So here's the thing. The whole reason we are all talking about how to build more sustainably is that there isn't often a quantifiable ROI for doing so. If building a net-zero building cost less than building a regular building, everybody would be building one. But that is not the case, which is why our industry, and others, are grappling with how to justify the added costs, even though we all know it's absolutely the right thing to do.

The questions we are asking ourselves look something like this: If I spend X% more on this build, what kind of rent premium could I command? And in some cases this premium is quantifiable and in some cases it matters a great deal. For instance, in the case of a new office building, you might need to spend the extra money so that you can attract the right tenants. While in other cases/asset classes, you might feel as if there's no rent premium and nobody will ever pay more.

But I like how Seth Godin thinks about it in this recent post: people never pay extra. If you're paying more for an electric car, for example, you aren't actually paying extra. What you are paying is a price that you feel is fair for what you are receiving. And what is it that you're receiving? Well, in this case, you're getting an electric car, but you're also buying in Seth's words, "sustainability, community awareness, cachet, status, safety, quiet, and the feeling of being an early adopter."

These things have value to some people. And as long as you can deliver on your promises, extra isn't extra at all. But perhaps more importantly, this early adoption can help encourage change. Electric cars are becoming cheaper and cheaper, and I think it's pretty clear that they will soon replace combustion engine vehicles. This model of starting at the top of the market and then moving down seems to have worked.

Now, the auto industry isn't perfectly comparable to the building industry. They have been good at improving productivity and bringing down costs, and we have been awful at it. Depending on how you measure it, construction productivity growth over the last half century is sitting somewhere between flat to some negative number. But I don't think this dubious achievement changes Seth's message. Think about what you're offering. Maybe extra isn't extra.

I love change.

In fact, a big part of what I do for a living is imagining what things could be in the future. However, the bias that humans have toward the status quo has been well documented by people like Seth Godin, as well as many others. It is easier to defend that which already exists. Here's how Seth puts it:

All one has to do is take the thing we have now as a given (ignoring its real costs) and then challenge the defects and question the benefits of the new thing, while also maximizing the potential risk.

So as I was reading this recent blogTO article about the work of Stephen Velasco, I wasn't surprised to see some of the responses. Stephen has built an outstanding 3D model of all the towers that are currently planned or under construction in Toronto. Here's what that looks like:

For some of you, this is exciting. And for others, this may look like too much density. In both cases, we might think we are being fair and reasonable in our assessment, but the reality is that it's actually quite difficult to be a neutral judge. We are all guilty of poor logic and too much emotion.

But here's a good mental exercise, put forward by Seth, to test your logic: flip the story and then see if you still feel the same way.

In this particular case, imagine that all of the above proposed buildings are already built. This is the city that we all live, work, and play in. This is the status quo. Now consider an exciting new proposal being put forward to demolish many/most of these buildings, create more surface parking lots in the core, industrialize our waterfront, and reduce our overall population density.

Photo from the 1940s:

Photo from the 1960s:

Is this a better proposal?

"Change makes us uncomfortable. Sunk costs are hard to ignore. Possibility comes with agency, and agency comes with risk." --Seth Godin

This is a quote from a recent blog post by Seth Godin talking about choice vs. convenience. His overarching argument is that we tend to go with convenience over choice when making decisions, and that means forgoing many/most of the options that we actually have available to us. Life inertia is a thing, which is why we often require big and meaningful events to shake us out of the conveniences of complacency.

I think that is one of the reasons why you're hearing talk of a "great resignation." This pandemic has shocked many people into thinking about whether or not they're truly happy doing what they're doing. And for many people, that has translated into going out and starting their own business. Fred Wilson recently argued that what we're living through right now isn't actually a great resignation, it's a great formation.

I have never been a huge fan of new year's resolutions for the simple fact that I don't think you should wait until the new year to do something you allegedly want to do today. If you want it, do it now. But there is no denying that this week is probably the slowest week of the year. And this slowness has a way of freeing up cognitive capacity. Perhaps it's just enough breathing room to encourage more choice over convenience. Whatever the choice may be.