Join >4.5k subscribers and stay updated by getting the latest posts delivered directly to your inbox.
Today I'm excited to announce the latest artist collaboration at Junction House. (For a background on the others, click here.) Bogota-born, Toronto-based Juanita Lee-Garcia has created a series of hand-cut collage panels for the construction hoarding at Junction House (the background color is the project's signature electric blue color).
In this installation, Lee-Garcia uses repetition and image repurposing to investigate the limits and the potential of decor in consumer culture. Her work uses simple gestures such as slicing, inserting, folding, and layering to build these new and abstract forms. They are intended to feel both fresh and unfamiliar, as well as comforting -- perhaps because of some of their cultural associations.
We love these sorts of collaborations because we want every single one of our development projects to be more than just a new building. We want it to be a catalyst for positive city building change. So the next time you're in the Junction, I would encourage you to stop by 2720 Dundas Street West and take in Juanita's work. Limited edition prints of the panels are also available on her website.
Why do some buildings cost more to build than others? And how is it that some cities, as a whole, seem to build more cost effectively than others? Without getting into the specifics of how different markets work, I thought it would be valuable to outline some of the cost drivers that impact new developments. But keep in mind that this is by no means an exhaustive list. So, please feel free to add whatever I've missed to the comment section below.
Below-grade parking is hugely expensive. It's almost always a loss leader. You lose money building it. That's why parking ratios matter a great deal. If you're building in the suburbs at 1 to 1 parking vs. 0.2 in the core, you're simply building more of something that doesn't make money. There's also the question of whether you need to build a watertight below-grade, or if you can discharge any groundwater into the municipal infrastructure. Big cost difference.
Union vs. non-union construction labor.
Building stepbacks add cost and create additional complexity. To build more cost effectively, you really want repetition. But terraces are awesome. I get it.
Impact fees, development levies, and other government fees can vary widely across cities. As I've mentioned many times before on the blog, these line items can add up to 20-24% of the price of a new condominium here Toronto.
Time is expensive. One of the bigger line items in a development pro forma is financing interest charges. The longer things take, the more expensive the housing needs to be.
Markets are unique. Quebec, for example, has relatively low electricity rates. For this reason, it's pretty common for homes in Quebec to use electric heating, which is usually pretty cost effective to install. According to this 2019 study, 68% of Ontario households rely on natural gas heating. In Quebec, the number is only 5%.
Depending on what you're building next to, you may face additional costs. For example, if you're building right up against a rail line, you may need to construct a "crash wall" in order to safeguard against possible derailments and you'll probably need to up the STC rating on your windows because of the higher noise levels. These costs will not be insignificant.
In theory, land costs are supposed to be the residual claimant in a development pro forma. What that means is that you should back into your land value after calculating your projected revenue and considering all of your other development costs. If your revenue is lower, so too should be your land cost. Land cost as a percentage of total costs will, naturally, vary across different markets.
Here's a weekly round up of links and articles that you may find interesting. The topics cover the sorts of things that we usually talk about on this blog.
The latest Mackay Laneway House update is now live on the Globizen Journal. The ground floor steel is complete, with framing currently underway. The post has some background on the challenges faced in order to get to this stage.
Brick comparison. Here's a recent tweet of mine. I'm curious if any of you can tell the difference between these two brick finishes and if you have a clear preference. One of them is stamped concrete and the other is real brick (precast concrete with brick slips).
Pools as art. Apparently this is a trend right now, but it's not necessarily a new one. Pablo Picasso accidentally created one when he "signed" the bottom of one in Spain back in the early 1960s. A pool would be fun right now. [FT paywall]
Alley house in King's Cross by architect David Adjaye is currently on the market for £6.5 million. Lots of black. I love the mint green room with the exposed concrete ceiling. Oh, and there's a pool.
Nightclubs are, not surprisingly, really struggling. Most have been closed since March. Unlike restaurants, you can't really hack together a solution with outdoor dining, heat lamps and takeout. They're predicated on people being proximate to each other. [Sorry, another FT paywall]
SPACs are so hot right now, particularly in the world of Chamath Palihapitiya and Social Capital. A good follow-up to this week's earlier post about $IPOB's merger with real estate startup Opendoor.
Monocle has just published a new book about "gentle living." It's a guide to "slowing down, enjoying more and being happy." I'm trying to do more of this, or at least be more mindful about it. It doesn't always/usually work. Perhaps I need this book.
"Decade of the home." Opinion piece about the current desire for suburban over urban locations. If you're a regular reader of this blog, you'll know that I am steadfast in my belief that urban life is going to prove to be incredibly resilient on the other side of this.
McKinsey report about the impact that lockdown is having on digital adoption, e-commerce penetration, and the overall customer experience. You'll need to enter some information in order to download the PDF, but it's free.
Photo: Lost House by Adjaye Associates via The Modern House
Share Dialog
Share Dialog
Share Dialog
