Category: Housing

• Best innovative suite design

  

  Junction House won “Best Innovative Suite Design” at the 39th BILD Awards (2019) last night. A big congrats to the team. Below is the floor plan that won. It is a 2 bedroom suite from our two-storey House Collection (JH_2B_H1).

  

  This design is fundamental to Junction House. It is why the project is called what it is. The goal was to create a suite that felt less like a condo, and more like a low-rise single-family home. Credit to Superkul Architects, and the rest of the team, for figuring it all out. There was a long list of requirements.

  We wanted dedicated kitchen (+ island), dining, and living areas. (The living area is also wider than what you’d typically find.) We wanted a terrace with (standard) water and BBQ connections. We wanted the bedrooms upstairs for privacy/separation. We wanted both of them to have direct window exposure. And we wanted a master ensuite bathroom with a double vanity.

  The House Collection includes some of my favorite suites in the building, which is why — full disclosure — I’m going to be moving into one of them. If you’d like more information about Junction House, reach out to Paul Johnston and his team at info@junctionhouse.ca or at 416-900-6076.

  2019.05.04

• Climate gentrification is reshaping coastal cities

  Last year, Jesse Keenan, Thomas Hill, and Anurag Gumber of Harvard University, published a research paper called, Climate gentrification: from theory to empiricism in Miami-Dade County, Florida.

  What they were trying to uncover was a possible relationship between climate change and single-family home pricing in places, like Miami, that are vulnerable to sea level rise and flooding. This phenomenon is colloquially referred to as “climate gentrification.”

  One of the things that they uncovered through their work was, in fact, a positive correlation between the rate of price appreciation of single-family homes in Miami-Dade County and incremental measures of higher elevation. In other words: there’s value in higher ground.

  Recent reports (like this one from the WSJ) that Little Haiti in Miami is experiencing a surge in investment, seem to, at least partially, support this finding. Little Haiti sits about twice as high as Miami Beach, which is only about 4 feet above sea level.

  Here is a diagram from the WSJ showing the change in home prices since 2018:

  

  I’m not sure that this diagram necessarily reinforces the above finding. Mid-Beach in Miami Beach is shown as having an 8% gain, and yet it sits, like pretty much the rest of the Beach, within a 100-year floodplain. But already Miami is looking to manage the impacts of, “gentrification that is accelerated by climate change.”

  2019.04.29

• From urban to suburban

  The US Census Bureau just released its population estimates for 2018. As has been the case in previous years, the counties that added the most people (largest numeric growth) are all located in the south and west. Texas holds 4 out of the top 10 spots.

  Here is a Tweetstorm by Jed Kolko, the chief economist of Indeed, with a couple of graphs summarizing the findings (click through to see the full thread):

  TL:DR from today's 2018 Census local population estimates:
  
  Suburbanization marches on.
  
  Suburbs and mid-size metros grew fastest in 2018. Small rural uptick. Biggest metros shrank. Let's dig deeper. (thread) pic.twitter.com/d4GLPAoVfC

  — Jed Kolko (@JedKolko) April 18, 2019

  Despite the narrative that people are returning to cities and urban centers, the data is pretty clear: the flow of domestic migration within the US is largely from dense urban counties to more suburban — and affordable — ones. Big cities are expensive.

  2019.04.23

• How Japan increased its housing supply

  River Davis’ recent article in the Wall Street Journal about Tokyo’s generally flat home prices had me, again, wondering about demographics. I mean, aren’t their demographics working in reverse? They have an aging population, low immigration, and a low birthrate. But Tokyo, which represents about 11% of Japan’s total population, is still growing. And their home price index looks like this compared to San Francisco and New York:

  

  Davis’ argument, which of course has been made by others before, is that deregulation has allowed housing supply to actually keep up with demand. Land use policies were relaxed to allow taller and denser buildings to be built and some degree of decision making (I’m not sure how much) was moved to the central government in order to counteract the NIMBY problem that invariably attaches itself to local politics.

  The result is housing numbers that look and compare like this:

  In Tokyo last year, housing starts came in around 145,000, according to Japan’s land ministry. This figure is on par with the total number of new housing units authorized last year in New York, Los Angeles, Boston and Houston combined, based on the U.S. Census Bureau data. The same feat was achieved in 2017.

  If we are to normalize against New York, it looks like this:

  

  And the belief seems to be that it is working:

  “A reason why housing prices in Japan are not rising as fast as in New York, for example, is the large number of housing starts,” says Masahiro Kobayashi, a director general at the Japan Housing Finance Agency, a state-run entity which supports the housing market by purchasing home loans.

  One sentence that really stood out for me in the article is this one here: “Private consultants were given permission to issue building permits to speed up construction.” If any of you have tried to pull a building permit for a large project in Toronto, you’ll know that it can take a very long time (understatement). Maybe it is the same in your city. Should we be looking at this?

  Charts: WSJ

  2019.04.07

• How Opportunity Zones may have impacted real estate prices

  The Tax Cuts and Jobs Act of 2017 (US) created something known as Opportunity Zones. These are low-income and high-poverty census tracts that are designed to attract investment by offering a number of different tax benefits. I first wrote about it on the blog, here.

  Now that some time has passed since the final Opportunity Zones were announced, Zillow Economic Research decided to look at the possible impact of this designation on real estate values. In other words: To what extent, if at all, are the tax benefits getting capitalized into the value of the properties?

  Below is a chart showing the year-over-year change in the 12-month moving average sale price for low-income census tracts that were (1) eligible and selected as an Opportunity Zone; (2) eligible and not selected; and (3) not eligible.

  

  My understanding is that the “not eligible” category represents census tracts with similar characteristics to the other two categories but, for whatever reason, were not eligible to become an Opportunity Zone. There are criteria.

  The program is still quite new, but what Zillow found was that the eligible census tracts (green and yellow lines) seemed to exhibit similar sale price increases after the Act was signed, but before the final Opportunity Zones were announced. Once the final Zones were announced, sale prices in the selected category (green line) began to surge and move away from the pack.

  This may be evidence that the tax benefits are starting to get capitalized, or it may not be. One question I have is about why pricing in the selected Opportunity Zones seems to be a lot more volatile — even before the Act was announced.

  2019.04.05

• Tiny Tower in North Philadelphia

  

  ISA Architects recently completed a project in North Philadelphia called Tiny Tower.

  It is a 6-level, 1,250 square foot single family home built on a small 12′ x 29′ lot. That’s about the footprint of two parking spaces. It feels like a house you might find in Japan.

  Its siting is on a secondary street, akin to a laneway here in Toronto. As you can tell from the above picture, the adjacent parcels are largely undeveloped and/or used for parking.

  The height of the house is 38 feet and the section looks like this:

  

  The kitchen is in the basement (along with a light well). The living room is on the main floor (entrance to the house shown below). The third level is a workspace. And the rest of the floors are bedrooms. There’s also a rooftop patio. All of the circulation happens on one side of the house.

  

  I don’t consider 1,250 square feet to be a small house and so this post is not about that. “Tiny Tower” does, however, feel like an accurate name.

  I like these kinds of projects because they are about taking something with little perceived value — in this case a small parcel of land — and creating something cool.

  That’s how you create the most value. You have to discover and do things that most other people are overlooking.

  Images: ISA Architects

  2019.03.17

• Home and Away: DesignAgency and Bestor Architecture

  This past week I attended the “Home and Away” Lecture series at the Daniels Faculty of Architecture, Landscape, and Design. Matt Davis (of DesignAgency here in Toronto) was the home. And Barbara Bestor (of Bestor Architecture in Los Angeles) was the away.

  Both have completed some spectacular work. DesignAgency has really carved out a name for itself in the hospitality space with projects like the Broadview Hotel (Toronto) and the Generator hostel chain (global). And Bestor has completed a number of high profile corporate offices (Snapchat, Beats by Dre, Nasty Gal), as well as a home for Mike D (Beastie Boys) and some infill residential projects.

  The project I’d like to talk about today is her residential project known as Blackbirds. It is a cluster of 18 homes in Echo Park, Los Angeles, which are built into the site’s hilly topography and centered around a shared parking/open space.

  

  A few things are immediately interesting about this project. For one, I have been told that parking in Los Angeles is typically required to be covered. Here they managed not to do that and it allowed the center of the complex to become a more flexible communal space. The residents sometimes use it for dinners.

  Secondly, the overall masterplanning of the site was done in a way that makes it feel like an organic collection of 18 homes, as opposed to a linear stacking of row homes. Apparently, Bestor managed to still get the same number of homes on the site and it greatly improved their marketability.

  

  Lastly, I like how she plays with scale. Below is a section through three of the homes. But if you look at the roofline, you can see how it would appear as two homes from the street. These sorts of design techniques can be useful in striking the right balance between maximum density and a contextual design response.

  

  For more events by the Daniels Faculty, click here.

  Images: Bestor Architecture

  2019.03.09

• Implications of new housing supply

  

  There’s a lot of debate within urbanist circles about whether or not supply alone can solve or at least mitigate housing affordability concerns. Richard Florida and others will say that, while beneficial, increasing supply isn’t the be all end all. We need to be building affordable housing.

  Edward Glaeser, Joseph Gyourko, and others have, on the other hand, argued that middle-income housing is a supply problem and that low-income housing is quite simply a demand-side problem, which could be solved through things like a housing voucher program.

  In other words, the cost of housing isn’t necessarily the problem, it’s the low income levels. One of the benefits of supplementing people’s incomes is that it empowers mobility. People can then move to where there are jobs, as opposed to being tied to a specific neighborhood or city.

  But this debate is arguably just about the extent of the supply benefits. Intuitively, it makes sense to try and match new housing supply with demand and economic growth. But how far can that take us, particularly in high demand and high productivity cities?

  Glaeser (Harvard) and Gyourko (Penn) have a relatively recent paper out called, The Economic Implications of Housing Supply, which looks at, among other things, the “implicit tax” imposed on development as a result of land use restrictions and other supply constraints.

  Here are two excerpts:

  We will argue that the rise in housing wealth is concentrated in the major coastal markets that have high prices relative to minimum production costs, and it is concentrated among the richest members of the older cohorts—that is, on those who already owned homes several decades ago, before binding constraints on new housing construction were imposed.

  But in a democratic system where the rules for building and land use are largely determined by existing homeowners, development projects face a considerable disadvantage, especially since many of the potential beneficiaries of a new project do not have a place to live in the jurisdiction when possibilities for reducing regulation and expanding the supply of housing are debated.

  If you’re interested in this topic (and sufficiently nerdy), you can download a PDF copy of the paper here.

  Photo by chuttersnap on Unsplash

  2019.02.27

• Airbnb empire comes to an end in NYC

  At the beginning of this year, the City of New York filed this lawsuit in an attempt to shut down an Airbnb business that has supposedly generated around $20 million in revenue since 2012. It is currently illegal to rent out an apartment in most buildings in the city for less than 30 days unless the owner/permanent tenant is present. And that’s not how this business was being operated.

  Here are the locations of the rentals named in the lawsuit (map from the New York Times):

  

  The defendants include a real estate brokerage, the three partners behind the business (more on them here), as well as others. NYC has been trying to pass legislation that would force Airbnb to disclose more information to the Mayor’s Office of Special Enforcement. Information such as the full name(s) and address(es) of every host and whether the short-term rental is an entire dwelling or a room. That presumably would have helped here.

  For more on the lawsuit and the backstory, click here.

  You may also find it interesting to go back to the five-point plan that Airbnb put forward back in 2016. It was intended to serve as a framework for new short-term rental legislation. The points make a lot of sense.

  2019.02.23

• How to manipulate attention

  

  This Toronto Life article about a 32-year-old who has managed to buy 10 homes in the city is very Toronto Life. At a time where many young people are struggling to afford housing, here is a millennial who has bought 10 of them (albeit with some partners). The underlying message: You’re not working hard enough.

  I am fairly certain Toronto Life writes these sorts of articles because they know they’ll enrage people. As Facebook has taught us over the last few years, getting people pissed off is good for engagement. And engagement is what drives advertising-based businesses.

  Here is an excerpt from a recent Time article by Roger McNamee (a former Facebook advisor):

  One of the best ways to manipulate attention is to appeal to outrage and fear, emotions that increase engagement. Facebook’s algorithms give users what they want, so each person’s News Feed becomes a unique reality, a filter bubble that creates the illusion that most people the user knows believe the same things. Showing users only posts they agree with was good for Facebook’s bottom line, but some research showed it also increased polarization and, as we learned, harmed democracy.

  If you take a look at the Twitter conversations surrounding the above Toronto Life article, you’ll see the reactions you would expect: Troll article. Yeah, but how much debt has he taken on? He had help from wealthy friends. Here’s how a 32-year-old is eroding housing affordability in Toronto.

  I appreciate all of this, but I will never understand the need to shit on other people because of their successes, regardless of whether they are self-made or were born with a competitive advantage. Billionaire isn’t a bad word in my books. I am a first generation real estate developer, but I wouldn’t be at all upset if my great-grandparents had decided that buying land in Toronto was a good idea.

  Here is a guy that moved to Canada for University. Lived in a basement with cockroaches after leaving his first job after school. Took some risks. And saved his money instead of doing bottle service at the club on the weekends. I can respect that.

  But again, these sorts of articles are bound to make a lot of people cranky. And Toronto Life knows that.

  Photo by Tiago Rodrigues on Unsplash

  2019.02.09