Author: Brandon Graham Donnelly

• Forty

  

  Today is my fortieth birthday. And despite a noble attempt to avoid having meetings today, I spent a big chunk of the day in them. Thankfully, I was also fortunate to spend a lot of time with family, friends, and colleagues (see evidence above).

  This is a birthday where I think I’m supposed to feel things. And I do. I’m grateful for the wonderful people that I get to have in my life and who love me. I feel lucky that I get to wake up every day and do something I love. And I’m genuinely excited for this next decade.

  It is, however, true that time does speed up. It feels like just yesterday that I was 30 years old. I had just finished my MBA. I was about to start writing this daily blog (yes it’s nearly a decade old). And I was trying to figure out how to make an impact on the world.

  Maybe not much has changed. It’s not in my nature to feel complacent. But there is something nice about getting older and feeling more confident with yourself and your abilities.

  If anything, birthdays are a good reminder that time is precious. We only have so many weeks. So we shouldn’t feel shy about asking the world for what we want. I think that’s what I’m feeling most this birthday, and I view that as an exciting thing. So here’s to forty years.

  2023.05.02

• How Paris’ zoning envelope has changed over the centuries

  I came across this French paper over the weekend, while I was at the gym pretending to work out my legs. It is a fascinating look at the evolution of Parisian urbanism from 1600-1902, including how the city’s height limits have changed over the centuries. Here, for example, are two section diagrams showing the allowable building envelopes for both an 8 meter street and a 10 meter street:

  

  The way to read these is to start at the bottom with the width of the right-of-way (“voie”). As you move up, it then gives you the allowable heights for various dates. So for example, in 1667, the allowable building height for a 10 meter street was 15.60m. After this height, there was then a requirement to stepback following a 45 degree angular plane. Or in some cases, following a certain radius:

  

  We don’t have a ton of 8 and 10-meter wide streets here in Toronto, but there are obvious similarities between what is shown here and what is in our mid-rise design guidelines. Of course, the big difference is that we’re mostly zoned for low-rises houses and Paris is not. This broader context matters a great deal and it’s why I keep asking: Are you sure you want Parisian-style urbanism?

  2023.05.01

• Toronto’s longest running fashion week

  

  This past weekend we went to check out Fashion Art Toronto.

  I’ll be honest and say that I had never heard of it before we bought tickets. Even though technically, it is the longest running fashion week in the city because of Toronto Fashion Week getting briefly cancelled in 2016, when its corporate sponsor pulled out. I also had no idea that Peter Freed, of Freed Developments, ended up purchasing the TFW brand later that year. I have been told he talks about it on this episode of Toronto Under Construction, but I haven’t had a chance to listen to it just yet.

  Getting back to FAT (the acronym is deliberate), it was a cool event. There were of course various runway shows throughout the day and evening, but there were also a few art installations and a retail area for local designers (see below). Tricon Residential and Kronenbourg 1664 Blanc were major sponsors, and were giving out popcorn and beer. And in general, the crowd was dressed in ways that made me feel both old and stuffy. It was a lot of fun.

  

  It was also in a warehouse in the Junction. Well, technically I think the neighborhood is called Harwood. But if you’re even remotely close to the Junction nowadays, it is vital that you just assimilate. That’s how this stuff works. As soon as a neighborhood has a successful brand, its boundaries get invariably stretched in every way possible. I suppose this is the Darwinian world of urban neighborhoods. There is always a chance that you may not make it and you might just get absorbed by a neighboring faction.

  

  I would also add that a lot of creative uses in need of space — whether it’s a fashion show or a DJ event — seem to be gravitating towards this northern part of the Junction. If you see an event location that says “undisclosed warehouse”, chances are it will be here. This is, of course, another naturally occurring urban phenomenon. It is the whole “new ideas require old buildings” thing, which really just means that new ideas require cheaper rents. And generally, it is a good positive leading indicator for an area.

  Having said all this, I do think there’s a lot of room for Toronto to step up its commitment to fashion and the arts. This is not a world that I live in, and I am not criticizing the good work of Fashion Art Toronto or Toronto Fashion Week. I just think that for a global city of our size and influence, we should be much better. I saw some of this city’s ambition, talent, and diversity in a warehouse in the Junction this past weekend. It’s just too bad that it’s not on stage for the rest of the world to see.

  2023.04.30

• What are the opportunity costs of not building new housing?

  

  The stated policy goal of inclusionary zoning is to to produce more affordable housing. We can debate who ultimately pays for this below-market housing, and we have many times before on the blog, but for the purposes of this post let’s just focus on its stated goal.

  Given this ambition, it makes sense to carefully measure the number of affordable homes produced. And that is ordinarily what is done: “We implemented this new policy on this date, and since then we have produced X amount of new affordable housing.”

  It is then likely that we will take X and form opinions on whether it was a successful policy or not. If X seems like a lot, then maybe we think it’s a good policy. And if X doesn’t seem like a lot, then maybe we think it was a bad policy, or perhaps just an ineffective one.

  But what is largely impossible to measure with any real precision is the number of new market-rate homes that are now not being built as a result of a policy. Let’s call this number Y. It is, of course, possible to come up with an estimate by looking broadly at rents across the city, plugging in some development costs, and seeing what pencils. But this is a rough approximation.

  It does not capture the countless times that a developer has looked at a possible housing site, only to come to the conclusion that it is not feasible to build. There is no official Y figure. And any amorphous estimates of Y are going to be easy to ignore by the general public anyway. Unbuilt homes? Opportunity costs? What?

  I am saying (okay repeating) all of this because I continue to feel like most people believe that development will just happen no matter what is thrown at it. There is a housing shortage, right? So developers should just do what they do best and build today. Surely they could if they were genuinely nice people and really wanted to. Hmm.

  What many people seem to ignore (or not know) is that development, and in turn new housing supply, operates under this very simple decision tree:

  • Find development site
  • Underwrite said site
  • If math works, seek capital/investors and then build
  • If math does not work, do not build
  • If math works, but capital doesn’t like it, also do not build (most can’t in this scenario)
  • Repeat

  Just because you aren’t seeing or noticing something, it does not mean that it doesn’t exist and that it’s not happening behind the scenes.

  2023.04.29

• Timing matters in development

  Early on in my career, I worked on a new office development where the decision was made to start construction having only pre-leased 25% of the building. (It may have actually been closer to 22% if my memory serves me correctly.)

  Our big constraint at the time was that this first tenant had to be out of their current space by a certain date, and the only way we could meet their deadline was to immediately start construction. Otherwise, we knew we would lose them to another development or to an existing building.

  To convince ourselves that this was a reasonable thing to do, we looked at all of the upcoming lease expiries in the market, and then came to the conclusion that there would be enough demand in the coming years to fill the rest of the building.

  Still, we were taking a leap of faith, even if it was an informed one. And it meant running the project entirely on equity until we could secure a construction loan. Thankfully, in this particular instance, our hypothesis proved true. The lease expiries did end up creating the demand we were hoping for and so we were able to fill the rest of the building.

  The project was a success.

  But that was then. And in hindsight, this move feels scary. What would have happened had we made this exact same decision at the end of 2019? Things would have been very different. Not because of a fundamentally different decision on our part, but because of a black swan event that was truly impossible to predict. Our timing would have been bad.

  This is just one example of the many risks associated with the building of buildings. Development never happens in a vacuum. You’re always solving for a long list of constraints. And sometimes you need to solve for things that you don’t even know exist yet.

  2023.04.28

• Singapore increases property stamp duty for foreigners to 60%

  Singapore isn’t exactly saying that foreigners can’t buy homes there, but it did just increase the stamp duty on purchases by foreigners to 60%. So it is saying that maybe you shouldn’t do it, unless you want to pay a lot of tax.

  On the other hand, if you’re a foreigner with permanent residency in Singapore, the stamp duty is only 5%. But if you then want to buy a second property, the rate jumps to 30% (up from the previous rate of 25%). Companies or trusts that buy any sort of residential property also now need to pay a stamp duty of 65% (up from 35%).

  The official message is that these are “pre-emptive measures” to cool demand, which I guess is mostly aimed at mainland Chinese buyers. This is the largest group. Last year, they accounted for about 25% of foreign condo purchases in Singapore. However, the total number of homes purchased by foreigners remains pretty low at just 4.7% (2022). Though first quarter data from this year does suggest the number has increased to about 7%.

  Even still, how many homes is this?

  Based on this information, there were 20,909 private home sales in Singapore in 2020. So let’s assume this has since increased and the number is, oh I don’t know, somewhere around 25,000 homes per year. At 7%, that’s 1,750 homes being sold to foreigners each year. Going forward, I don’t know how many people are going to be willing to pay the 60% stamp duty, but presumably some will still do it.

  If we pick a random number and assume that this higher tax wipes out 80% of the foreign demand, then that’s an additional 1,400 homes for locals and only 350 homes going to foreigners each year. Maybe this is something?

  2023.04.27

• Junction House just got its placemaking art

  Today was a fantastic day for the development manic meter. This was finally installed at Junction House:

  

  

  

  If you happen to find yourself in the area, check it out at 2720 Dundas Street West. And if you’d like to know a little bit about how this placemaking art came to be, click here.

  2023.04.26

• It’s decision time on fourplexes in Toronto

  We talk a lot about “missing middle” housing on this blog and, most recently, we’ve been talking about Toronto’s proposed amendments to allow fourplexes across the city and to do away with density maximums (among other things).

  Well, it’s now time to make a decision. These proposed changes are headed to Planning and Housing Committee on Thursday, April 27th. If you’d like to attend in person or virtually, here’s a copy of the public meeting notice.

  The other option is to make a written submission. The good people over at “More Neighbours Toronto” have created this website which will allow you to quickly write the Committee.

  There’s an auto-generated response in support of legalizing multiplex housing — and that’s what I used for my boring email submission — but, of course, you’re free to edit the text as you’d like.

  If you check the agenda, you’ll see that there are already hundreds of email submissions in to the Committee, many of them coming from More Neighbours. Clearly this is a topic that, one way or the other, many people feel very strongly about.

  Click here to make an email submission.

  2023.04.25

• Measuring downtown recoveries using mobile phone data

  The School of Cities at the University of Toronto and the Institute for Governmental Studies at the University of California, Berkeley have been using mobile phone data to track the recovery of 62 downtowns across North America. This work has been being published at downtownrecovery.com, but it has also been widely cited.

  First, to be clear on how this works, the data they are collecting is not dependent on people actually making calls or actively consuming data on their phone; instead it is simply based on people having a phone with them and being physically located in one these 62 downtowns. It also covers the period between January 2019 and November 2022, and includes cities with least 350,000 people.

  I’m not exactly sure how long the phones need to be in a particular place or how they treat time in their data, but the unit of measure is something that they call a “Point of Interest.” This includes things like restaurants and shops, so presumably this data isn’t just saying, ” I went downtown and sat in my office for 8 hours.” It could also be, “I went downtown and ate good pasta.”

  I say this because, based on my understanding of the data, having a high Recovery Quotient (RQ) could mean a number of different things. It could mean that more people are back in the office, but it could also mean that the downtown isn’t a monoculture and that it has other things going on besides just work.

  In any event, here’s what they have found:

  

  The headline finding is that San Francisco has the lowest RQ at 31% and Salt Lake City has the highest at 135%. There does appear to be a bias toward higher recoveries with mid-sized cities, and one of the reasons for this is that these recovery quotients appear to be correlated with average commute times:

  

  Some of the other strongly correlated explanations, include the percentage of jobs in professional, scientific, and technical fields:

  

  And the number of days that events were shut down during the pandemic (note the Canadian cities on the right below; welcome, New Orleans):

  

  I suppose one way to grossly oversimplify these findings is to say that some people have been avoiding going downtown if they can’t quickly drive there (and have to take transit), if their job more easily allows them to work from home, and if things were shut down for too long during the pandemic. Because if it was, they maybe forgot about all of the fun things that typically happen downtown.

  Image: The School of Cities

  2023.04.24

• IKEA has just hired photographer Annie Leibovitz to document normal people doing normal things in their homes

  

  Last year, IKEA went around the world interviewing some 37,000 people in 37 countries about what it takes to “make us feel at home.” And one of the things that they discovered was that nearly 50% of people do not feel like their home reality is authentically represented by what they see in the media. In other words, there is a disconnect between how we actually live at home and how the media suggests we are or ought to be living.

  To explore this disconnect a little further, IKEA has just announced that photographer Annie Leibovitz will be the company’s inaugural Artist in Residence. Leibovitz is best known for her celebrity photographs. But for this assignment, she’s going to be travelling to the US, the UK, Japan, Germany, Italy, India, and Sweden, to photograph normal people doing normal things in their homes.

  This is a fascinating idea because we know that there are all kinds of cultural biases around housing. Here in North America, for example, there is a longstanding history of hating apartments. If you wanted to properly raise a family, you needed a morally correct form of housing; meaning, a grade-related house. But this reality isn’t universally possible in most big cities today, and that is probably one of the reasons why we now have this disconnect:

  …why do people feel like they’re not represented in the media, that they’re left out? ‘In the same way that there has been a typical idea in the fashion industry about what size a woman should be, there’s been a typical idea of what a home is,’ wagers Leibovitz. ‘But now we’ve opened up in all sorts of ways, and there’s a difference between a home and feeling at home. And the latter can happen in many different places and maybe that’s more important now than an actual home.’

  On a more basic level, I think people are also just endlessly curious about how people live and what their homes are like. So regardless, this should be interesting.

  Photo by charlesdeluvio on Unsplash

  2023.04.23