Brandon DonnellyCanada must become a global superpower
The silver lining to the US starting a trade war with Canada and regularly threatening annexation is that it has forced this country out of complacency. Indeed, I'm hard pressed to remember a time, at least in my lifetime, when patriotism and nationalism has united so much of Canada. According to a recent survey by Angus Reid, the percentage of Canadians expressing a "deep emotional attachment" to the country jumped from 49% in December 2024 to 59% in February 2025. And as further evidence of...
Brandon DonnellyThe bank robbery capital of the world
Between 1985 and 1995, Los Angeles' retail bank branches were robbed some 17,106 times. In 1992, which was the the city's worst year for robberies, the number was 2,641. This roughly translated into about one bank robbery every 45 minutes of each banking day. All of this, according to this CrimeReads piece by Peter Houlahan, gave Los Angeles the dubious title of "The Bank Robbery Capital of the World" during this time period. So what caused this? Well according to Peter it was facil...
Brandon DonnellyThe story behind those pixelated video game mosaics in Paris
If you've ever been to Paris, you've probably noticed the small pixelated art pieces that are scattered all around the city on buildings and various other hard surfaces. Or maybe you haven't seen or noticed them in Paris, but you've seen similarly pixelated mosaics in one of the other 79 cities around the world where they can be found. Or maybe you have no idea what I'm talking about right now. Huh? Here's an example from Bolivia (click here if you can't see...
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Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly.
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Brandon DonnellyCarrots over sticks
This recent article by Inga Saffron in the Philadelphia Inquirer is behind a paywall and so I, admittedly, haven't read it. But it seems to cover a common urban dilemma: Center City Philadelphia has too many surface parking lots while simultaneously having a need for more housing. The problem, as the argument goes, is that the city's tax system is under-assessing vacant land, creating an incentive to sit on it, and a disincentive to develop new housing. The solution: tax land more; tax improvements less.
(Forgive me if this isn't entirely accurate with Saffron's position.)
It's a classic "stick versus carrot" approach. Let's beat landowners and developers into building more housing. Now, in some situations, I can see the allure of this line of thinking. If we're talking about someone who has owned a surface parking lot for many decades and it's generating a nice stream of cash, there might be little incentive to develop it or sell the land to someone who will develop it. But as a general rule, I believe that carrots are far more productive than sticks.
I have at least two concerns with trying to tax landowners into compliance. One, you have to be careful not to create a double-edged sword. Taxing based on the "highest and best use" can work to suppress some of the small businesses that make cities great. For example, should a site with a local bookstore in a small heritage building, or a mom-and-pop restaurant in a single-storey building, be forced into higher-density housing? I don't think so.
Two, blaming low taxes for the lack of housing can distract from the more fundamental question: Why aren't more developers building housing if there's a need and an availability of land? When I lived in Philadelphia during grad school, I remember developers telling me the following: "The thing about Philly is that the build-costs are the same as New York (Philly is a strong labour union city), but the rents you can command are obviously nowhere near the same." Sticks don't work if the math doesn't math!
I don't know how the market has evolved since the late 2000s, but I do know that developers want to develop. And they will do so if the economics make sense and the right carrots exist.
This recent article by Inga Saffron in the Philadelphia Inquirer is behind a paywall and so I, admittedly, haven't read it. But it seems to cover a common urban dilemma: Center City Philadelphia has too many surface parking lots while simultaneously having a need for more housing. The problem, as the argument goes, is that the city's tax system is under-assessing vacant land, creating an incentive to sit on it, and a disincentive to develop new housing. The solution: tax land more; tax improvements less.
(Forgive me if this isn't entirely accurate with Saffron's position.)
It's a classic "stick versus carrot" approach. Let's beat landowners and developers into building more housing. Now, in some situations, I can see the allure of this line of thinking. If we're talking about someone who has owned a surface parking lot for many decades and it's generating a nice stream of cash, there might be little incentive to develop it or sell the land to someone who will develop it. But as a general rule, I believe that carrots are far more productive than sticks.
I have at least two concerns with trying to tax landowners into compliance. One, you have to be careful not to create a double-edged sword. Taxing based on the "highest and best use" can work to suppress some of the small businesses that make cities great. For example, should a site with a local bookstore in a small heritage building, or a mom-and-pop restaurant in a single-storey building, be forced into higher-density housing? I don't think so.
Two, blaming low taxes for the lack of housing can distract from the more fundamental question: Why aren't more developers building housing if there's a need and an availability of land? When I lived in Philadelphia during grad school, I remember developers telling me the following: "The thing about Philly is that the build-costs are the same as New York (Philly is a strong labour union city), but the rents you can command are obviously nowhere near the same." Sticks don't work if the math doesn't math!
I don't know how the market has evolved since the late 2000s, but I do know that developers want to develop. And they will do so if the economics make sense and the right carrots exist.
Support Brandon Donnelly
Brandon DonnellyCarrots over sticks
Subscribe to Brandon Donnelly
Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly.
Brandon DonnellyCanada must become a global superpower
The silver lining to the US starting a trade war with Canada and regularly threatening annexation is that it has forced this country out of complacency. Indeed, I'm hard pressed to remember a time, at least in my lifetime, when patriotism and nationalism has united so much of Canada. According to a recent survey by Angus Reid, the percentage of Canadians expressing a "deep emotional attachment" to the country jumped from 49% in December 2024 to 59% in February 2025. And as further evidence of...
Brandon DonnellyThe bank robbery capital of the world
Between 1985 and 1995, Los Angeles' retail bank branches were robbed some 17,106 times. In 1992, which was the the city's worst year for robberies, the number was 2,641. This roughly translated into about one bank robbery every 45 minutes of each banking day. All of this, according to this CrimeReads piece by Peter Houlahan, gave Los Angeles the dubious title of "The Bank Robbery Capital of the World" during this time period. So what caused this? Well according to Peter it was facil...
Brandon DonnellyThe story behind those pixelated video game mosaics in Paris
If you've ever been to Paris, you've probably noticed the small pixelated art pieces that are scattered all around the city on buildings and various other hard surfaces. Or maybe you haven't seen or noticed them in Paris, but you've seen similarly pixelated mosaics in one of the other 79 cities around the world where they can be found. Or maybe you have no idea what I'm talking about right now. Huh? Here's an example from Bolivia (click here if you can't see...
Not a Georgist?: https://en.wikipedia.org/wiki/Land_value_tax
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Not a Georgist?: https://en.wikipedia.org/wiki/Land_value_tax