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

  • Hong Kong vs. Singapore

    There’s now evidence to suggest that the political crisis in Hong Kong may be having an impact on capital flows. Bloomberg, as well as others, reported today that wealth managers in Asia have been receiving a heightened number of requests to transfer assets out of the country — to places like Singapore — and to setup new overseas bank accounts so that they can be ready to transfer, should the situation gets worse.

    In fact, the Monetary Authority of Singapore (MAS) even asked the country’s financial institutions not to prey on the wealthy in Hong Kong during this period of uncertainty. They want to avoid the perception that Singapore is trying to capitalize on the situation. Of course, it remains to be seen how much all of this is here-say and how much of it will actually translate into a meaningful transfer of wealth.

    Hong Kong has a significantly larger private wealth base, with about 853 individuals worth more than $100 million. This is more than double the number in Singapore (figure from Credit Suisse). But the current demonstrations have people questioning what will happen to Hong Kong in 2047 when the constitutional article committing Hong Kong to a capitalist way of life is set to expire.

    The flows of capital can be fickle.

    Photo by Florian Wehde on Unsplash

  • The densest urban cells in America

    Garrett Dash Nelson recently published a study looking at urban density on a cell-by-cell basis for a number of US cities. Each “cell” is a 30 arc-second grid cell, but you can think of them as being approximately one square kilometer. The goal of the project was to better define urban density and do it in a more granular way. City averages don’t tell you a whole lot about how neighborhoods vary, and they can be skewed by the denominator you use. i.e. Where are you drawing the urban boundary?

    You can play around with his interactive study, here. Each city can be explored according to its 200 most dense cells. One interesting takeaway — though it is probably not all that surprising to this audience — is that New York City is really a unique place when it comes to American cities. If you look at the above chart (sourced from CityLab), you’ll see that most other US cities don’t come close to it in terms of urban density. New York’s 200th densest cell is still denser than the most dense cells of Boston, the Twin Cities, and of Dallas.

    The y-axis is the total population in each grid cell.

  • Tiny, prefabricated, and expensive

    This is not a new video (click here if you can’t see it embedded above). It’s from 2015. But I still very much like the simplicity of the Vipp Shelter. It’s only 55 square meters.

    One problem is that it cost USD 585,000 at the time it was prefabricated. It goes to show you that prefabrication and small don’t necessarily equate to affordability. For this reason, Lloyd Alter called it a “problematic prefab” back in 2015.

    Of course, there are ways to make a home like this much more cost effective. I’ve been looking, on and off, for over a year for a piece of land that would be suitable for a project like this. I’ll let you all know if I find something.

  • New York state law restricts condo conversions

    The State of New York just enacted a new law (on June 14, 2019) requiring that 51% of existing tenants agree to buy their apartments before a building can be converted into a condominium or a cooperative. There was previously no requirement for anyone to buy in order for a conversion to take place. Tenants who chose not to buy, could simply remain in the building as a renter.

    Supposedly, the real estate industry believes this new requirement will be a largely impossible threshold to meet, meaning that condo/co-op conversions could now be dead in NYC. There’s also an argument that conversions have historically helped many middle class New Yorkers buy a home since they sometimes (usually?) had the chance to buy their apartment below market at the time of a conversion.

    I’m not familiar enough with this space to be able to opine on the merits of these arguments, so I won’t. Perhaps some of you will in the comment section below. Instead, I will leave you all with a chart showing the median condo sale price in Manhattan over the last ~30 years (taken from the same WSJ article). I like seeing long(er) term charts. Maybe you do too.

  • The Japanese are renting cars but not driving them

    Lately it has been in the news that a growing number of people in Tokyo are using car-sharing services for reasons other than to drive places. It started when companies began noticing that “several percent of their rented vehicles” were not being driven at all. What they ended up discovering, largely through customer surveys, is that car-sharing services have become an affordable option for people looking to nap, work, eat, store things, charge their phone, practice rapping, and probably a bunch of other things.

    This immediately struck me as being quintessentially Japanese, partially because one of my experiences of Tokyo is that Tokyoites are often cool to sleep all throughout the city, including at the bar and on my shoulder on the metro. But I also think this finding tells you something about Tokyo’s urban fabric and, in particular, how much of a precious commodity that space is within the capital. This guy once rented a car because he couldn’t find a place to sit down and eat his boxed lunch.

    This may also be a case of mispriced private space. Cities should, of course, have well-designed public spaces that accommodate people wanting to eat their boxed lunches. But for those looking for a little quiet time, a few hundred yen for 30 minutes has proven to be a competitive, and in some cases a more affordable, offering compared to, say, internet cafes. From the sounds of it, none of the car share companies ever anticipated this use case. Pricing is interesting.

    Photo by Louie Martinez on Unsplash

  • The world’s top oil producers

    Using data from MarineTraffic (which is definitely worth a click through), the New York Times has created this terrific animation showing the flow of oil tankers from the Persian Gulf to the rest of the world from May 15 to June 15, 2019.

    Here’s a screenshot:

    About 20% of the world’s supply of oil flows through the Strait of Hormuz, a tiny passage located between Iran (north) and the UAE (south). See above.

    The article also has a number of other charts that speak to changing supply and demand patterns. Note the US, China, and Iran.

    Here are the top oil producers (total petroleum liquids) and the top crude oil exporters in 2018 (both are measured in millions of barrels a day):

    And here are the top oil consumers ranked by 2016 data (total consumption of petroleum and other liquids):

    Images/Charts: New York Times

  • Amtrak lines with the biggest operating losses

    I was reading this morning about Richard Anderson’s efforts to stem Amtrak’s operating losses, and the controversies surrounding those moves. Richard Anderson became President and CEO of Amtrak in 2017. Before that he was the CEO of Delta Air Lines.

    One of the things that Anderson is trying to do to improve profitability is shrink or eliminate some of the company’s long-distance train routes and instead focus on the more frequent (and profitable) short haul routes. Here is a map from the WSJ that I thought was really interesting:

    The only profitable corridor in the network (black line above) is the one running from Boston down to Washington D.C. The long-distance routes running west from Chicago (1, 2 and 3 above) are the lines with the biggest operating losses (thick red lines above).

    All of this makes sense. The northeast corridor works because it has the population density and because the trips are short enough that rail is an appropriate substitute for air travel. The northeast is one giant megalopolis.

    The controversy is that, despite being unprofitable, there’s a segment of the market that still uses and likes many of these long-distance passenger routes. So politically, it’s a challenge to eliminate them. But there are also pressures from Congress to have Amtrak cover its operating costs.

    We should also not forget that Amtrak was formed in 1971 precisely because all of the private companies that had been previously operating these lines were bleeding money. Highways and airlines had taken the passengers. And so this was a way of preserving passenger rail in the US.

    I am curious what all of you think about this. To what extent should these unprofitable lines be propped up by the government? Let me know in the comment section below.

  • Comparing ICE vehicle and electric vehicle travel times

    While we were doing our West Palm Beach to Toronto road trip last weekend, I started wondering how much longer the trip would be taking had we been driving a Tesla. The drive, according to Google Maps, is normally about 20 hours and 46 minutes. It’s a long one. About 2,288 km. The mountains in Virginia are nice, though.

    The route I threw in is West Palm Beach to Junction House (2720 Dundas St W, Toronto):

    According to Tesla, this same route using a Standard Range (400km) Model X SUV is now estimated to take 34 hours.

    The additional travel time is a result of charging time (anywhere from 20 – 70min per charge depending on the device) and the fact that you need to go where the chargers are. In this scenario, you end up driving an additional 155 km. However, you will end up saving money on gas.

    This reminds me of something that Bill Gates argued in the talk I recently posted. Electric vehicles are the future of personal transport, but they’re not great for commercial applications: planes, boats, and so on. The battery capacity simply isn’t there, and it’s unlikely to be there anytime soon. But perhaps the charging times can be brought down. That would help.

    I’m not planning on doing this drive again anytime soon. But if any of you are, you may want to leave the Tesla at home if you’re in a rush. However, using an EV would, of course, be the right thing to do for our planet.

  • Minimalist smart biking device

    I just came across this smart biking device on Kickstarter. It is the next generation of their original SmartHalo, which did very well and is now sold in Apple Stores. The company is based in Montréal.

    Here’s how it works:

    https://www.kickstarter.com/projects/smarthalo/smarthalo-2-make-your-bike-smarter

    I know that a lot of you are cyclists, so I figured some of you might appreciate this. It looks pretty awesome. Delivery of SmartHalo 2 is expected by December 2019.

    Their Kickstarter campaign ended on July 2. The project got funded with about CAD 1.7 million from over 10,000 backers. But you can still pre-order a device, here.

  • Using AI to estimate crowd sizes

    This recent NY Times article about crowd estimates for Hong Kong’s annual pro-democracy protest is a good follow-up to my post about the number of people who, allegedly, showed up to last month’s NBA Championship parade here in Toronto.

    For years, Hong Kong has been seeing divergent estimates for its annual protest. Organizers typically overstate. And the police typically understate. This year, organizers claimed 550,000 people in attendance, whereas the police claimed only 190,000.

    The difference this year is that a local tech company has started using AI software (loaded up onto iPads) to help supplement the standard practice manual counts. This year they concluded — perhaps more definitively — that 265,000 people protested in the streets of Hong Kong.

    Image: NY Times