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 Graham Donnelly

  • The Walk-Up

    Today on the blog, I thought we’d feature a new fourplex being developed here in Toronto at 2343 Gerrard Street East called The Walk-Up. Designed by Studio JCI and presented by Paul Johnston of Unique Urban Homes, this is the first in a series of “missing middle” projects now being developed by Urbinco.

    Housed on your typical single-family lot, The Walk-Up is somewhere between 3-4 stories and has four homes: a garden suite, a ground suite, a center suite, and a sky suite. And each is family-oriented both in terms of design and size. They all have over 1,000 square feet of interior space, have two bedrooms, and have access to outdoor space.

    In other words, it is exactly the kind of housing solution that Toronto needs a lot more of! Thankfully, this form of housing has been permitted (as-of-right) in Toronto since May 2023. Unfortunately, there are still many municipalities and politicians who don’t seem to get it. But that’s okay. This is usually how things go. Toronto leads, and then others follow.

    For more information on The Walk-Up, click here.

  • Windowless bedrooms are the result of specific forces

    Pat Hanson of gh3* is absolutely right with her comment, here, about why we are seeing more windowless bedrooms being built in Toronto:

    In much the same way, some of Toronto’s development policies encourage windowless bedrooms. “I don’t think it’s driven by cost,” says architect Pat Hanson, a founding principal of gh3* and a member of Waterfront Toronto’s Design Review Panel. “It’s driven a lot by building forms. Where you find a lot of these inboard bedrooms is in the mid-rise type.” The requirements to step back mid-rises on an angular plane, she adds, forces the developers to populate their projects with very deep units.

    This condition is being driven by building forms and by overall housing affordability. Here is a post that I wrote on this exact topic back in 2017. The numbers are dated. I cited $857 per square foot as the average price of a downtown Toronto condo. But the forces at work remain the same.

    And they are not entirely unique to apartments and condominiums. One of the reasons why many condominiums are becoming long and skinny — and getting designed with windowless bedrooms — is the same reason that many cities, like Toronto, have long and skinny single-family lots.

    You can certainly find wider lots, but it’ll cost you.

  • The Aluminaire House finds a permanent home in Palm Springs

    In a few days, a new exhibit, called the Aluminaire House™ Exhibit, will open in a parking lot of the Palm Springs Art Museum. It will form a new part of their permanent collection. Now, museum goers won’t be able to go inside of the house due to accessibility limitations, but they’ll be able to look at it from the outside. And this alone is a big deal because this house is a big deal.

    Initially constructed in 1931, the house was designed by A. Lawrence Kocher (then the managing editor of Architectural Record) and Albert Frey. Albert was a Swiss-born architect who had just immigrated to New York from Europe, after having worked for the famous Le Corbusier in Paris. And so he was a practitioner of the International Style and this house was a clear representation of that.

    Erected in only 10 days, Aluminaire House is thought to be the first all-metal house ever constructed in the United States. Well, metal and glass. And at the time, the overarching objective was to build something cheap, modular, and durable. Something that many are still trying to accomplish to this day.

    Not surprisingly, the house was polarizing. Supposedly, architect Philip Johnson picketed in front of it. But this house would go on to become an icon, and it was eventually featured in MoMA’s 1932 exhibition, “The International Style — Architecture Since 1922” — an exhibition that has been largely credited with introducing European-style modernism to the US.

    Albert also ended up moving to Palm Springs later in life, and became known for pioneering something known as “desert modernism.” So it’s only fitting that this house ultimately end up here. Even if all-metal maybe isn’t the best choice of material for a hot desert. If you find yourself in Palm Springs, you should definitely go check it out, or picket in front of it.

    Images: Surface Magazine & Palm Springs Art Museum

  • FYI, new home coming soon

    This is not a post about laneway housing. Okay, it sort of is. But there’s a broader point to discuss. Recently, a local Toronto newspaper ran this article talking about how a bunch of people are upset that their neighbor is building an as-of-right garden suite. Here’s an excerpt:

    “The members of the community know that they can’t stop the building of this ‘garden suite’. However, they want to change the bylaw to ensure that future ‘garden suites’ can’t be built without community consultation and an environmental assessment,” said a news release from a number of residents in the area that was sent to Toronto media outlets including Beach Metro Community News last week.

    This raises some interesting questions.

    For one, what would be the purpose of this community consultation? Is it just a “Hey, I’m going to be building a garden suite” and then homeowners go do it exactly how they want anyway? Or, would it be an extensive community engagement process where homeowners would be expected to gather feedback, submit a report to the city, and consider design changes?

    And, would this apply to all low-rise housing? In other words, would all homeowners need to consultant their neighbors and do an environmental assessment before pulling a building permit? What if someone just wants to build a small extension or a shed? Or, are we only talking about laneway and garden suites?

    I’m not really sure what the exact intentions are here — besides delaying new housing — but I can tell you that it’s a terrible idea.

    Laneway and garden suites should never require community consultation and/or an environmental assessment. I mean, this is the whole point of allowing them as-of-right. It’s so you don’t have to do these things and you can go straight to a building permit. This is way too small of a housing type to burden with obstacles.

    In fact, the same is true of larger housing types. In my opinion, conventional mid-rise buildings should not have to go through a full rezoning and they should not have to consult with the community. We already know what these buildings look like. We know that they make for great homes. And yet they’re our most expensive housing type to build.

    Removing barriers (and reducing project durations) is a sure-fire way to make them cheaper. Especially in a higher interest rate environment.

  • You have to try

    Now that some of the dust has settled around Apple Vision Pro, it is clear that nobody really knows if it is going to work. (Though, it’s too expensive and it’s too heavy are missing the bigger picture.) It sounds like it delivered what it said it was going to deliver as a product, and the potential is there for a “spatial computing” future. But who knows for sure. Here’s an excerpt from an essay that Benedict Evans recently published called, “A month of the Vision Pro“:

    Second, taking one step further back again, even if my doubts are all wrong, we won’t know any of this for years, and right now this is all still in the experimental category. Apple sells more watches in a typical quarter than Meta has active Quest users. Even the iPhone took years to start selling. It’s possible than in five years this will have started to work, and it’s possible than in five years we’ll have concluded that this [AR/Apple Vision Pro] is a niche, and we’ll have to wait for glasses, contact lenses or neural implants.

    But ultimately, this is okay. You have to try, because:

    Thank you to Lucas Manuel for sending me the above quote.

  • Laneway as front door

    Recently, I wrote about 4 predictions that I have for Toronto’s laneways. And one of them is what I refer to as a “market inversion.” What I mean by this is that I think we’ll start to see the laneway side of lots become more desirable than their traditional street frontages.

    Maybe it won’t be a universal thing, but I definitely think we’ll stop thinking about laneways as being the “rear” or “backside” of lots and just think of them as quieter and more intimate streets. Because here’s the thing, as more and more laneway houses get built, we are, in a lot of cases, removing parking at the same time. And so generally speaking, as time goes on, our laneways are going to become even more pedestrian-oriented by default.

    Now here’s a built example.

    Designed by Williamson Williamson, I think this house, called the Garden Laneway House, is immediately notable for two reasons. One, the overall design is beautiful, especially the exterior brickwork. I mean, wow:

    And two, it is a 4-bedroom house for a family of five. In fact, what the family did is turn the front house into a duplex, creating three homes on a lot where previously there was only one. And from the looks of it, it was their preference to live in the laneway house and use the laneway as their front door.

    This is exactly the sort of thing that I was getting at with my predictions post.

    Photos/Plans: Scott Norsworthy & Williamson Williamson

  • What the NAR’s $418 million settlement could mean for the real estate industry

    The $418 million commissions lawsuit that was settled last week with the National Association of Realtors (NAR) is certainly a big deal. The NAR is trying to sound positive, but all signs point to this outcome being meaningful for the industry. TD Cowen Insights is forecasting that commissions paid in the US each year could fall by some $25 to $50 billion (from a total of ~$100 billion). And this is the headline you’ll see everywhere right now. But how might this actually happen?

    As we’ve talked about before, the status quo commissions set up is a good one for agents:

    • Sellers are typically the party who pays 100% of the commissions
    • But sellers don’t pay until the agent sells and they have fresh cash
    • Money being deducted from proceeds (a “take rate”) is a lot less noticeable and has a lot less friction than cash you just have to pay out of pocket
    • Buyers kind of don’t pay — or at least that’s how they’re supposed to feel

    This is “good” because it perpetuates the existing model. If buyers feel like they’re mostly not paying, they’re just going to go to the marketplace with the most supply of homes. And that marketplace is the Multiple Listing Service (MLS). However, this marketplace also does things like tell buyer agents how much commission they will make as part of each deal. And the belief is that practices like this are anticompetitive.

    So as part of the above settlement, the following new rules are expected to go into place by July 2024 in the US:

    • Seller agents will no longer be able to set compensation for buyer agents
    • All fields on MLS displaying broker compensation will need to be removed
    • Furthermore, agents will no longer even need to subscribe to an MLS in order to accept compensation
    • Buyers working with an agent will need to enter into their own buyer broker agreement and negotiate compensation separately
    • However, there’s nothing stopping buyers and sellers from negotiating whatever commission structure they want; the idea is simply that it will be more transparent and negotiated by each participant

    Why this is meaningful is that it decouples buyer agents and seller agents in a way that they aren’t today. Instead of everything originating from the sell side, each side of the transaction is now going to — theoretically at least — negotiate what they believe is fair compensation for their representation. At the same time, there’s no obligation to even subscribe to an MLS.

    This leads us to, at least, two important things to think about:

    1. What is fair compensation? Well, it should depend. If I’m a first-time buyer, I may want someone to walk me through the entire process. But if I’ve done it many times before, maybe I need very little. Or, if I’m an investor looking to renovate homes, maybe I want representation that is also an expert on construction. The point is that, in a truly open market, one should be able to find an agent and pay them based on the value that they’re creating. And this is presumably why everyone is expecting commissions to fall precipitously.
    2. If there’s no obligation to even subscribe to an MLS, does this then open the door for new and more open listing platforms? Right now, I don’t know how this will play out. I’d like to better understand more of the details around this settlement item and what it could mean for the landscape. But I do know that the way to spur the most amount of innovation would be to have the marketplace run on something like a blockchain, and then allow anyone to create their own listing platform on top of it. One day.

    This will be fascinating to watch play out. And I’m sure it’s only a matter of time before it spurs similar changes here in Canada. Expect further coverage of this topic on the blog.

    Photo by Tom Rumble on Unsplash

  • How Muji is collaborating with Japan’s housing agency

    This is a familiar story that is, of course, not unique to Japan:

    “Danchi”, or apartment blocks built by Japan’s housing agency during the country’s high-growth period, may look grim and outdated in today’s Tokyo, where flashy glass and steel towers reign.

    However, I only just learned that, since 2013, the Japanese houseware brand Muji has been renovating apartments within these housing blocks in an attempt to reduce vacancies:

    But danchi are becoming hip again, thanks to modern renovations by lifestyle brand Muji, which is turning the poky, multi-room flats into open-plan studios.

    The above excerpts are from a 2015 article, but this partnership between Muji and Japan’s Urban Renaissance (UR) Agency continues to this day. Today, they’re also focused on creating a greater sense of community within these danchi neighborhoods.

    It’s a logical collaboration. Both want to bring good and affordable design to the masses. And obviously there are brand benefits for Muji. It’s a way to expose more people to their products.

    But what I find particularly interesting is that it, once again, shows the potential of a strong brand within the real estate industry.

    According to the same 2015 article, as soon as Muji completed its first round of apartment renovations, UR saw 2x the number rental applications from people in their 20s and 30s. Perhaps the number is even higher today.

    Clearly what happened is that you had young followers of the brand who said to themselves, “oh if Muji is involved, it must then be cool and nice, and so I’d like to live there.”

    I mention this because, as a gross generalization, real estate companies don’t seem to focus on their own brands in the same way other companies do. (Again, I’m making a gross generalization.)

    Instead, they often rely on 3rd party brands — hotel brands, fashion brands, and whatever else — to augment as needed. (See “Dubai is now the capital of branded residences.”)

    Maybe this is truly the optimal way to do it. Just partner as needed. Or maybe more real estate companies should invest in their own brand.

    Photo by taro ohtani on Unsplash

  • Dynamic transit pricing

    Over the years on this blog, we’ve spoken a lot about dynamic pricing when it comes to roads and traffic congestion. And in this instance, the principal intents are to price congestion, improve traffic flows, and encourage other modes of transport. It follows the logic that if you’re going to tax things, tax the things you want less of.

    But what about using dynamic pricing for the opposite purpose — to induce demand?

    Diana Lind recently wrote about this here and talked about how London is exploring using dynamic pricing on its transit system. But rather than increasing prices during periods of high demand, I would imagine that the idea is to reduce prices when demand is lower. Already, it is piloting reduced fares on Fridays when its ridership drops by about 10%.

    It’s an interesting idea because, if done correctly, it should get more bums into seats on transit. And maybe it’s actually a more equitable pricing model.

  • Modest and beautiful

    It is hard to argue that this isn’t a beautiful building:

    Designed by Morris Adjmi Architects and located at the corner of Grand and Mulberry in New York City, it is exactly the kind of building that many of us would like to see more of in our cities. It has retail at grade and it’s, you know, modest in scale at only 7 stories, 20 units, and 35,765 square feet.

    Looking inside, here are some of the floor plans:

    Overall, I would say that these layouts are more generous than what you would typically find in new builds here in Toronto. For new condominiums, 686 sf would be considered large for a one bedroom. Many/most sales teams/departments would tell you to turn this into a two bedroom.

    But this doesn’t mean that developers in NYC are simply being more generous with their square feet. It all costs money. And according to StreetEasy, the average sale price in this building is US$1,979,210 and the average price per square foot is US$2,384 (19 most recent sales).

    This is another reminder that modest and beautiful can often equal expensive. It’s how you make the math work, or at least hope to.