Author: Brandon Graham Donnelly

• Construction site day

  Thursday mornings have become my construction site time. I start off at Junction House. I walk the site with the team. We meet and use a lot of profanities. And then I head over to One Delisle for a similar set of activities. It is one of my favorite times of the week because, as a developer, you get to see all of your work coming together in a real and physical thing.

  The views can also be pretty nice. Here is photo of the downtown skyline from Junction House this morning (there was a bit of fog):

  

  I know this goes without saying, but I think it is crucial to walk one’s sites. There’s no way to do this in sweatpants over Zoom. You need to see the details. You need to build relationships. And you need to problem solve with the team. It’s also a great opportunity to learn — generally and from mistakes — and get better as a professional.

  Here’s the thing about development: sometimes you’re flying at 10,000 feet and sometimes you’re talking about how many layers of drywall are appropriate for demising walls. It’s a lot of fun.

  2022.11.03

• 70% of Hong Kong’s housing supply is either subsidized or a small unit

  This is an unfortunate distinction:

  Of all the world’s housing crises, Hong Kong’s may be the most formidable. The city of 7.3 million leads the world in housing prices and inequality, with 125,100 millionaires and 1.6 million people living in poverty. Home prices have rocketed by 187% over the last decade. In May, the number of public housing applicants hit 245,000, with an average wait time of 6.1 years — the highest in over two decades. According to lawmaker Scott Leung, a shortage of 30,000 units in the next five years means that the public housing queue will soon stretch to 6.5 years.

  So let’s take a look at overall housing supply (source):

  

  What this chart tells us is the following:

  • For the five-year period from 2017 to 2021, Hong Kong built about 173,900 housing units. That’s somewhere around 34,780 per year.
  • Of these units, 60,700 were subsidized public rental housing units (~35%) and 25,500 were subsidized sale units (~15%). So overall, about half of Hong Kong’s housing supply over the last five years was some form of subsidized housing. That said, the number of public rental housing units has been declining. It was about 70,800 units between 2007 and 2011.
  • Looking at private residential units during this same five-year period, about 35,200 of them (20% of total supply) can be classified as “small units.” These are units with an area less than 40 square meters and, based on the above chart, they obviously represent a rapidly growing market segment.
  • Adding all of this up, we get to 70% of Hong Kong’s housing supply being either (1) a subsidized unit or (2) a small unit under 40 square meters.

  This is how Hong Kong builds, and it clearly isn’t enough to meet demand.

  2022.11.02

• A whole new internet

  I don’t exactly know what “metaverse” means, but what is clear is that nobody really does right now. Here is an excerpt from a recent article by Benedict Evans:

  If the narrow definition of ‘metaverse’ is that VR and AR will be the next smartphone, the broad definition is that there’s going to be a whole new internet. Our experience will be 3D, but much of that will be layered onto the real world as we see it through glasses. Games will become a much larger part of daily life – instead of the current split between a few hundred people playing deep and rich AAA PC and console games and several billion playing much lighter-weight smartphone games, Roblox and Fortnite point to a growing middle ground of persistent, open, accessible and expressive environments that are much more about social and identity than games per se, and that can become platforms and ecosystems for developers. Many of these experiences will blur into each other, and digital goods (skins, avatars and other models of self-expression in digital form) will be portable and interchangeable between these worlds, rather like the characters in Wreck-it Raph could pass between games.

  Some people, namely Mark Zuckerberg, believe that VR is going to be the next smartphone. But Benedict raises an interesting point: the direction of travel for tech seems to be toward less immersion, rather than greater immersion. We used to have giant computers that filled rooms. Then computers got smaller. And now we just carry one around in our pocket and pull it out when we’re standing in a line and bored. Portability and casual usage are what won out. And so is it reasonable to assume that billions of people are going to want to immerse themselves in VR goggles all day?

  I don’t see it. Here’s my working thesis:

  • I am an urbanist. I love cities. And I believe that our deep desire to interact meaningfully with other humans is not going to go away. For this reason, I believe in the less immersion over greater immersion argument.
  • At the same time, blockchain technologies have made it possible for us to own, collect, and trade digital assets — everything from digital fashion to digital art. I think this trend is only going to continue.
  • And as this trend continues, we are going to continually look for ways to display and experience these elements of our digital identity. So how do we make that happen? This is an important part of the conversation around “the next smartphone.”
  • My view is that it’s going to be some version of augmented reality, and that we are going to end up with a continuous blurring of the line between physical and digital.

  But hey, I could be wrong. Time will tell.

  2022.11.01

• The West Toronto Railpath needs to be extended to Union Station

  Following my recent post about cycling to the office, Richard Witt of BDP Quadrangle suggested that I do a post on the West Toronto Railpath and use the little influence that I have to try and encourage further expansion. I thought this was a reasonable idea and so here I am writing about it today.

  For those of you who may not be familiar, the WTR is a multi-use trail that can be used for “human-powered activities” such as biking, running, or unicycling. And as the name suggests, the path runs on an old rail line on the west side of Toronto. Here is the current route map (we’re talking about the dark orange line):

  

  And here’s what it looks like today:

  

  It’s an incredible amenity and piece of infrastructure on the west side of Toronto, but it’s probably also a little underrated. I think of part of this has to do with it being somewhat hidden. And I think another part of this has to do with it being too short.

  Right now the WTR runs from Cariboo Ave in the north — which is around the corner from Junction House — down to Dundas Street West & Sterling Road in the south. But according to the City of Toronto, an expansion phase has already been funded and construction will start next year. This will take its southern terminus down to Queen Street & Sudbury Street:

  

  All of this is, of course, excellent news. But you and I both know that the WTR needs to be further extended to Union Station, then up north, and probably elsewhere too. So I am here today to advocate for that to happen. If we can find a few billion hanging around to rebuild the Gardiner East (ugh), then surely we can scrape together a few more million for this.

  Images: Friends of West Toronto Railpath

  2022.10.31

• Seoul crush

  We have spoken a lot over the years about the benefits of narrow and pedestrian-focused streets. Most recently, I even ran around Europe with a laser distance measuring device to collect a few field samples. Here’s an example from Marseille and here’s an example from Sicily.

  But given all this, I think it is important to recognize that what happened in Seoul over the weekend — a deadly crowd crush that killed over 150 people — is both a horrible tragedy and a result of too many people in a narrow and pedestrian-focused street. So clearly there can be a flip side to what we talk about here. At the time of writing this post, investigations were still ongoing.

  I am not a crowd-control expert, but I have spent time in dense Asian cities during major events and holidays, and never have I felt so claustrophobic. I have lined up for hours to get into subway stations and I have lined up to get into entire city districts — presumably because they were trying to avoid things like what happened this past weekend.

  My heart goes out to all of the people and families that were impacted by this horrific incident.

  🇰🇷 🇨🇦

  2022.10.30

• Building on top of existing buildings

  There is a growing trend in Toronto right now where people want to build on top of existing buildings. We are proposing to do this in midtown at 1 St. Clair Avenue West and, this week, this proposal was announced for the Cambridge Suites Hotel in the Financial District (shout out to Len Abelman).

  Generally speaking, this is something that an owner and/or developer might want to do when you have an older building and there is now “unused” density on the site. By “unused” I mean that if you were developing the land for the first time today, the resulting density would be higher than what is currently on the site.

  Alongside this, it can also be a way to reposition the existing asset. In the case of the Cambridge Suites site, it sounds like the existing 231 hotel keys will be converted to residential.

  At some point in the process you will probably also look at whether it is “better” to tear down the existing building and build new, or whether you should try and build on top. The former is obviously very bad from an embodied carbon perspective but, for whatever reason, this may be the preferred option.

  If you decide to build on top, your structural engineer will love you because the result — for them — will be a far more interesting project compared to a typical high-rise. But interesting comes with its challenges. Here’s how your structural solution might work:

  It’s a complicated project that will require a 10-metre-high bridge structure to be built atop the existing hotel where the roof is removed. The bridge will help bear the weight of the new tower, explains Len Abelman, principal at Toronto’s WZMH Architects, the firm designing the redevelopment for the property’s owner, Centennial Hotels Ltd.

  “It’s not a common technique, it’s challenging. We worked with a firm called RJC Engineers to do simulations of the massing and loading of weight and the lateral forces the building will face, to make sure it will work,” Mr. Abelman says.

  “Other projects in Toronto have added floors before, but it’s usually done with a big exoskeleton that goes over the entire building. This one uses technology that transfers some of the weight to the columns and the floors of the existing structure below,” he says.

  This is similar to what we are doing in midtown, except that we are proposing to retain all of the the existing facades along with the building. It is certainly not the easiest way to build. But we are likely to see more, not less, of it in the city.

  It is evidence of the immense development pressures that certain areas of our region are facing. When you restrict new supply, the market will find somewhere to build, even if it involves a lot of structural gymnastics.

  2022.10.29

• Cycling to the office

  Right now my typical morning commute consists of a 15 minute walk and a quick stop off for a coffee. I must admit that I’m spoiled. But next year I’ll be moving to the Junction and so that means I’m going to need to make some minor adjustments to my routine.

  I fully expect that on warm summer nights I’ll probably still walk home on occasion. But broadly speaking, my loose plan is a combination of cycling, e-scootering, and taking the Union Pearson Express train.

  Then this evening I was out for drinks with one of our partners and two of the guys were talking about how they cycle to work each morning and compete on Strava to make sure everything gets properly logged. One of them actually lives near the Junction and his regular route is down through High Park and then across along the lake.

  Naturally I got inspired and decided — after two beers — that I too should join this competition. So I have now obligated myself to cycling to the office starting next year. That said, I could probably use a new bike, and I’m hoping that some of you will have recommendations.

  My criteria is as follows: it should look impossibly cool, it should work for a daily commute, and it should be at least somewhat suitable for tight-fitting clothes and long rides through the French countryside (even though I currently have no concrete plans of doing such a thing).

  Any thoughts?

  2022.10.28

• Modern luxury

  “Luxury” is an overused term in the world of real estate. If you call everything luxury, then ultimately nothing is luxury, right? But let’s ignore this particular debate for right now. I was recently in a meeting where our interior design team — Mason Studio — made what I think is an important distinction between “classic luxury” and “modern luxury.”

  Classic luxury is old school luxury. It is the kind of luxury that says, “you can’t come in here unless you look like this.” And I’m sure that all of you can think of brands that might speak to you in this way.

  But I think this idea of luxury is quickly changing. Perhaps a good example of “modern luxury” is the recent collaboration between RTFKT — the web3 digital fashion company that Nike bought last year — and high-end luggage company RIMOWA.

  This, to me, is a brilliant collaboration. It is a sign of what’s to come — an ongoing blurring of our physical and digital worlds — and it is a less fussy kind of luxury; maybe I’ll mint an exceptionally expensive piece of luggage, maybe I’ll mint a digital collectible, or maybe I’ll just hang out on Discord.

  Now, one could argue that nothing has really changed and we’re just talking about different kinds of trappings. But that doesn’t feel exactly right. There is something about modern luxury that feels more inclusive to me. And I think that is why it is quickly becoming the dominant form of “luxury” — whatever that means.

  2022.10.27

• A place for everything

  Housing is expensive in California:

  In 2021, San Jose had the least affordable housing among the 92 major US housing markets, with a median multiple of 12.6. San Francisco had a median multiple of 11.8, Los Angeles was at 10.7, followed by San Diego, at 10.1).⁷ Housing was severely unaffordable even in the interior markets, with Riverside-San Bernardino at 7.4 and Sacramento at 6.7.

  And there are some explanations for why that is the case:

  Dartmouth economist William Fischel published an early seminal review ⁹ of housing affordability in California (1970 to the 1990s). Fischel suggested that regulatory research should look for major changes that “are adopted in some places but not in others.”

  Fischel examined the higher house price increases that occurred in California compared to the rest of the nation between the late 1960s and late 1980s. Fischel cites various possible causal factors. He found that the higher prices could not be explained by higher construction cost increases, demand, higher personal income growth, the quality of life, amenities, Proposition 13, land supply or water issues.

  Instead Fischel cites stronger land use restrictions — There were two principal issues, the California Environmental Quality Act (CEQA) and local growth management restrictions.¹⁰

  We have discussed this issue many times before on the blog, but Wendell Cox’s article is helpful in pointing out that zoning in and of itself wasn’t the problem. The problem arose, at least according to Fischel’s research, when these policies went from “ordinary zoning” to something that became a tool to restrict growth.

  The illustrate what “ordinary zoning” means, Cox uses the idiom, “a place for everything, but everything in its place.” And I think this is an interesting way of putting it. Part of the reason why we have zoning is that it is a way to organize uses. It is a way of saying that sex shops and cannabis shops can’t go here, but they can go over there.

  But the key part of this idiom is its first part: a place for everything. What this implies is that the answer should never just be, “no, sorry, you can’t build this.” At most, it should be, “no, sorry, you can’t build this here, but you can over there.” There is a place for everything.

  Of course, this is much harder to do when you flip from sprawl development to infill development. Because now there are fewer places “over there.” You really have to figure out “here.”

  2022.10.26

• The Derek Zoolander autonomous vehicle problem

  According to McKinsey, something like $100 billion has been invested in trying to get autonomous vehicles to work and yet the industry remains stuck with problems like this one here:

  State-of-the-art robot cars also struggle with construction, animals, traffic cones, crossing guards, and what the industry calls “unprotected left turns,” which most of us would call “left turns.”

  The industry says its Derek Zoolander problem applies only to lefts that require navigating oncoming traffic. (Great.) It’s devoted enormous resources to figuring out left turns, but the work continues.

  Right now certainly feels like an autonomous vehicle winter (we have many winters going on at the moment). The industry has spent a lot of time and money getting maybe 90% of the way there, but this last bit has proven to be a lot more challenging than I think most people anticipated.

  This has a lot of people thinking that it’s going to be many decades before we finally get full autonomy (if ever) and that, in the interim, all we will have are very specific use cases: trucks on highways, mining machines (the above article writes about this), and so on.

  This may very well be the case. Frankly, I don’t know. But it’s perhaps important to remember two things: (1) pessimists aren’t usually the ones who change the world and (2) there is something known as the Gartner hype cycle, which is a graphical representation of how new innovations typically get adopted.

  The Gartner hype cycle has five phases. The important ones for this discussion are the first three. First there is a technology trigger. Second there is an inflation of expectations (until it hits a peak). And then third, there is a trough of disillusionment. This is the moment where interest wanes and people begin to think it’ll never happen (until it does happen).

  That might be what we’re living through right now, or it might not be. But my gut tells me that it’s the former.

  2022.10.25