported to CRA. Because if it’s not, then it could be throwing of these debt ratios and making the financial situation look more dire than it is.

    In any event, I think this speaks to, among other things, the role that many suburban communities now serve for new immigrants coming to Canada. They are doing what they can to try and get ahead.

    It’s also worth noting that if you look at the above map of the Greater Toronto Area, the lowest “debt spots” are in fact where homes tend to be the most expensive — the core.

    Map: The Globe and Mail

  • Solving the rubik’s cube

    Developing a building can often feel like you’re trying to solve a rubik’s cube. Among other things, you have to manage a myriad of different stakeholders, all of which — naturally — operate in their own self-interest. There’s the city, community, politicians, various agencies, consultants, tenants, purchasers, lenders, investors, the market at large (of which you really have no control of), and many others. Oftentimes you even have stakeholders whose interests are mutually exclusive. Indeed, the things that they want can sometimes be at odds with each other. Your job is to figure out a solution that satisfies as many of these interests as possible.

    To give you an example, let’s say that you’ve been asked to introduce a stepback into your building in order to break up the elevation. From an urban design standpoint, this may make perfect sense. Hello, datum line. But now your construction costs just went up. You have to transfer your mechanical lines, insulate the roof, introduce new bulkheads, and, for the purposes of this example, let’s say you now need to introduce a structural transfer. This is big cost item that you hadn’t accounted for. And because you just reduced the height of the building to satisfy another stakeholder, you don’t have the excess clear height to accommodate the additional depth required by this new structural element. There is, of course, always a solution. But usually something will need to give.

    At the same time, this raises some interesting philosophical questions. What’s more important in this example? The urban design move or keeping construction costs low so that the building can be delivered more affordably? The cynics will argue that this is a moot point because developers will always profit maximize. But I would encourage you to check out some of my past posts, such as “Cost-plus pricing” and “The impact of inclusionary zoning on development feasibility.” This problem solving dynamic is one of the things that makes development so challenging. But it is also one of the things that makes it incredibly rewarding.

    Photo by Ivan Bandura on Unsplash

  • Fall architecture preview

    The New York Times’ fall architecture preview is centered around a pretty important and relevant theme, namely the relationship between the built environment and the natural one.

    Some of the projects that they profile include Dock 72 at the Brooklyn Navy Yard, which was raised up in order to lift it out of a floodplain; the “solar carve” tower by Studio Gang, which was designed to prevent shadows from casting along the adjacent High Line (pictured above); and the recently completed Casablanca Finance Tower by Morphosis.

    This last one, pictured below, uses thick aluminum beams to shade the building. That’s a pretty important feature in North Africa.

    Photos by Nic Lehoux and Hakim Wiseman Joundy (via the New York Times)

  • Patch Homes announces $5mm Series A round to grow fractional home equity platform

    There are a number of home equity startups in the marketplace today.

    A few years ago I wrote about an alternative product to HELOCs or home equity loans, called Point. And earlier this year, I wrote about a startup, called Landed, that is helping “essential professionals,” such as teachers, with their down payments. They’ll contribute up to 10% of the value of a home in exchange for a share in any future gains, or losses.

    Today, another startup in the space — Patch Homes — announced a $5mm Series A round. From what I can tell, it appears to be similar to Point in that it involves the fractional sale of home equity. Though, to be clear, the model is distinct from the fractional homeownership that is popular in many high demand vacation destinations. Here’s a bit more on how the product works (source):

    The Patch model enables homeowners to “tap into” their home equity by selling 20–40% to Patch’s affiliate, Patch Capital, which shares in both the upside and downside. The homeowner remains in control of her or his home for the life of the relationship and exits via a sale or refinances in 7–10 years.

    While this product is not for all homeowners, it provides a new and important financing option. The Fed estimates that home equity ownership in the US is $15 Trillion. It makes no sense that the only financing options are additional debt or a complete sale of the property. Patch gives homeowners the option to de-lever their personal balance sheet or otherwise raise cash. Clients have used Patch proceeds for numerous reasons, the most popular of which are to pay off debt, increase liquid savings and finance home improvements.

    I am not surprised to see this gaining momentum. The biggest benefit is that it gives you partial liquidity (i.e. cash up to $250,000), without having to sell your property or take on additional debt service payments. It’s equity, not debt. Fred Wilson, an investor in the company, calls it fractionalizing home equity.

  • New Monocle City Series to launch in Chengdu

    Today, Monocle announced a new “City Series,” which will take the form of a focused half-day summit. The objective is to explore the urban issues facing mayors, developers, investors, and citizens. The first summit will take place this November 4 (2019) in Chengdu — the capital of the Sichuan province in China.

    For those of you who aren’t familiar with Chengdu, it’s a modest Chinese city with over 14 million people in the administrative area and over 10 million people in the urban boundary (2014 figures). It is the 5th most populous agglomeration in China.

    I can’t vouch for the quality of this new series, since this will be the first one, but Monocle has been running a longer, multi-day, quality of life conference for a few years now. Mostly, I am intrigued by the selection of Chengdu as the inaugural city for this new series. I take it as evidence that interesting things are happening there.

    Image: Monocle