Eric Jaffe, of Sidewalk Labs, recently wrote about an interesting research paper -- from the Journal of the American Planning Association -- that looked at the developer response to an inclusionary zoning policy change in London. The full research paper can be found over here.
The change was an expansion to existing mandatory IZ policies. Between 2005 and 2008, each of the 33 local authorities in Greater London reduced the minimum threshold for new housing projects. Previously it only applied to new developments with 15 or more units, but it was reduced to projects with 10 or more units. In other words, projects with a total of 10-14 units were now subject to IZ, whereas they were previously exempt.
These feel like small unit counts, but I guess it speaks to the scale of development happening in London. You generally need pretty high prices to make these kinds of boutique projects pencil out. By comparison, the IZ threshold here in Toronto is expected to be 100 or more units.
In any event, here's what happened in London:
Before the policy change developers were effectively building up to the 14 unit mark (to avoid IZ). Following that new supply dropped off. After the change, developers simply adjusted their project sizes and built more projects with less than 10 units.
Interestingly enough, the researchers found that there was generally no net loss of new homes during the study period (2004 to 2014); developers simply built more projects with lower unit counts. But more importantly, the team discovered that the policy change only kind of worked.
The increase in affordable housing was modest. The researchers uncovered a net increase of two affordable units per borough, per year, among projects within the 10-14 unit band. That's something. But London is a big place.
Of course, this is a response to a particular kind of policy change in a particular kind of market. Development is a local business and it's oftentimes hard to generalize. But it does speak to the fact that there are nuances, complexities, and market distortions to consider when it comes to land use policies.
Photo by Aaron Gilmore on Unsplash
In June of this year, Sidewalk Labs released its draft Master Innovation and Development Plan (MIDP) for Toronto's eastern waterfront. I wrote about it here. It was a draft document that was subject to further discussion and refinement, with October 31, 2019 being an important deadline for a lot of that to happen.
Some of the critical issues included project scope (just Quayside?), the possibility of a Waterfront LRT (needs to happen), data governance (who owns and manages the data that will be generated by this new smart city?) and, of course, land value. How much is Quayside worth?
A number of these key issues have now been "realigned," including the land value piece. Waterfront Toronto and Sidewalks Labs have agreed on a fair market value of $590 million (before accounting for any investments that will be required in order to achieve Waterfront Toronto's goals).
For a summary of the critical issues and what has been agreed to, click here. With these items now firmed up, Waterfront Toronto's board voted unanimously to proceed to the next phase. The next critical date is March 31, 2020, which is when the project will seek final approval. Mark your calendars.
Eric Jaffe, of Sidewalk Labs, recently wrote about an interesting research paper -- from the Journal of the American Planning Association -- that looked at the developer response to an inclusionary zoning policy change in London. The full research paper can be found over here.
The change was an expansion to existing mandatory IZ policies. Between 2005 and 2008, each of the 33 local authorities in Greater London reduced the minimum threshold for new housing projects. Previously it only applied to new developments with 15 or more units, but it was reduced to projects with 10 or more units. In other words, projects with a total of 10-14 units were now subject to IZ, whereas they were previously exempt.
These feel like small unit counts, but I guess it speaks to the scale of development happening in London. You generally need pretty high prices to make these kinds of boutique projects pencil out. By comparison, the IZ threshold here in Toronto is expected to be 100 or more units.
In any event, here's what happened in London:
Before the policy change developers were effectively building up to the 14 unit mark (to avoid IZ). Following that new supply dropped off. After the change, developers simply adjusted their project sizes and built more projects with less than 10 units.
Interestingly enough, the researchers found that there was generally no net loss of new homes during the study period (2004 to 2014); developers simply built more projects with lower unit counts. But more importantly, the team discovered that the policy change only kind of worked.
The increase in affordable housing was modest. The researchers uncovered a net increase of two affordable units per borough, per year, among projects within the 10-14 unit band. That's something. But London is a big place.
Of course, this is a response to a particular kind of policy change in a particular kind of market. Development is a local business and it's oftentimes hard to generalize. But it does speak to the fact that there are nuances, complexities, and market distortions to consider when it comes to land use policies.
Photo by Aaron Gilmore on Unsplash
In June of this year, Sidewalk Labs released its draft Master Innovation and Development Plan (MIDP) for Toronto's eastern waterfront. I wrote about it here. It was a draft document that was subject to further discussion and refinement, with October 31, 2019 being an important deadline for a lot of that to happen.
Some of the critical issues included project scope (just Quayside?), the possibility of a Waterfront LRT (needs to happen), data governance (who owns and manages the data that will be generated by this new smart city?) and, of course, land value. How much is Quayside worth?
A number of these key issues have now been "realigned," including the land value piece. Waterfront Toronto and Sidewalks Labs have agreed on a fair market value of $590 million (before accounting for any investments that will be required in order to achieve Waterfront Toronto's goals).
For a summary of the critical issues and what has been agreed to, click here. With these items now firmed up, Waterfront Toronto's board voted unanimously to proceed to the next phase. The next critical date is March 31, 2020, which is when the project will seek final approval. Mark your calendars.
Today I am going to talk about 3 things that recently happened and/or that are on my mind.
Sidewalk Labs pulled out of Toronto. I think this is sad. A lot of people have said that they're surprised, but not surprised. The official reason is that this unprecedented environment has made it financially infeasible for them to develop the 12-acre site, while still adhering to their core principles. I don't have any inside knowledge of the situation, but I can't help but think that this is probably just an opportune excuse. They were getting beat up pretty badly by Toronto on all fronts, even though they had put forward an incredibly ambitious development proposal. As I said before, I can't imagine many (or any) "conventional" developers coming forward with something like this. The last plan I saw was 1/3 non-residential, and 40% of the residential component was to be priced below market. And never mind all of the other innovations that were being contemplated.
In other tech news, Uber just led a $170 million investment in Lime (the micromobility scooter company). I think this is smart -- both from an overall mobility standpoint and, selfishly, as a shareowner of $UBER. It is being reported that this round of investment values Lime at about $510 million. This is a 79% decline from April 2019 when it raised its last round. So presumably, Uber is getting a pretty good deal here. The bet is that the urban landscape demands multi-modal transportation solutions, everything from bikes and scooters to cars and public transit. There is also an argument to be made that in the short-term, our post-pandemic world is going to gravitate toward individual mobility and away from things like public transit. I've heard a few people say that, as we re-open the global economy and try to maintain social distancing, we're going to face two major mobility bottlenecks: transit and elevators. Sounds like more testing would be a prudent idea.
Above, I was very careful to say "in the short-term" because I think the narrative that is emerging around the demise of urban density is entirely overblown. Few of us are clamoring to jump back into a mosh pit right now (perhaps a metaphorical mosh pit), but I also don't believe that we will suddenly look to sprawling Brasilia as a source of urban inspiration. While it is true that "disease did shape architecture in the 20th century" (Alex Bozikovic wrote a good piece on this over the weekend) and that there have been oscillations in terms of how we view urbanity, I also know that this isn't the first pandemic that our cities have lived through. The Hong Kong flu of 1968 is thought to have killed one million people around the world after, allegedly, emerging in one of the densest cities ever created. Hong Kong's relationship with Beijing is a tenuous one right now, but it still remains one of the world's most important global cities.
Perhaps cities are more resilient than we give them credit for.
Photo by Touann Gatouillat Vergos on Unsplash
Today I am going to talk about 3 things that recently happened and/or that are on my mind.
Sidewalk Labs pulled out of Toronto. I think this is sad. A lot of people have said that they're surprised, but not surprised. The official reason is that this unprecedented environment has made it financially infeasible for them to develop the 12-acre site, while still adhering to their core principles. I don't have any inside knowledge of the situation, but I can't help but think that this is probably just an opportune excuse. They were getting beat up pretty badly by Toronto on all fronts, even though they had put forward an incredibly ambitious development proposal. As I said before, I can't imagine many (or any) "conventional" developers coming forward with something like this. The last plan I saw was 1/3 non-residential, and 40% of the residential component was to be priced below market. And never mind all of the other innovations that were being contemplated.
In other tech news, Uber just led a $170 million investment in Lime (the micromobility scooter company). I think this is smart -- both from an overall mobility standpoint and, selfishly, as a shareowner of $UBER. It is being reported that this round of investment values Lime at about $510 million. This is a 79% decline from April 2019 when it raised its last round. So presumably, Uber is getting a pretty good deal here. The bet is that the urban landscape demands multi-modal transportation solutions, everything from bikes and scooters to cars and public transit. There is also an argument to be made that in the short-term, our post-pandemic world is going to gravitate toward individual mobility and away from things like public transit. I've heard a few people say that, as we re-open the global economy and try to maintain social distancing, we're going to face two major mobility bottlenecks: transit and elevators. Sounds like more testing would be a prudent idea.
Above, I was very careful to say "in the short-term" because I think the narrative that is emerging around the demise of urban density is entirely overblown. Few of us are clamoring to jump back into a mosh pit right now (perhaps a metaphorical mosh pit), but I also don't believe that we will suddenly look to sprawling Brasilia as a source of urban inspiration. While it is true that "disease did shape architecture in the 20th century" (Alex Bozikovic wrote a good piece on this over the weekend) and that there have been oscillations in terms of how we view urbanity, I also know that this isn't the first pandemic that our cities have lived through. The Hong Kong flu of 1968 is thought to have killed one million people around the world after, allegedly, emerging in one of the densest cities ever created. Hong Kong's relationship with Beijing is a tenuous one right now, but it still remains one of the world's most important global cities.
Perhaps cities are more resilient than we give them credit for.
Photo by Touann Gatouillat Vergos on Unsplash
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