Earlier this week the WSJ announced that Sidewalk Labs (Alphabet Inc.’s urban innovation organization) is close to a deal with Waterfront Toronto to develop a new 12-acre section of the eastern waterfront. Sidewalk Labs would be their innovation and funding partner. It’s not final yet and it’s still subject to board approval, but the sentiment is that it should go.
There aren’t a lot of details about the project – other than the fact that it will be fairly big, up to 3 million square feet – but the overall intent is digital city building. It’s about imagining what a city could be if you built it today “from the internet up.” More info about Sidewalk Labs, here.
I thought of this project as I read Seth Godin’s daily blog post this morning in bed. Here are two snippets from that post:
When a new technology arrives, it’s often the nerds and the neophiliacs who embrace it. People who see themselves as busy and important often dismiss the new medium or tool as a bit of a gimmick and then “go back to work.”
There’s never a guarantee that the next technology is going to be the one that moves to the center of the conversation. But it’s certain that a new technology will. It always has.
Openness matters.
I’m anxious to learn more details about the project, but this is obviously very exciting. It also creates momentum and strengthens the case for Amazon HQ2 in Toronto. The above 12-acre Quayside area is only the tip of the iceberg. There’s the rest of the eastern waterfront and also East Harbour.
Some people have been critical of this city’s push for Amazon HQ2. Anthony Lacavera, chairman of Globalive Capital, called this “the biggest Trojan Horse of all time.” His view is that Amazon would simply use HQ2 Toronto as a mechanism for cheaper labor (USD > CAD) and to siphon the best and brightest down to the US.
Now, I agree that it would be more impactful to create the next Amazon then to simply lure in its second headquarters. Big entrepreneurial successes are what fuel the darwinian evolution of startup hubs. The founders, early employees and investors make boatloads of money and then they start reinvesting that back into the ecosystem by, among other things, backing the next generation of entrepreneurs.
But does this necessarily mean that an Amazon HQ2 would be detrimental to Toronto by acting as a conduit to the US? Will it discourage entrepreneurship? Should we eschew all US firms out of fear that this may in fact happen? I don’t think so.
There’s tremendous value in concentrating smart people in one place – ideas build on ideas. And I don’t think technology has been able to disrupt that, at least not yet. One example of this is a theory that Paul Graham calls the Milanese Leonardo:
You can see how powerful cities are from something I wrote about earlier: the case of the Milanese Leonardo. Practically every fifteenth century Italian painter you’ve heard of was from Florence, even though Milan was just as big. People in Florence weren’t genetically different, so you have to assume there was someone born in Milan with as much natural ability as Leonardo. What happened to him?
And his reasoning is as follows:
Nothing is more powerful than a community of talented people working on related problems. Genes count for little by comparison: being a genetic Leonardo was not enough to compensate for having been born near Milan instead of Florence. Today we move around more, but great work still comes disproportionately from a few hotspots: the Bauhaus, the Manhattan Project, the New Yorker, Lockheed’s Skunk Works, Xerox Parc.
Xerox Parc (Palo Alto Research Company) is a great example of the kind of positive externalities that can happen as a result of smart people being in close proximity to each other while they wrestle with similar problems. It has been well documented that it was Steve Jobs’ visit to Xerox Parc that inspired many of Apple’s early innovations.
So my view: let’s increase Toronto’s urban metabolism and make it the Florence of 1450.
Ed Clark – who is leading the charge for HQ2 in Toronto – has been clear that large taxpayer subsidies are not on the table for Amazon. That would not be fair to the existing companies in this city. If that is what it is going to take, then we are not going to win. We will win based on our city, our human capital, and our openness to the rest of the world. That feels right.
Welcome Sidewalk Labs. Welcome Amazon. This city is open for business and to new ideas.
Image: Waterfront Toronto
Over the past few weeks Drake has been posting teasers on social media of his temporary condo in Toronto. It’s temporary because he’s waiting for his 35,000 square foot faux chateau to be completed in the Bridle Path. (See, some Millennials in Toronto are still able to break into the housing market.)
Here is one of those posts taken from Instagram:
“The term “bubble” refers to a substantial and sustained mispricing of an asset, the existence of which cannot be proved unless it bursts.” - UBS
Last week UBS released its 2017 Global Real Estate Bubble Index. At the top of the list was none other than Toronto, followed by Stockholm, Munich, Vancouver and Sydney. And at the bottom of the list was Chicago – a city that UBS feels is undervalued.
Here is the full list of index scores:
Earlier this week the WSJ announced that Sidewalk Labs (Alphabet Inc.’s urban innovation organization) is close to a deal with Waterfront Toronto to develop a new 12-acre section of the eastern waterfront. Sidewalk Labs would be their innovation and funding partner. It’s not final yet and it’s still subject to board approval, but the sentiment is that it should go.
There aren’t a lot of details about the project – other than the fact that it will be fairly big, up to 3 million square feet – but the overall intent is digital city building. It’s about imagining what a city could be if you built it today “from the internet up.” More info about Sidewalk Labs, here.
I thought of this project as I read Seth Godin’s daily blog post this morning in bed. Here are two snippets from that post:
When a new technology arrives, it’s often the nerds and the neophiliacs who embrace it. People who see themselves as busy and important often dismiss the new medium or tool as a bit of a gimmick and then “go back to work.”
There’s never a guarantee that the next technology is going to be the one that moves to the center of the conversation. But it’s certain that a new technology will. It always has.
Openness matters.
I’m anxious to learn more details about the project, but this is obviously very exciting. It also creates momentum and strengthens the case for Amazon HQ2 in Toronto. The above 12-acre Quayside area is only the tip of the iceberg. There’s the rest of the eastern waterfront and also East Harbour.
Some people have been critical of this city’s push for Amazon HQ2. Anthony Lacavera, chairman of Globalive Capital, called this “the biggest Trojan Horse of all time.” His view is that Amazon would simply use HQ2 Toronto as a mechanism for cheaper labor (USD > CAD) and to siphon the best and brightest down to the US.
Now, I agree that it would be more impactful to create the next Amazon then to simply lure in its second headquarters. Big entrepreneurial successes are what fuel the darwinian evolution of startup hubs. The founders, early employees and investors make boatloads of money and then they start reinvesting that back into the ecosystem by, among other things, backing the next generation of entrepreneurs.
But does this necessarily mean that an Amazon HQ2 would be detrimental to Toronto by acting as a conduit to the US? Will it discourage entrepreneurship? Should we eschew all US firms out of fear that this may in fact happen? I don’t think so.
There’s tremendous value in concentrating smart people in one place – ideas build on ideas. And I don’t think technology has been able to disrupt that, at least not yet. One example of this is a theory that Paul Graham calls the Milanese Leonardo:
You can see how powerful cities are from something I wrote about earlier: the case of the Milanese Leonardo. Practically every fifteenth century Italian painter you’ve heard of was from Florence, even though Milan was just as big. People in Florence weren’t genetically different, so you have to assume there was someone born in Milan with as much natural ability as Leonardo. What happened to him?
And his reasoning is as follows:
Nothing is more powerful than a community of talented people working on related problems. Genes count for little by comparison: being a genetic Leonardo was not enough to compensate for having been born near Milan instead of Florence. Today we move around more, but great work still comes disproportionately from a few hotspots: the Bauhaus, the Manhattan Project, the New Yorker, Lockheed’s Skunk Works, Xerox Parc.
Xerox Parc (Palo Alto Research Company) is a great example of the kind of positive externalities that can happen as a result of smart people being in close proximity to each other while they wrestle with similar problems. It has been well documented that it was Steve Jobs’ visit to Xerox Parc that inspired many of Apple’s early innovations.
So my view: let’s increase Toronto’s urban metabolism and make it the Florence of 1450.
Ed Clark – who is leading the charge for HQ2 in Toronto – has been clear that large taxpayer subsidies are not on the table for Amazon. That would not be fair to the existing companies in this city. If that is what it is going to take, then we are not going to win. We will win based on our city, our human capital, and our openness to the rest of the world. That feels right.
Welcome Sidewalk Labs. Welcome Amazon. This city is open for business and to new ideas.
Image: Waterfront Toronto
Over the past few weeks Drake has been posting teasers on social media of his temporary condo in Toronto. It’s temporary because he’s waiting for his 35,000 square foot faux chateau to be completed in the Bridle Path. (See, some Millennials in Toronto are still able to break into the housing market.)
Here is one of those posts taken from Instagram:
“The term “bubble” refers to a substantial and sustained mispricing of an asset, the existence of which cannot be proved unless it bursts.” - UBS
Last week UBS released its 2017 Global Real Estate Bubble Index. At the top of the list was none other than Toronto, followed by Stockholm, Munich, Vancouver and Sydney. And at the bottom of the list was Chicago – a city that UBS feels is undervalued.
Here is the full list of index scores:
A lot of fans have been wondering which condo building Drake has been teasing. I like Drake, but my interest was peaked more as an architecture and real estate nerd.
Given the position of the CN Tower in the above picture, it looks like the building is to the north and just slightly to the east. The other clues are the curtain wall system (SOTAWALL THERMO-3 series, I think) and the perimeter heating at the base of the windows. These are somewhat atypical details for a condo in Toronto. Also, if you look closely at the corner you’ll see that the south facade appears to slope outward.
So my guess: The Residences at the Ritz-Carlton, Toronto – designed by Kohn Pedersen Fox with Page + Steele as the local architect of record.
The UBS index is a weighted average of the following five sub-indices:
Price-to-income
Price-to-rent (fundamental valuation)
Change in mortgage-to-GDP ratio
Change in construction-to-GDP ratio (economic distortion)
Relative price-city-to-country indicator
If you look at their price-to-income benchmark in isolation, Toronto drops down to the middle of the pack along with Geneva and San Francisco. Hong Kong, London and Paris sit at the top with the most unaffordable housing.
Still, UBS credits “an overly loose monetary policy”, foreign demand, tight zoning, and rental market regulations for the eroding housing affordability in Toronto and Vancouver.
One of the challenges, of course, is that the capital flowing into real estate is not all local – it’s also global. And many cities around the world are seeing high price-to-income multiples, perhaps because of that.
So exactly how much decoupling from local fundamentals should now be considered reasonable in our globalized world? And to what extent is this a result of “superstar economics?”
Here’s an excerpt from the UBS report:
The economics of Superstars explains why, in some professions, show business for instance, “small numbers of people earn enormous amounts of money and dominate the activities in which they engage.” By analogous reasoning, prices in the most attractive cities are expected to outperform average cities or rural areas in the long run. Hong Kong, London and San Francisco are exemplars of this theory.
The intuition is that the national and global growth of high-wealth households creates continued excess demand for the best locations. So, as long as supply cannot increase rapidly, prices in the so-called “Superstar cities” are supposed to decouple from rents, incomes and the respective countrywide price level.
I guess this is one of the reasons why bubbles are proven after the fact. If you would like to download a copy of the full UBS report, click here.
A lot of fans have been wondering which condo building Drake has been teasing. I like Drake, but my interest was peaked more as an architecture and real estate nerd.
Given the position of the CN Tower in the above picture, it looks like the building is to the north and just slightly to the east. The other clues are the curtain wall system (SOTAWALL THERMO-3 series, I think) and the perimeter heating at the base of the windows. These are somewhat atypical details for a condo in Toronto. Also, if you look closely at the corner you’ll see that the south facade appears to slope outward.
So my guess: The Residences at the Ritz-Carlton, Toronto – designed by Kohn Pedersen Fox with Page + Steele as the local architect of record.
The UBS index is a weighted average of the following five sub-indices:
Price-to-income
Price-to-rent (fundamental valuation)
Change in mortgage-to-GDP ratio
Change in construction-to-GDP ratio (economic distortion)
Relative price-city-to-country indicator
If you look at their price-to-income benchmark in isolation, Toronto drops down to the middle of the pack along with Geneva and San Francisco. Hong Kong, London and Paris sit at the top with the most unaffordable housing.
Still, UBS credits “an overly loose monetary policy”, foreign demand, tight zoning, and rental market regulations for the eroding housing affordability in Toronto and Vancouver.
One of the challenges, of course, is that the capital flowing into real estate is not all local – it’s also global. And many cities around the world are seeing high price-to-income multiples, perhaps because of that.
So exactly how much decoupling from local fundamentals should now be considered reasonable in our globalized world? And to what extent is this a result of “superstar economics?”
Here’s an excerpt from the UBS report:
The economics of Superstars explains why, in some professions, show business for instance, “small numbers of people earn enormous amounts of money and dominate the activities in which they engage.” By analogous reasoning, prices in the most attractive cities are expected to outperform average cities or rural areas in the long run. Hong Kong, London and San Francisco are exemplars of this theory.
The intuition is that the national and global growth of high-wealth households creates continued excess demand for the best locations. So, as long as supply cannot increase rapidly, prices in the so-called “Superstar cities” are supposed to decouple from rents, incomes and the respective countrywide price level.
I guess this is one of the reasons why bubbles are proven after the fact. If you would like to download a copy of the full UBS report, click here.
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