In Chinese culture, certain numbers — like 4 — are generally considered unlucky because of how they sound. I don't speak Mandarin or Cantonese, but as I understand it, 4 sounds similar to "death." And this is even more the case in Cantonese.

Four sounds exactly like death, fourteen sounds like "definitely die," and forty-four is the equivalent of "die, certainly die." (Please correct me if I'm wrong.) It is for this reason that in certain real estate markets, and in particular Cantonese-speaking markets like Hong Kong, 4-related numbers are often avoided whenever possible.

This can also be the case in other markets. Before we launched sales for One Delisle, the team made the decision to be mindful of this superstition and skip floors 4, 14, and 44. The result is that the homes on floor 4 became suite 501, 502, 503, and so on, and the building itself went from having 44 floors to 47 floors.

We did this so that nobody would be buying on the "die, certainly die" floor, and so from a marketing perspective, I think these strategies can make a lot of sense.

But what I would also say is that, from a development perspective, you should avoid this whenever possible. It adds coordination complexity. What we saw happening early on was that someone would say suite 501, and then you'd have someone else question whether they were talking about the suite on architectural/construction/legal level 5 or the suite on marketing level 5.

To solve this, we had to be extremely draconian about how levels and suite numbers were allowed to be communicated. Firstly, there's no such thing as a "legal" suite number. Suite numbers are purely a marketing thing — a number that goes on a front door. The legal description of a condominium suite involves a legal level and a legal unit.

So what we did was call a meeting and tell everyone the following: Any and all communication regarding suites needs to include the legal level, legal unit, and suite number, and failure to use all three numbers means you will be liable for any mistakes. We then updated the drawings to reflect this nomenclature.

Building buildings requires some assholes.

My first boss used to tell me that development is the closest thing to being in the military. Never having been in the military, I can't say whether this is accurate or not, but it should give you an indication of what it can feel like to build. Sometimes skipping floors is just what you need to do. But if you can avoid it, it's one less thing you need to be an ass about.

Cover photo by Christian Lue on Unsplash

Erica Alini of The Globe and Mail just published this article called, "The era of the shoebox condo is over." You should read it, and not just because I'm quoted in it. One thing that I appreciate about the article is that it gets into some of the development economics underlying new projects.

The high-level math provided by Bryn Davidson of Lanefab (Vancouver) once again shows that land is the residual claimant in a pro forma and that the price developers can feasibly pay needs to be greater than the status-quo value. It's exactly what I was getting at in this recent post about the Impossible Toronto publication.

The other thing I'd like to highlight is the following chart showing the share of three-bedroom apartments in newly built condominiums and purpose-built rentals in the city:

What's interesting about this six-year period of completions is that there isn't a meaningful difference between condominiums and rentals. Average unit sizes as a whole tend to be slightly larger in rental projects, but in terms of the share of three-bedroom suites and the average size of those three-bedrooms, the differences aren't meaningful.

This suggests that it's less about investors "distorting" the market (see pundits talking about the condo market), and more about the fact that the demand isn't there. And the reason the demand isn't there is because these types of homes are expensive. If you can afford $5,000 per month in rent, you generally have some options.

Table from the Globe and Mail; cover photo by Lotus Design N Print on Unsplash

Back in the summer, I wrote about the publication Impossible Toronto that my friends Gabriel Fain, Francesco Valente-Gorjup, and Aleris Rodgers authored for the Neptis Foundation. (If you'd like to purchase a copy of the book, you can now do that online here.) And this past weekend, Alex Bozikovic of The Globe and Mail wrote about it in an article called, "A dense, urban Canada? It's possible."

Here's an excerpt:

The formula is simple: Replace century-old houses in the middle of the city with courtyard blocks – apartment buildings of four to six storeys, lined up side by side along the street and leaving a doughnut-hole of green. Their apartments have windows facing both the street and a green space at the centre of the block. Such buildings make up the fabric of many Western European cities.

Yet they are impossible to build in Canada for a variety of regulatory reasons. Most important: Our building codes require every apartment to have two separate exit stairs. If you eliminate that rule and follow the lead of Switzerland and Germany (two officious, safety-conscious states), everything changes. Buildings become much less bulky. Apartments gain light and fresh air in every room. Homes become more square, with better layouts and better rooms. This means a dramatic improvement in residents’ quality of life.

Alex is exactly right that required exiting is a major hindrance to the housing type proposed in Impossible Toronto. We talk a lot about this on the blog, and as an industry. But big picture, it is only one item in a long list of things that will need to change if we actually want to emulate the housing types that are typical of most Western European cities.

My contribution to Impossible Toronto was a handful of high-level development pro formas (pages 94-95). I was asked to model what is permissible today under the new "Expanding Housing Options in Neighbourhoods" (EHON) policies, and then model the Impossible Toronto typology. Finally, we decided to toggle this second pro forma to show what it would take to make it financially feasible, including removing things like development charges and site plan control.

It's important to point out that our current EHON permissions — which support as-of-right 6 storey apartments on all major streets — are already challenging to underwrite and have not yet been proven to work at scale. The starting problem is that developers need to be able to arrive at a residual land value that is greater than the as-is value of what's there today — usually that's a single-family home in the case of the EHON policies.

This can happen in two ways. Developers need to be able to get enough density to justify a higher land value and/or the development cost structure needs to be low enough that enough value can be attributed to the land. This is where things like single-stair buildings come into play. They allow for more efficient designs, which help with project viability on a few different dimensions.

Without a viable acquisition, housing projects do not start. So in my view, we need to attack this impossible problem from two sides. First, as-of-right densities need to translate into land values that are greater than the status quo. This is what will motivate landowners to sell. Second, the end result needs to be high-quality livable housing that as many people as possible can afford.

If we can achieve these two outcomes, then we have a chance to not only make the impossible, possible, but we have a chance to scale it across Toronto and Canada.

Cover photo by Aditya Chinchure on Unsplash