We all know what value engineering is when it comes to buildings. Generally speaking, it is the process of trying to identify high-cost items with relatively low perceived value. Once you identify these items, you then remove them (if you can), replace them with alternatives, or find other creative solutions. All projects have to do this at one point or another because, well, money doesn't grow on trees.
One way to think about this is in terms of the following four-quadrant chart:
Low-value and low-cost items aren't expensive, so you will probably just leave them alone. But if you can move them up to the next quadrant, that's even better.
High-value and low-cost items are the ideal place to be. One example might be a low-cost material that gets applied in a creative way so as to create high perceived value. This is where design really becomes alpha.
Low-value and high-cost items are the fertile ground for value engineering exercises. If the perceived value is low, why spend the money on it? Surely there must be other options.
High-value and high-cost items, on the other hand, require the most thought and debate. How high value is it? Do we really need or want to spend the money on it? One example of this would be the architectural facade lighting at One Delisle. Sadly, it was not free.
Years ago, the team presented it as a possible value-engineering option. But ultimately, we viewed it as being fundamental to the overall design. Its perceived value was off the charts. I mean, why invest so much in the architecture only to cut the very thing that helps prominently display it? So a decision was made to keep it and, boy, am I glad we did.
There's nothing else going up in Toronto like it.
Benjamin Couillard is a PhD candidate at the University of Toronto whose research looks at things like residential choice and housing supply. And in this recently published paper, he studies the causal effects of rising housing costs on fertility. Here's what he found when examining US Census Bureau data:
...rising [housing] costs since 1990 are responsible for 11% fewer children, 51% of the total fertility rate decline between the 2000s and 2010s, and 7 percentage points fewer young families in the 2010s. Policy counterfactuals indicate that a supply shift for large units generates 2.3 times more births than an equal-cost shift for small units. This analysis concludes that the supply of housing suitable for families can meaningfully contribute to demographic sustainability.
Intuitively, it makes sense that rational adults might consider where they would put a child if they had one, or had one more, and consider the cost of this incremental space. Housing is expensive in major urban centers. Perhaps it's no surprise that Canada, which is known for its broadly unaffordable housing, has fallen into the "ultra-low fertility" category.
But I think this fertility-housing relationship is an important one to call out when considering appropriate public policies. Housing is often viewed through the lens of what bad things will happen if we build it. That's why we do shadow studies, force stepbacks, charge development charges (impact fees), and the list goes on.
What is harder to grasp is what happens when we don't build new housing. Most — or at least many — seem to agree that not building enough housing hurts overall affordability. But what this study also demonstrates is that not building enough family-sized housing is bad for making babies!
This has all sorts of socio-economic repercussions, one of which is that a country now has to rely more heavily on immigration in order to offset a shrinking population base. It becomes a larger economic problem. When framed this way, it makes me wonder: why do we tax new family-sized homes the way we do?
An alternative approach to encourage more infill family housing might be to eliminate development charges, building permit fees, parkland fees, and as many other government fees as possible on all three-bedroom or larger homes. And the reason you would do this is because the economic and demographic cost of not building is even greater.
Based on the work of Couillard, we know at least one of the outcomes: more babies.
Cover photo by Lotus Design N Print on Unsplash
CoStar recently published an article titled “Architectural stars appear on the skyline of Canada's largest city — Toronto reaches a new level of global reach and ambition.”
What the article is talking about is a slew of iconic, under-construction projects designed by some of the world's most celebrated living architects. Namely, Forma by Frank Gehry (Los Angeles), One Delisle by Jeanne Gang (Chicago), KING Toronto by Bjarke Ingels (Copenhagen), as well as a handful of other noteworthy projects by some of the best local firms in Toronto.
It is no doubt an exciting moment. These are projects that, I think, the world will come to associate with our great city. They will strengthen the global brand of Toronto.
But let me also state the obvious: These projects are the result of a particular moment in time and a particular point in the last real estate cycle. They wouldn't exist today, irrespective of our level of ambition.
This is not to say that this calibre of project won't exist again in the future — it will. But for right now, these are special and differentiated architectural treasures that truly stand alone, showing us what is possible when we bet on the unknowable future.