This evening I participated in a roundtable discussion at WORKshop here in Toronto. It was part of an exhibition that they currently have on called, Toronto 2020: Where Will We Live? They are located in the concourse level of 80 Bloor Street West, so go check them out.

The discussion this evening was all about the dramatic change in Toronto’s urban form over the last decade. In other words, the condo boom. We covered everything from the life cycle of buildings and urban design to demographics and policy. It was a lot of fun and I am certain the group could have continued talking all night.

But one thing that I was reminded of this evening is how important it is for great city building to be cross-disciplinary.

Take, for example, architects and (real estate) developers. 

The stereotypical developer is greedy and only concerned with money. They don’t care about the impact that their buildings have on the built environment. On the other hand, the stereotypical architect is only concerned with design and not with the economic feasibility of projects. (I’m exaggerating here for effect.)

The point is that neither of these participants in isolation could build a great city. A beautiful design doesn’t have much value if it can’t be financed and built. And a highly financeable project could end up contributing nothing to the city. In some cases it could actually detract from the built environment.

So if we really want to build truly great cities, I believe it needs to be a collaborative effort. We need to bridge the divides in thinking and leverage each other’s strengths. 

I have felt very strongly about this since I first started studying architecture as an undergraduate student, which is how I ended up taking business and real estate classes. I felt and continue to feel that the greatest opportunities exist at the intersection of different ways of thinking.

Last week a friend of mine sent me a really fascinating article from The Economist talking about the role of foreign investors in Vancouver’s housing market. If you subscribe to The Economist, you can click here to read the article. If you don’t subscribe, you’ll have to rely solely on what I’m about to say.

In case you weren’t aware, Vancouver is an incredibly expensive city when it comes to real estate. The average price for a single-family detached house is now around C$1 million. By some measures, that makes it the most expensive housing market in North America. Here’s a chart that looks at house prices as they relate to household income:

According to The Economist, the median household income in Vancouver is $68,970. This places them 23rd out of 28 in terms of Canada’s major cities. So how is it that homes are, on average, selling for $1 million? The locals don’t seem to be able to afford them.

Well, it’s a well known fact that Chinese buyers continue to be an integral part of Vancouver’s housing market. In fact, up until this year, Canada offered a fast track option for citizenship applications if you brought at least $800,000 into the country.

So we know that foreign buyers are having an impact. It’s a phenomenon we’re seeing in many other cities around the world, such as London. But to what extent is hard to measure–which has forced analysts to get creative.

To try and figure out what percentage of homes are going to foreign buyers, analysts have been looking at macro data, filing through sales records, and even monitoring utility bills to see which homes might be sitting empty.

What they found is that there’s a fairly significant correlation between economic activity in China, and Vancouver’s housing market. When the Chinese economy does well, so do Vancouver homes. Interesting. Still, that doesn’t quantify impact.

When analysts looked for utility bills that would suggest an empty home, they found that only about 8% of high end downtown condos were likely sitting empty. That’s a relatively small amount. It could be vacancy rate.

But when they looked for “mainland Chinese-sounding names” on sales records, they found that for homes priced $3M and up, almost ¾ of the buyers could be from mainland China. Now that’s a significant number!

I found this all rather fascinating and I thought you all might as well. It yet again reminds me of how much opacity there is in real estate markets. We’re all craving better data. Why else would people be scouring utility bills?

There’s a fairly real divide between east and west here in Toronto. When people talk about real estate or describe the kind of person they are, they often say things like: “I’m an east end kind of person” or “I only want to buy on the west side.” There’s such a split that somebody recently said in a meeting I was in that the east vs. west real estate divide is like Christianity vs. Judaism. 

Historically, the west has generally been considered more desirable than the east–regardless of what scale you’re looking at. Downtown west vs. downtown east, Etobicoke vs. Scarborough, and so on. And for whatever reason, this seems to be the case in a lot cities I’ve been to. Consider Montreal, Vancouver, New York, and London, to name a few. 

But lately, I’ve been noticing a growing acceptance of the east side. Friends are telling me that, even though they don’t know the east all that well, they’re almost agnostic to which side they buy a home on.

At the same time, we’re seeing Toronto’s development boom spread to the east along streets like Church and Jarvis; paralleling the kind of intensification we’ve already seen on the west along Bay Street, University Avenue and further. I’m also noticing a lot of west end restauranteurs open up on the east side. See Carbon Bar and Gusto 501 as two recent examples.

But with the neighborhoods like the Distillery District and Leslieville attracting lots of yuppies and with neighborhoods like Regent Park and the West Don Lands coming online, it shouldn’t come as a big surprise to you that developers and other entrepreneurs are looking east. Maybe you should too.