Today I was at the Land & Development Conference here in Toronto. I started live tweeting during the breakfast, but my vintage iPhone 6 couldn’t keep up, so I had to stop. Some insights throughout the day. But a lot of what you would expect. I suppose it’s more about the networking.
I would, however, like to reiterate something that Ken Greenberg mentioned about Employment Areas/Lands in Toronto. For those of you who aren’t familiar, these lands are essentially intended to serve one, and only one, purpose: employment. And the process for introducing a mix of uses, including residential, is an onerous one to say the least.
I appreciate why this is the case. But I agree with Greenberg in that this kind of single use zoning is antiquated. It does not reflect the realities of the market today. There are other mechanisms we can use to maintain and provide for employment, and ensure that we don’t end up with a city of all residential.
Dylan Reid recently wrote an interesting article about, what he calls, high low-rise infill buildings along Toronto’s main streets.
He describes the typology in this way: “These are generally 4-storey mixed-use buildings built quickly on one or two lots, replacing smaller previous buildings. They are often inserted beside existing, attached buildings.“
Now, Reid acknowledges that this a challenging scale to develop at. He links to one of my articles in Urban Capital’s Site Magazine where I talk about exactly that: the diseconomies of scale associated with building small. (Though, I was talking about mid-rise, not high low-rise.)
Reid addresses these challenges with a number of potential cost savings, including no parking minimums and no rezoning process. He also suggests that these projects may be better suited to existing landowners (who may own the land free and clear of a mortgage).
Getting rid of parking minimums and streamlining approvals would certainly help, though I remain doubtful about overall feasibility. But what I wanted to comment on today was the last point about these projects being better suited to existing landowners.
Today I was at the Land & Development Conference here in Toronto. I started live tweeting during the breakfast, but my vintage iPhone 6 couldn’t keep up, so I had to stop. Some insights throughout the day. But a lot of what you would expect. I suppose it’s more about the networking.
I would, however, like to reiterate something that Ken Greenberg mentioned about Employment Areas/Lands in Toronto. For those of you who aren’t familiar, these lands are essentially intended to serve one, and only one, purpose: employment. And the process for introducing a mix of uses, including residential, is an onerous one to say the least.
I appreciate why this is the case. But I agree with Greenberg in that this kind of single use zoning is antiquated. It does not reflect the realities of the market today. There are other mechanisms we can use to maintain and provide for employment, and ensure that we don’t end up with a city of all residential.
Dylan Reid recently wrote an interesting article about, what he calls, high low-rise infill buildings along Toronto’s main streets.
He describes the typology in this way: “These are generally 4-storey mixed-use buildings built quickly on one or two lots, replacing smaller previous buildings. They are often inserted beside existing, attached buildings.“
Now, Reid acknowledges that this a challenging scale to develop at. He links to one of my articles in Urban Capital’s Site Magazine where I talk about exactly that: the diseconomies of scale associated with building small. (Though, I was talking about mid-rise, not high low-rise.)
Reid addresses these challenges with a number of potential cost savings, including no parking minimums and no rezoning process. He also suggests that these projects may be better suited to existing landowners (who may own the land free and clear of a mortgage).
Getting rid of parking minimums and streamlining approvals would certainly help, though I remain doubtful about overall feasibility. But what I wanted to comment on today was the last point about these projects being better suited to existing landowners.
Brandon Donnelly
Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly.
At the end of last year, Slate hosted a “pre-design community meeting” for the redevelopment of Corktown Plaza in Hamilton. It was the first time we hosted a meeting like this.
We learned things that evening and this May 24th we’ll be hosting our “pre-application community meeting.” See above for the full invite details. Lots of pre things.
At last year’s meeting we had no design. It was about learning. At this month’s meeting we will be presenting a design proposal for the site. So hopefully some of you will be able to make it out.
Regular scheduled programming will resume tomorrow on the blog.
One problem with this line of thinking is that if we’re talking about land on a street where greater densities such as mid-rise are also permissible, the land is going to get valued based on mid-rise and not high low-rise.
So when a prudent landowner thinks about developing their land, they may also consider the opportunity cost of simply selling their land based on its highest and best use.
That thought process might go something like this. I own a piece of land. If I were to sell this land today and take on no development risk, I could make $X. If I were to instead develop this land, I could make $Y.
If $Y is less than $X, then I’m obviously not going to develop. But if the spread between $Y and $X isn’t enough to compensate me for the risk of developing (and there’s lots of risk in developing), then I’m also not going to do it. (Developers run a similar test by marking the land cost in their pro forma to market.)
And if $X is based on greater densities than $Y ($X is based on mid-rise densities and $Y is based on high low-rise densities) and if $Y is also being challenged by further diseconomies of scale, then I’m sure you can start to see how the math may not pencil.
I say all of this not to shit on Reid’s article. It’s a good article. You should go read it. And we should all continue to think about ways to increase the supply of housing in this city and in others.
At the end of last year, Slate hosted a “pre-design community meeting” for the redevelopment of Corktown Plaza in Hamilton. It was the first time we hosted a meeting like this.
We learned things that evening and this May 24th we’ll be hosting our “pre-application community meeting.” See above for the full invite details. Lots of pre things.
At last year’s meeting we had no design. It was about learning. At this month’s meeting we will be presenting a design proposal for the site. So hopefully some of you will be able to make it out.
Regular scheduled programming will resume tomorrow on the blog.
One problem with this line of thinking is that if we’re talking about land on a street where greater densities such as mid-rise are also permissible, the land is going to get valued based on mid-rise and not high low-rise.
So when a prudent landowner thinks about developing their land, they may also consider the opportunity cost of simply selling their land based on its highest and best use.
That thought process might go something like this. I own a piece of land. If I were to sell this land today and take on no development risk, I could make $X. If I were to instead develop this land, I could make $Y.
If $Y is less than $X, then I’m obviously not going to develop. But if the spread between $Y and $X isn’t enough to compensate me for the risk of developing (and there’s lots of risk in developing), then I’m also not going to do it. (Developers run a similar test by marking the land cost in their pro forma to market.)
And if $X is based on greater densities than $Y ($X is based on mid-rise densities and $Y is based on high low-rise densities) and if $Y is also being challenged by further diseconomies of scale, then I’m sure you can start to see how the math may not pencil.
I say all of this not to shit on Reid’s article. It’s a good article. You should go read it. And we should all continue to think about ways to increase the supply of housing in this city and in others.
