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.
When the financial crisis hit in 2008, I was living in the United States. At that time I remember developers and other people saying that it was going to take at least 20 years before the country would build another commercial office building. It felt that bad.
Job opportunities had certainly dried up — especially for Canadians like me who were focused on real estate development. But of course, things eventually got better. New office buildings got built well inside of two decades, and the US went on to see its longest ever economic expansion.
This past Monday we saw the financial markets suffer one of, if not the, biggest selloffs since the financial crisis. If you haven’t yet checked your portfolio and/or retirement savings, I suggest you hold off until the Fed “prints” some more money. The time to sell is not right now. (Not actual financial advice.)
Now is, of course, the time to remain rational and disciplined, and focus on the relationship between price and value. Fred Wilson’s recent blog post on “market meltdowns” is a good reminder of this. So here are a couple of excerpts that I really liked:
I’ve seen this movie before. I had just started working in the venture capital business in 1987 when the stock market crashed 23% on “black monday.” There was the Internet stock meltdown in 2000 when the internet sector went down something like 80% over that bear market. And then there was the financial crisis in 2008.
Capital markets sometimes put out the for sale sign and if you are patient and wait for bargains to emerge, they will do that.
But I do know that good companies with resilient businesses and strong balance sheets will survive these occasional crises and that they can be bought with confidence at the right time.
In the fall of 2016, Lucas Manuel (Partner at Slate) and I traveled to Chicago in order to meet with Jeanne Gang and the rest of the studio. Our objective was simple: We were looking to find an architecture firm that we could partner with and do something very special with at Yonge + St. Clair. We wanted to start from first principles and rethink what a tall building could be in Toronto.
During our meeting and studio tour, Jeanne and her team asked a number of poignant questions about our vision for the area, our goals for the project, and our commitment to sustainable design. So much so that when Lucas and I left the meeting we both looked at each other and said: “That wasn’t us interviewing them. That was them interviewing us.”
It was obvious that they were committed to high quality architecture, environmental sustainability, and overall community building. And it was equally obvious that if we, Slate, weren’t committed to the same, then we weren’t the client and partner for them.
It has turned out to be a great partnership. Over the last three plus years, the team has remained committed to living up to the promises we made to each other in that first meeting in Chicago. And on many occasions, that has meant taking the more difficult path and fighting for what we believe is great design and great city building.
Since 2016, we have held and/or participated in multiple community visioning sessions with Councillor Josh Matlow and key stakeholders from the community. Two pre-application meetings with City Planning. Two big and public community meetings. A design charrette for the Yonge + St. Clair area. And five meetings with a local “community working group” that was formed following the bigger community meetings. Our application was also before the City of Toronto’s Design Review Panel (DRP) at the end of 2018, where it was unanimously supported (though with some constructive feedback).
It has been a long road working to create Studio Gang’s first project in Canada. One that I like to think started in a jazz bar in downtown Chicago (it actually started much earlier). And so I am thrilled to announce that City Planning, City of Toronto, are now recommending approval of One Delisle! Their report is public and the project will be considered by Toronto and East York Community Council this Thursday, March 12, 2020.
If you would like to speak at or submit a comment to Community Council — ideally in support of the project — please email the City Clerk at teycc@toronto.ca. Myself and the team hope to see many of you at City Hall this Thursday morning at 10:00AM.
For those of you who aren’t familiar with the project, here is a summary from City Planning:
This application proposes to amend the Official Plan and Zoning By-law to permit a 44-storey (143 metres plus a 7-metre mechanical penthouse) mixed use building with 293 dwelling units and 159 parking spaces within a 4-level below ground garage at 1-11 Delisle Avenue and 1496-1510 Yonge Street. A 2,506 square metre public park will be secured off-site on the rear portions of 30 and 40 St. Clair Avenue West. The Official Plan Amendment also redesignates a portion of the subject site from Apartment Neighbourhoods to Mixed Use Areas.
The proposed development is consistent with the Provincial Policy Statement (2014), conforms with the Growth Plan for the Greater Golden Horseshoe (2019), conforms with the applicable policies of the Official Plan and the Yonge-St. Clair Secondary Plan, and is consistent with the Yonge-St. Clair Planning Framework and Tall Building Guidelines. The proposal also meets a number of significant public realm and built form objectives, some of which are outlined in the Yonge-St. Clair Planning Framework, including: securing a 2,506 square metre public park in close proximity to the Yonge-St. Clair intersection; wider sidewalks along both Yonge Street and Delisle Avenue; enhanced street landscaping; restoration and relocation of an existing Art Deco façade; a pedestrian scale base building in keeping with the main street character of Yonge Street; a north/south midblock connection between St. Clair Avenue West and Delisle Avenue; high quality architecture; and consolidated access and servicing for the block.
This report reviews and recommends approval of the application to amend the Official Plan and Zoning By-law.
Images: Design by Studio Gang. Renderings by Norm Li.
Despite COVID-19, I am still going to work and going to the gym. (Zoom and Peleton are up 23% and 6%, respectively, from February 21 to March 5, presumably because there’s a belief we’re all going to start doing less of these two things.)
On my walk home from the gym today I noticed that some new wayfinding had just been installed at the corner of Church and Wellington. I’m not sure how long it has been up, but I am fairly certain it is new. Here is a photo.
The wayfinding is part of the City of Toronto’s TO360 project, which was launched in 2011 and includes everything from transit shelter maps to finger posts like the one you see here. (Don’t worry, I am confident that detailed shadow studies were conducted before this thing was erected.)
The “Astral” street furniture that we still have kicking around this city can’t be removed fast enough and so wayfinding like this is a significant improvement. I like the designs.
But I also think the project is important from a placemaking standpoint. Signage like this helps to brand the city and the places with in it. It also signals a certain degree of internationalism, because wayfinding is most useful for visitors.
This past week, San Francisco’s Proposition E was approved by 55% of voters. The measure works by limiting new office development if (or when) the city falls short of its affordable housing target for the year.
If the city only builds 25% of its housing target (currently set at 2,042 affordable units per year), then only 25% of its annual allocation of office space can be built the following year. (I just learned that large scale office development in San Francisco has been limited to 875,000 sf per year as a result of a Proposition dating back to 1986.)
So at the moment, San Francisco looks destined to start building a lot less office space. And considering that new office space actually helps to fund affordable housing, I am struggling to understand why the goal seems to be to constrain job growth.
California State Senator Scott Wiener called Prop E a dumpster fire:
Prop E’s passage is perhaps the worst institutional political failure I’ve seen in my 23 years in SF.
Prop E is a dumpster fire.
It‘ll reduce $ for affordable housing/transit, cost SF’s general fund billions, push out start-ups/nonprofits & fuel office sprawl (w increased VMT). https://t.co/97p2RZNAPO
— Senator Scott Wiener (@Scott_Wiener) March 4, 2020
Call me old fashioned, but I tend to think that if the goal is to build more affordable housing, you should do things that, you know, encourage the actual construction of affordable housing.
This is a city metric I haven’t seen before. City Observatory recently looked at the number of police officers (public) and security guards (private) per capita across American cities. They also ask a bunch of interesting questions. Why do some cities have far fewer police officers? Is high security an indicator for “anti-social capital?” (Social norms aren’t encouraging people to behave.) And do some cities simply have more cops because it is perceived to be necessary?
Here is what they found:
The average is about 3.3 police officers per 1,000. And in each case, city is defined as the metro area. The study relies on census data and, if we’re being precise, the data represents where people live as opposed to where they work. So some cities could be reporting a lower number simply because police officers tend to live outside of the metro area — perhaps because of housing costs. Either way, it’s interesting to consider why some cities spend a lot more on security than others and why Miami has so many security guards.
This recent article about the kind of homes that “wealthy millennials” are buying is a useful reminder of just how expensive homes are in San Francisco. But it’s also interesting in that it speaks to the types of homes that people with options are deciding to buy. In other words: If you had all the money in the world, what would be your ideal home? (According to the article, there are about 618,000 people in the US between the ages of 24 and 38 who have a net worth of at least $1 million.)
Traditionally, “luxury” has meant lots of square footage and a big lot. But as we know, that view is changing for some/many people. We are placing a greater emphasis on being closer to the city and on living in more walkable communities. The article provides a number of examples where historically desirable areas have lost ground to areas that are now popular with the under 40 set. And in some cases, there has been a complete reversal; areas have gone from being more expensive to now less expensive (on a per square foot basis).
It would seem that being able to work from anywhere hasn’t made us forget the city.
Yvonne Farrell and Shelley McNamara, co-founders of Grafton Architects, have just been named the 2020 laureates of the prestigious Pritzker Architecture Prize. They are the first recipients from Ireland. If you’d like to read the full press release, you can do that here. But here is a copy of the jury’s citation.
Yvonne Farrell and Shelley McNamara have practiced architecture together for forty years in a way that clearly reflects the objectives of the Pritzker Prize: to recognize the art of architecture and consistent service to humanity as evidenced through a body of built work.
Co-founding their professional practice, called Grafton Architects, in Dublin, Ireland in 1978, they have consistently and unhesitatingly pursued the highest quality of architecture for the specific location in which it was to be built, the functions it would house and especially for the people who would inhabit and use their buildings and spaces.
They have an oeuvre that includes numerous educational buildings, housing and cultural and civic institutions. Pioneers in a field that has traditionally been and still is a male-dominated profession, they are also beacons to others as they forge their exemplary professional path.
Many of their buildings are located in their home country of Ireland, but through competitions, they have won major commissions for other places around the world, such as Italy, France and Peru . With a profound understanding of place gained through their research, keen powers of observation, open and ever curious explorations and deep respect for culture and context, Farrell and McNamara are able to make their buildings respond to a setting and city most appropriately, while still being fresh and modern.
This deep understanding of “spirit of place” means that their works enhance and improve the local community. Their buildings are “good neighbors” that seek to make a contribution beyond the boundaries of the building and to make a city work better. Their North King Street Housing in Dublin (2000) is one example of this: it creates an inner courtyard and a welcome respite from the adjacent busy streets.
Their approach to architecture is always honest, revealing an understanding of the processes of design and construction from large scale structures to the smallest details . It is often in these details, especially in buildings with modest budgets, where a big impact can be felt . For example, the Urban Institute of Ireland (Dublin, 2002) employs what the architects call a “crafted skin” to create a visually interesting building through changes in materials responding to openings, folds, needs for shade and other concerns.
At the same time, it employs common sense, good-practice environmental control methodologies for an efficient, sustainable building . On a particularly sensitive site in Dublin, the masterful Offices for the Department of Finance (2009) attests to their knowledge and care in the selection of materials and construction techniques with a carefully handcrafted bronze railing and gate and sanded limestone on the facades.
The architects are skilled and successful working at many scales—from large institutional buildings to a house of only a little more than 100 square meters . Without grand or frivolous gestures, they have managed to create buildings that are monumental institutional presences when appropriate, but even so they are zoned and detailed in such a way as to produce more intimate spaces that create community within . In their large buildings such as the University Campus UTEC (2015) in Lima, Peru or the School of Economics Building (2008) at Universita Luigi Bocconi, they have achieved a human scale through the composition of spaces and volumes of different sizes . The dialogues they create between buildings and surroundings demonstrate a new appreciation of both their works and place.
A constant in their approach, the architects have an understanding of how to design complex sections of buildings in such a way that views connect deep interior spaces with the larger exterior realm and allow natural light to penetrate and animate spaces deep inside a building . Often light streams from skylights or upper story windows throughout the interiors of their buildings, providing warmth and visual interest, helping the inhabitants easily orient themselves in the spaces, and providing the ever necessary connection to the exterior.
For their integrity in their approach to both their buildings, as well as the way they conduct their practice, their belief in collaboration, their generosity towards their colleagues, especially as evidenced in such events as the 2018 Venice Biennale, their unceasing commitment to excellence in architecture, their responsible attitude toward the environment, their ability to be cosmopolitan while embracing the uniqueness of each place in which they work, for all these reasons and more, Yvonne Farrell and Shelley McNamara are awarded the 2020 Pritzker Architecture Prize.
Photo: University Campus UTEC Lima, photo courtesy of Iwan Baan
This recent paper by Miyuki Hino (University of North Carolina) and Marshall Burke (Stanford) makes the case that US homes situated within floodplains are currently overvalued by a total of $34 billion. And that’s because the associated risks are not being properly accounted for in the value of these homes.
The problem, it would seem, comes down to information. Because the discount for flood risk was found to be higher (1) for commercial buyers (presumably because they’re more sophisticated and/or have better access to information) and (2) in states where sellers must disclose flood risk (Louisiana is probably the most stringent about this).
This feels a bit like one of those realtor commercials that tries to scare you into using one. But it does appear to demonstrate just how opaque the market can be and how information asymmetries potentially distort asset prices. Perhaps most importantly, I wonder when climate risk will get fully valued.
The New Yorker recently published a “daily shout” on Instagram called, How You Know You’ve Made It, by City. It is essentially a series on city stereotypes, and it’s pretty funny. Sorry Cleveland. If you can’t see the embed below, click here.
The City of Toronto is currently studying ways to increase housing options/supply and planning permissions in areas of the city that are designated as Neighbourhoods in the Official Plan.
These are areas that are sometimes referred to as the “Yellowbelt”, because they are seeing very little intensification and, in a number of cases, actually losing population. (They’re also colored yellow in Toronto’s land use map.)
Ultimately, the goal is to encourage more “missing middle” type housing forms; housing that is denser than single-family homes but smaller in scale than say mid-rise housing like Junction House.
Here are a couple of interesting charts from the City. Based on Toronto’s Official Plan, “Neighbourhoods” make up 35.4% of the city’s land area.
In Toronto’s Zoning By-law, the “Residential” category makes up 47.1% of the city’s land area.
Digging deeper, 31.3% of Toronto’s total area is zoned for only detached houses — which would mean no missing middle type housing. But 15.8% of the city’s total area is already zoned to permit other types of low-rise residential buildings, such as duplexes and triplexes.
So why isn’t more of that happening?
As we’ve talked about before on the blog, the problem is that it is exceedingly difficult to make the math work on projects of this scale, which is why most developers don’t want to do them. The web of bureaucracy that you need to navigate in order to build anything in the city is also imposing for non-developers (and developers really).
But to be a developer, I think you need to be an optimist. So I am going to remain hopeful that this study — and the pilot they want to do in Ward 19 — will result in a streamlined solution for housing of this scale.
