About Here makes excellent videos about cities. Here's their latest about missing middle housing:

In my view, there are two key takeaways.

The first is that cities need to spend way more time understanding the economics of missing middle housing. As Uytae Lee says in the video, our land use policies need to respond to real math and overall financial viability.

The second is that there's real potential here. Uytae gives the example of Auckland which, according to the video, managed to deliver 20,000 new missing middle homes in a 5-year time period.

This is meaningful! And, it is suggested that this has reduced rents in the city by somewhere between 13-35% compared to where they might have gone had this new housing not been built.

As I've said many times before on the blog, the devil is in the details. The headline may sound really great that some city is now allowing 4 or 6 homes on every single-family lot, but that doesn't necessarily mean that any new homes will actually be built.

It's important we change that.

P.S. Thanks to Michael Geller for sharing this video with me.

New Zealand has been in the news lately for sweeping housing legislation that effectively abolishes single-family zoning throughout most of Auckland, Hamilton, Tauranga, Wellington, and Christchurch.

But before I get into how this will all work, here's a bit of background from an article that Matt Gurney wrote talking about Toronto's inability to build affordable housing and create safe streets:

Now it’s time to segue back to the New Zealand thing, and there’s no particularly graceful way to do it, so I’ll just be blunt and inelegant: the federal government in New Zealand intervened on local housing rules because there was a crisis that local leaders were unable or unwilling to address. New Zealand has severe housing-affordability challenges (though Canada seems determined to close the gap). This has been a problem in New Zealand for years, and not enough was done, so the federal government stepped in... The government expects this to immediately spur construction of new housing units.

It is no doubt a top down approach. But we all know how difficult it is to build anything at all when you start from the other end.

So the way this new legislation will work is that it forces local councils to allow landowners to build up to 3 homes and 3 storeys on most lots. This is instead of 1 home per lot. The maximum site coverage has also been increased to 50%. And all of this will be available on an as-of-right basis, so no special permissions or variances needed.

The pitch is that this will unlock as many as 105,000 new homes in already built-up areas. This is, of course, a good thing for a whole host of reasons. It uses land and infrastructure more efficiently, it makes public transit more viable, and it increases housing supply in a highly constrained market.

I suspect that we will be seeing a lot more of this in the coming years.

Earlier in the week, my friend Rodney Wilts of Theia Partners sent me a JLL report called, World Cities: Mapping the Pathways to Success. I am admittedly only getting around to it now.

The report proposes a new typology of world cities that looks like this:

It is based on 10 overall categories of cities, grouped into 4 main buckets. The first bucket is “Established World Cities”, within which there is the “Big Seven”, and then the “Contenders.”

The Real Estate Highlights that accompany each category of city is a good place to start if you’re looking to do a quick scan of the report.

Here’s a taste:

One-quarter of all capital invested in commercial real estate globally currently lands in one of the “Big Seven” cities. And London and New York are easily at the top.

Cities that recently graduated from “New World City” status – namely Toronto, San Francisco, Sydney, and Amsterdam – are all struggling to address housing and infrastructure deficits.

“Lifestyle” cities – such as Vancouver, Auckland, and Oslo – are some of the most active investment markets. Biggest rental growth for prime offices (since 2000) in the “New World Cities” category.

Click here for the full report.

About Here makes excellent videos about cities. Here's their latest about missing middle housing:

In my view, there are two key takeaways.

The first is that cities need to spend way more time understanding the economics of missing middle housing. As Uytae Lee says in the video, our land use policies need to respond to real math and overall financial viability.

The second is that there's real potential here. Uytae gives the example of Auckland which, according to the video, managed to deliver 20,000 new missing middle homes in a 5-year time period.

This is meaningful! And, it is suggested that this has reduced rents in the city by somewhere between 13-35% compared to where they might have gone had this new housing not been built.

As I've said many times before on the blog, the devil is in the details. The headline may sound really great that some city is now allowing 4 or 6 homes on every single-family lot, but that doesn't necessarily mean that any new homes will actually be built.

It's important we change that.

P.S. Thanks to Michael Geller for sharing this video with me.

New Zealand has been in the news lately for sweeping housing legislation that effectively abolishes single-family zoning throughout most of Auckland, Hamilton, Tauranga, Wellington, and Christchurch.

But before I get into how this will all work, here's a bit of background from an article that Matt Gurney wrote talking about Toronto's inability to build affordable housing and create safe streets:

Now it’s time to segue back to the New Zealand thing, and there’s no particularly graceful way to do it, so I’ll just be blunt and inelegant: the federal government in New Zealand intervened on local housing rules because there was a crisis that local leaders were unable or unwilling to address. New Zealand has severe housing-affordability challenges (though Canada seems determined to close the gap). This has been a problem in New Zealand for years, and not enough was done, so the federal government stepped in... The government expects this to immediately spur construction of new housing units.

It is no doubt a top down approach. But we all know how difficult it is to build anything at all when you start from the other end.

So the way this new legislation will work is that it forces local councils to allow landowners to build up to 3 homes and 3 storeys on most lots. This is instead of 1 home per lot. The maximum site coverage has also been increased to 50%. And all of this will be available on an as-of-right basis, so no special permissions or variances needed.

The pitch is that this will unlock as many as 105,000 new homes in already built-up areas. This is, of course, a good thing for a whole host of reasons. It uses land and infrastructure more efficiently, it makes public transit more viable, and it increases housing supply in a highly constrained market.

I suspect that we will be seeing a lot more of this in the coming years.

Earlier in the week, my friend Rodney Wilts of Theia Partners sent me a JLL report called, World Cities: Mapping the Pathways to Success. I am admittedly only getting around to it now.

The report proposes a new typology of world cities that looks like this:

It is based on 10 overall categories of cities, grouped into 4 main buckets. The first bucket is “Established World Cities”, within which there is the “Big Seven”, and then the “Contenders.”

The Real Estate Highlights that accompany each category of city is a good place to start if you’re looking to do a quick scan of the report.

Here’s a taste:

One-quarter of all capital invested in commercial real estate globally currently lands in one of the “Big Seven” cities. And London and New York are easily at the top.

Cities that recently graduated from “New World City” status – namely Toronto, San Francisco, Sydney, and Amsterdam – are all struggling to address housing and infrastructure deficits.

“Lifestyle” cities – such as Vancouver, Auckland, and Oslo – are some of the most active investment markets. Biggest rental growth for prime offices (since 2000) in the “New World Cities” category.

Click here for the full report.