Last week the Prime Minister of the UK, Rishi Sunak, announced a number of initiatives designed to support drivers. The slogan is "slamming the brakes on anti-motorist measures" and you can find more information about it, over here.
Naturally this is sparking the usual debate about driving vs. all the other forms of mobility. But it also seems to be part of some sort of broader political strategy intended to distance his party from things like environmental sustainability, net zero targets, and 15-minute city design.
If you're looking for a way to process the above announcement, this recent FT article by John Burn-Murdoch is an excellent place to start. Firstly, the UK (outside of London) is generally poorly served by public transport. This is an important thing to know. By the below measure -- percentage of large cities that have trams, a metro, or urban light rail -- it is even worse than the US:
In fact, one way to think about and measure mobility in the UK is to think in terms of the following geographic categories: there's US cities, European cities (including London), and then there's the rest of the UK. In the case of US cities, they have very clearly optimized around road infrastructure. Meaning, the vast majority of people don't take transit to work, but the area (km2) you can cover by car (in 30 mins) is high.
Look at Houston and Dallas on the left side of this graph:
On the other hand, European cities (again, including London) have optimized in the opposite direction. A lot more people walk, cycle, and take transit to work. In the case of cities like London, Paris, Barcelona, Bilbao, Prague, and others, the number is greater than 60%! However, they're sucky places to drive, as I learned this past summer. The area you can cover by car within 30 mins, is relatively low (bottom right of the above graph).
The challenge for British cities (excluding London), is that they seem to be right in the middle (burgundy dots above). Poor public transport (low percentage of trips to work). And poor road infrastructure (limited area accessible by car within 30 mins). So it is perhaps no surprise that Sunak is honing in on this issue. London is not representative of Britain. And based on the above data, the majority of people living in British cities are almost certainly mobility frustrated.
Of course, to correct this issue you have two options. You can move toward the left (in the above chart) and optimize for road infrastructure. Or you can move to the right and optimize for public transport and other forms of mobility. Based on last week's announcement, Sunak has chosen the left.
Charts: FT
I don't know for exactly how long, but for a very long time people have been trying to solve this real estate problem: "I have a desire to own a home, or multiple homes, around the world. However, I don't know how often I'd actually use it/them, and this desire is both expensive and a pain in the ass."
And so unless you have a lot of money and can make the pain in the ass part go away, there seems to exist an ongoing need to make fulfilling this desire both cheaper and easier. Perhaps the most common ways are through a timeshare property or through some kind of fractional ownership structure, where you own a share of a property.
Some companies are even "tokenizing" this second structure on blockchains. I have read about one company that is buying vacation homes and then issuing 365 corresponding tokens. Each token represents 1 day of occupancy (and actual title ownership apparently). In theory this sounds kind of neat, but you're also buying a second home with potentially 364 other strangers.
So here's another approach that I just learned about. The UK-based company, August, has devised a model that works like this:
August starts with "homeowner curation." Meaning, they start by vetting homeowners to make sure that they're not weird or something.
Once they have a suitable collection of homeowners, August sets up a new real estate entity that all of the homeowners must then fund equally.
This entity, by way of August, goes out and buys 5 properties, and each homeowner receives an equal share of the ownership. (Typically, they target 16-21 groups per entity.)
August renovates the 5 properties, gets them ready for occupancy, and then manages them on ongoing basis. This includes bookings.
Finally, each homeowner gets an average of 8-10 weeks per year across all of their homes.
In terms of the homes themselves, their pied-à-terre collection includes homes in Paris, Rome, Cannes, Barcelona, and London. They are typically between 70-100 square meters with 2 bedrooms and 1-2 bathrooms. And the average price/value is supposedly around €1,250,000 (post-renovation?), with the entry price of a share starting at €340,000.
I'm not sure if this share figure is based on 21 homeowners, but if it is, then that's €7,140,000 of equity being raised in order to buy somewhere around €6,250,000 of real estate. Is the spread their margin for setting this all up? There's also an annual fee per owner (€8,600), which presumably covers operating costs and the ongoing management of the properties.
A model like this naturally provokes a lot of questions. What happens if somebody wants to sell? Does the next buyer need to be similarly vetted for overall weirdness? And how liquid is 1/21st of a 5-property apartment portfolio? I don't know these answers, but intuitively these shares have got to be less liquid than a 100% sale.
However, as a solution to the problem of "I have a desire to own homes across Europe but I'm not quite rich enough to make it truly carefree", this seems like a pretty clever solution.
There is a common narrative that, when it comes time to start a family and have kids, you should probably consider moving to the suburbs. Sure, you'll have a painful commute, but you'll get more space for your money, and maybe you'll end up with better kids.
I don't know, obviously not everyone agrees with this. I certainly don't.
But it is something that commonly happens and, in many cities, it is now happening more often. Here is a map from the Centre for London showing the change in the proportion of households with at least one dependent child from 2001 to 2021:
Last week the Prime Minister of the UK, Rishi Sunak, announced a number of initiatives designed to support drivers. The slogan is "slamming the brakes on anti-motorist measures" and you can find more information about it, over here.
Naturally this is sparking the usual debate about driving vs. all the other forms of mobility. But it also seems to be part of some sort of broader political strategy intended to distance his party from things like environmental sustainability, net zero targets, and 15-minute city design.
If you're looking for a way to process the above announcement, this recent FT article by John Burn-Murdoch is an excellent place to start. Firstly, the UK (outside of London) is generally poorly served by public transport. This is an important thing to know. By the below measure -- percentage of large cities that have trams, a metro, or urban light rail -- it is even worse than the US:
In fact, one way to think about and measure mobility in the UK is to think in terms of the following geographic categories: there's US cities, European cities (including London), and then there's the rest of the UK. In the case of US cities, they have very clearly optimized around road infrastructure. Meaning, the vast majority of people don't take transit to work, but the area (km2) you can cover by car (in 30 mins) is high.
Look at Houston and Dallas on the left side of this graph:
On the other hand, European cities (again, including London) have optimized in the opposite direction. A lot more people walk, cycle, and take transit to work. In the case of cities like London, Paris, Barcelona, Bilbao, Prague, and others, the number is greater than 60%! However, they're sucky places to drive, as I learned this past summer. The area you can cover by car within 30 mins, is relatively low (bottom right of the above graph).
The challenge for British cities (excluding London), is that they seem to be right in the middle (burgundy dots above). Poor public transport (low percentage of trips to work). And poor road infrastructure (limited area accessible by car within 30 mins). So it is perhaps no surprise that Sunak is honing in on this issue. London is not representative of Britain. And based on the above data, the majority of people living in British cities are almost certainly mobility frustrated.
Of course, to correct this issue you have two options. You can move toward the left (in the above chart) and optimize for road infrastructure. Or you can move to the right and optimize for public transport and other forms of mobility. Based on last week's announcement, Sunak has chosen the left.
Charts: FT
I don't know for exactly how long, but for a very long time people have been trying to solve this real estate problem: "I have a desire to own a home, or multiple homes, around the world. However, I don't know how often I'd actually use it/them, and this desire is both expensive and a pain in the ass."
And so unless you have a lot of money and can make the pain in the ass part go away, there seems to exist an ongoing need to make fulfilling this desire both cheaper and easier. Perhaps the most common ways are through a timeshare property or through some kind of fractional ownership structure, where you own a share of a property.
Some companies are even "tokenizing" this second structure on blockchains. I have read about one company that is buying vacation homes and then issuing 365 corresponding tokens. Each token represents 1 day of occupancy (and actual title ownership apparently). In theory this sounds kind of neat, but you're also buying a second home with potentially 364 other strangers.
So here's another approach that I just learned about. The UK-based company, August, has devised a model that works like this:
August starts with "homeowner curation." Meaning, they start by vetting homeowners to make sure that they're not weird or something.
Once they have a suitable collection of homeowners, August sets up a new real estate entity that all of the homeowners must then fund equally.
This entity, by way of August, goes out and buys 5 properties, and each homeowner receives an equal share of the ownership. (Typically, they target 16-21 groups per entity.)
August renovates the 5 properties, gets them ready for occupancy, and then manages them on ongoing basis. This includes bookings.
Finally, each homeowner gets an average of 8-10 weeks per year across all of their homes.
In terms of the homes themselves, their pied-à-terre collection includes homes in Paris, Rome, Cannes, Barcelona, and London. They are typically between 70-100 square meters with 2 bedrooms and 1-2 bathrooms. And the average price/value is supposedly around €1,250,000 (post-renovation?), with the entry price of a share starting at €340,000.
I'm not sure if this share figure is based on 21 homeowners, but if it is, then that's €7,140,000 of equity being raised in order to buy somewhere around €6,250,000 of real estate. Is the spread their margin for setting this all up? There's also an annual fee per owner (€8,600), which presumably covers operating costs and the ongoing management of the properties.
A model like this naturally provokes a lot of questions. What happens if somebody wants to sell? Does the next buyer need to be similarly vetted for overall weirdness? And how liquid is 1/21st of a 5-property apartment portfolio? I don't know these answers, but intuitively these shares have got to be less liquid than a 100% sale.
However, as a solution to the problem of "I have a desire to own homes across Europe but I'm not quite rich enough to make it truly carefree", this seems like a pretty clever solution.
There is a common narrative that, when it comes time to start a family and have kids, you should probably consider moving to the suburbs. Sure, you'll have a painful commute, but you'll get more space for your money, and maybe you'll end up with better kids.
I don't know, obviously not everyone agrees with this. I certainly don't.
But it is something that commonly happens and, in many cities, it is now happening more often. Here is a map from the Centre for London showing the change in the proportion of households with at least one dependent child from 2001 to 2021:
A darker borough means that it lost households with at least one child. And a lighter borough means that it gained more kids. Why this is concerning is that it means the trendline is toward more, and not less, childless cities. Here's an excerpt from a recent FT article:
A future with dwindling numbers of children is one many cities, including San Francisco, Seattle and Washington DC, are grappling with. In Hong Kong, for every adult over 65 there are, to put it crudely, 0.7 children, and in Tokyo it is even fewer (0.5).
Of course, this is not a new phenomenon. And we know the main drivers:
Randal Cremer is one of several planned primary school closures and mergers in inner London triggered by low birth rates, families moving away because of expensive childcare, Brexit, and parents re-evaluating their lives during the pandemic. The biggest factor, says Riley, is that “housing is just becoming unaffordable”. Philip Glanville, mayor of Hackney, calls it “the acute affordability crisis”.
So how do we start to solve this? Here are a few ideas that we recently talked about on the blog, but it is by no means an exhaustive list. In my opinion, this is a problematic trend that deserves a lot more attention. Because cities are at their best when they work for everyone -- from the young to the old.
A darker borough means that it lost households with at least one child. And a lighter borough means that it gained more kids. Why this is concerning is that it means the trendline is toward more, and not less, childless cities. Here's an excerpt from a recent FT article:
A future with dwindling numbers of children is one many cities, including San Francisco, Seattle and Washington DC, are grappling with. In Hong Kong, for every adult over 65 there are, to put it crudely, 0.7 children, and in Tokyo it is even fewer (0.5).
Of course, this is not a new phenomenon. And we know the main drivers:
Randal Cremer is one of several planned primary school closures and mergers in inner London triggered by low birth rates, families moving away because of expensive childcare, Brexit, and parents re-evaluating their lives during the pandemic. The biggest factor, says Riley, is that “housing is just becoming unaffordable”. Philip Glanville, mayor of Hackney, calls it “the acute affordability crisis”.
So how do we start to solve this? Here are a few ideas that we recently talked about on the blog, but it is by no means an exhaustive list. In my opinion, this is a problematic trend that deserves a lot more attention. Because cities are at their best when they work for everyone -- from the young to the old.
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