Yikes. To be completely honest, I was not expecting this post and this post to blow up in the way that they did. But hey, here we are and here’s the blogTO article: “Developer shames City of Toronto into issuing permit for bold new skyscraper.” What all of this suggests is that most people are shocked by how long it takes and how difficult it is to build a building. I mean, what I wrote about is just one sliver among the countless other things that need to come together for it to happen. But to my mind, these are productive discussions to be having. Because the more everyone is aware, the more likely we are to improve things.
Category: Development
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We received our building permit!
As a follow-up to last week’s post about giving free land to the City of Toronto, I am now thrilled to report that, today at 12:14 PM, we received our building permit!
Some of you were keen to hear about what happened following the post. So here’s the update. I published the original post last Wednesday. And to be honest, it received far more attention than I was expecting.
On Thursday morning I received a call from the city. They weren’t thrilled about my post, but were very helpful and said that they would ensure the conveyance happened immediately. It then got done before noon that same day.
Planning then sent a note to buildings saying that the permit was ready for issuance. Yay. Buildings acknowledged that they were working on it, and on Monday of this week we received a summary of the outstanding fees and the instructions for the wire transfer.
We paid the fees immediately and on Tuesday we received a payment receipt from the city. Then today — Wednesday — we received the building permit. So it was exactly one week from post to permit. A big thanks to everyone who helped to finally move this forward.
Hopefully it’s clear that last week’s post came strictly from a place of prolonged frustration. I wasn’t trying to be mean. Our lawyer reminded me, after the post, that we’ve actually been working on this land conveyance for over 2 years.
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Building new cities
On this blog, we often talk about city building in the context of doing things to help improve a city — whether that be a development project, a new public art mural, or an interesting local business. These interventions help to build a city. But even more specifically, the term has, for many, come to mean building up a city in a positive way.
But there is another way to think about city building. You can think of it in terms of building actual new cities. We’ve spoken about some of these before, namely this one in California and this odd one in Saudi Arabia. But apparently it is becoming more common. According to The Economist, the world is now building more new cities than it has in the last 80 or so years:
Egypt’s “New Administrative Capital” is part of a rush of city-building. Firms and governments are planning more settlements than at any time in the post-war period, with many already under construction. Ninety-one cities have been announced in the past decade, with 15 in the past year alone. In addition to its new capital in the north, Egypt is building five other cities, with plans for dozens more. India is considering eight urban hubs. Outside Baghdad, Iraq, workers have just broken ground on the first of five settlements.
In some cases, it is being done as a solution to urban congestion. If this city is too expensive and unaffordable, just create a new one. This appears to be part of the idea with the above city outside of San Francisco. Of course, new cities can also be created for ideological reasons, or for political purposes, which was the case with Brazil’s capital city, Brasilia.
Here, the idea was to move the federal capital away from the country’s populated southeast region to a more geographically neutral location in the middle of the country. It also turns out that seeding a new city with government institutions is a good way to get one of these started. Existing cities do, after all, benefit from network effects.
History points to characteristics shared by successful projects. State institutions can help anchor cities, as Brasília (in Brazil) and Chandigarh (in India) showed in the 20th century. Although both have had problems, people in Brazil and India are voting with their feet. Brasília’s population is growing at 1.2% a year, more than double the national average. Chandigarh, a state capital, is now India’s fourth-richest region on a per-person basis.
But putting money, ego, and ideology aside, when does it actually make sense to start a new city in lieu of just expanding (or addressing the problems in) the one(s) you’ve already got? Population size can’t be the only factor in determining whether a city is “full”, because Tokyo seems to do just fine as the largest metropolitan area in the world.
If it hasn’t already been done, I think this would make for an interesting research project. Until then, there’s this (paywalled) Economist article.
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Please sire, may I give you free land?
This is an aerial photo of the construction site at One Delisle:
Currently, we are on hold and waiting to pour a number of columns on the ground floor because the city has not yet issued our above-grade building permit. And the reason the city has not issued our above-grade building permit is because we have not yet conveyed our parkland dedication land to the city. Frustratingly though, we have been ready to convey this land for over a year! We simply need the city to allow us to give them this free land. To date, we have meticulously documented at least 3-pages of follow-ups and back-and-forth emails as we try our best to do this.
I’ve been doing this long enough that this isn’t surprising or unusual. But it remains deeply maddening. Younger people on the team can’t believe that this is par for the course. On top of this, the city continues to charge interest on the fees that are payable upon issuance of the first above-grade building permit. The result is an insane dynamic where the city can delay things as long as it wants and then charge us, and all other developers, interest on its own delays! I mean, is it any wonder that housing keeps getting more expensive in this city?
During the last mayoral election, some candidates were quick to promise that, if elected, the city itself would start building affordable housing. This, I’m sure, sounded good to most. Toronto needs more affordable homes. But for all of us involved in the building of buildings, it was frankly impossible to imagine. If the city takes this long to accept free land from developers, how could it possibly build anything?
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Angles and atria
Studio Libeskind has a recently completed project in Brooklyn that looks like it was designed by Studio Libeskind. It has angled facades and, judging by the comments on Dezeen, its design is polarizing. But it is an affordable housing project for seniors, and it does have a large atrium in the middle of it.
Atria are a bit of a unique feature in multi-family housing (at least in this part of the world). For better or for worse, the gold standard has become the double-loaded corridor. And that’s because it’s “efficient.” It helps you maximize the amount of rentable or saleable area to gross construction area.
Here in Toronto, a typical efficiency — calculated as the net saleable/rentable area divided by the gross construction area — would be somewhere between 75-80%. Though many factors can affect this percentage, such as the amount of amenity space in the building.
There is certainly the option of just building a less efficient building, but then it means you’ll likely need to increase the price of the homes to compensate for this loss in efficiency.
This is the trade-off that is often made with smaller suites. More and smaller suites usually translate into more corridor space (i.e. a lower overall efficiency). But it may make sense to do this if you think your smaller suites will generate more revenue on a per square foot basis.
Off the top of my head, I can only think of two residential building in Toronto with an atrium. And that’s 71 Front Street East in the St. Lawrence and “The Atrium” at 650 Queens Quay West. The latter is pretty neat inside. The last time I checked, it even had fake palms.
In the case of both The Atrium and Libeskind’s Brooklyn project, the atria result in single-loaded corridors. (I’m not sure how 71 Front was designed.) Here’s what Libeskind’s project looks like:
The obvious advantage of this condition is that you get natural light into the corridors, whereas with a typical double-loaded corridor you don’t. But again, the disadvantage of this design is that you only have apartments on one side, instead of both sides.
In this case, the thermal envelope of the building is the outside face of each corridor (atrium side). This means the corridors are interior or conditioned spaces.
Another option would be to create open-air corridors, like in this example from Montreal. This creates corridors exposed to the elements, but now you’ve reduced your overall energy consumption (less space to heat/cool) and you’ve created the possibility of double-aspect units.
Personally, I’m a fan of atria and courtyards in residential buildings. But for the reasons we just talked about, they’re not that common. My sense is that they’re far more common in commercial buildings. John Portman, for instance, made a name for himself designing and developing hotels around them.
What are your thoughts, though? Would you pay a premium to live in a residential building with a nice atrium? I bet some of you would if it meant an improved suite design, such as more windows and more natural light.
Photos: Hufton + Crow
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Homes per acre
I spent three years living in Philadelphia for grad school and one of the things that I appreciated the most was its walkability. I walked and took transit everywhere. Much of this has to do with the grid system that was laid out for the city in the 17th century. But there are also lots of more recent developments that help to reinforce this fabric.
CityLab, for example, just published this article on Penn’s Landing Square, which is a housing complex in Philadelphia’s Society Hill neighborhood. Built in 1970 and designed by Canadian-American architect Louis Sauer, the modernist complex occupies an entire 2.37-acre block and contains an assortment of 118 low-rise homes, many of which are connected through small interior laneways.
In addition to its handsome architecture, what is noteworthy about Penn’s Landing Square is that its site plan makes it quite a dense low-rise development. At 118 homes, this translates into just under 50 units per acre. CityLab estimates that this means the development holds about 174 people per acre (~412 people total), which would make it more dense than Stuyvesant Town in New York (~158 persons per acre).
However, this is based on the assumption that there are almost 3.5 people living in each of these homes. While generally large, I don’t know if this is the case. It would be higher than the average US household size. But regardless, from a unit per acre standpoint, it remains a great example of dense, family-oriented, and grade-related housing.
For fun, let’s compare this to a more intense form of infill development. Our Junction House project, for instance, contains 151 homes and sits on a 0.48-acre piece of land. This translates into about 315 units per acre. I don’t know off hand the average number of occupants per household, but I reckon that, given our larger average suite size, we should be on the higher end compared to most mid-rise condominiums. So I would say that we are probably 400+ people per acre.
It’s unfair to compare a single development to an entire neighborhood, such as Stuyvesant Town. Circulation and other open spaces will necessarily pull down your average density. But these individual development examples do speak for themselves. There are many parts of North America where you might find 1 home or a handful of homes per acre of land. At Penn’s Landing Square, this number is 50 units per acre. And at Junction House, it’s 315 units per acre.
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The US is building a lot of apartments right now
As of November 2023, it was estimated that there were 988,000 homes under construction in multi-family buildings containing 5 or more units. This is in comparison to 680,000 single-family homes, according to US Census data. (Looking at the below graph, it’s also interesting to see how the supply of single-family homes dropped off after the global financial crisis and multi-family apartments took off.)
All of this means that in 2024, the US is on track to complete more apartments than it has in many many decades. In fact, exactly similar to what we experienced here in Toronto, if you want to find a comparable multi-family supply number, you need to go as far back as the 1970s (see below). Of course, the US had fewer people back then, and so on a per capita basis, it was building more housing.
Still, all of this new supply is having an impact. Apartment List recently published its national rent report, over here. And overall, it found that:
Rent increases are currently being moderated by a robust construction pipeline expected to deliver a decades-high number of new apartment units in 2024.
More specifically, they found that the cities with the most supply are now seeing the largest rent declines:
Many of the steepest year-over-year declines remain concentrated in Sun Belt cities that are rapidly expanding their multifamily inventory, such as Austin (-7.4 percent year-over-year), Raleigh (-4.4 percent), and Orlando (-3.9 percent).
If you’re an apartment developer, this is not what you want to see. It means that increased competition is creating downward pressure on rents and that vacancy rates are probably rising. But if you’re someone looking to rent an apartment, this is exactly what you want to see. You want more affordable housing. And so, as a consequence, you want more homes to be built. Because when supply outstrips demand, this is what you get.
Charts: Apartment List
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Seoul’s infamous modernist megastructure
Seun Sangga is Seoul’s first mixed-use complex.
Constructed between 1967 and 1972, the elaborate structure sits atop a strip of land measuring 50 m x 1.2 km, which had been flatted during the Second World War as a way to contain the spread of fire in the event of an air raid and to act as an evacuation corridor.
It’s a modernist development that is very much of this period. It’s massive, complicated in section and, in many ways, completely disconnected from its surrounding urban context. Flanking the various buildings are elevated and covered walkways.
So it is perhaps not surprising that this development has followed a similar fate to many others of this era. While it was initially viewed as being quite modern and desirable — it was one of the first buildings in Seoul to have elevators — Seun Sangga was quick to start showing signs of decline.
In fact, by as early as the 1970s, the complex became known for its porn shops and a bunch of other informal economy-type activities.
It’s an interesting, though familiar, story.
If you’d like to learn more, I recommend you check out this episode of the Urbanist and this article from The Architectural Review. The photos in the article are good accompaniment to the audio-only Urbanist episode, so make sure you flip through them.
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Cost-plus price floor
Oftentimes, it feels like there is a perception that developers price new housing with the fattest of margins. Meaning, if only developers were less greedy, housing could be more affordable. But as we have spoken about many times before, real estate development is a competitive industry; therefore, projects happen on the margin.
Ordinarily, the prices you see are the result of a cost-plus pricing strategy. Developers figure out what it will cost to build and develop, they add on a margin that they think their investors will accept, and then they determine what sticker prices they need to make the project financially feasible.
I’ve been writing about this approach for many years, but today it’s even more obvious. According to Urbanation’s Q1-2024 condominium report, new unsold condominium inventory in the GTA is currently sitting at approximately 23,815 units. This is up 30% YoY and is equal to about 23 months of supply. Two years ago in Q1-2022, this number had reached an 18-quarter low of 8,726 units.
Developers are highly motivated to sell and move their projects forward. Time is a killer, especially today. So the logical explanation for this rising inventory is simply that they can’t sell it. Their cost-plus pricing doesn’t overlap with what most buyers in the market are willing to pay. Like I said, development happens on the margin.
In theory, there is always a price where buyers would be willing to transact. If I listed a beautiful condominium for $100k today, many people would want to buy it. Supply would quickly run out. The problem is that no developer can build for this. There is always a very real price floor and, right now, that floor doesn’t seem to be low enough for many buyers.
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Toronto’s Major Streets Study approved at Planning and Housing Committee
Back in March, we spoke about how Toronto wants to allow small-scale apartments on all of its major streets. Well today, this study — known as the Major Streets Study — passed at Planning and Housing Committee.
It still has to pass at Council. And the Committee did ask for city staff to look at certain amendments, such as reducing setbacks and increasing the maximum dwelling count from 30 to 60 suites. However, all signs point to this new policy being fully approved sometime in the coming months.
There’s still work to be done. For example, I don’t know why there even needs to be a maximum number of homes. Maybe one of you can explain it to me. We are already dictating the overall built form, so why not let people just build as many homes as possible.
It feels like we’re saying: “We desperately want more homes on our major streets, but you know, we don’t want the economies of scale to be too great. We’d rather see more, smaller projects. This way each home is more expensive to build!”
In any event, this is still meaningful progress. It is what so many urbanists have been clamoring for over the years; more homes in our low-rise neighborhoods. So I think it’s important that we recognize today as such. Nice work.
