This afternoon I walked the High Line with a friend of mine who seemed to know everything there is to know about new residential development in Manhattan.
She recently purchased a place and so she had done her homework. She was pointing out every building and telling me the price per square foot range; whether the floor plans were well designed (or if they had misproportioned rooms and awkwardly placed columns); and who the architect was.
Takeaway: To be competitive in the luxury segment in New York, you really need to have a name brand architect on the project. That seems to be the price of entry.
As she was telling me about the “competitively priced” building in the low $2,000′s psf and the expensive penthouse that recently sold for $7,000+ psf, I started to wonder about historical pricing in New York. How has it trended?
I also told her that you could buy a really great condo in Toronto for $700 psf. She laughed at how affordable that was. It’s all about your point of reference.
In any case, I found a research report from 2004 called: Why is Manhattan So Expensive? The story is one that you’ve heard before. It’s about the impact of land use restrictions on home prices. But it does also include some historical data on average condo prices.
In 1984, the median price per square for a condo in Manhattan was $359 psf. It peaked in 1987 at $505 psf and then dropped back down to the $300′s in the early 90′s. That was not a great time for real estate. However, by 2002, the median price had rebounded to $606 psf. All USD figures.
From 2002 onwards, Manhattan saw a dramatic increase in home prices. Below are two charts from Corcoran (Q3 2016 data) and Castle Avenue, respectively:
Toronto is obviously not New York, but’s interesting to consider that the average price of a downtown Toronto condo, today, is probably in the low $600′s psf. That’s in Canadian dollars and that’s pricing that New York saw decades ago.
It reminds me that “crazy pricing” can oftentimes be a psychological reaction to a pricing anchor that we previously set in our minds. It feels crazy. But is it?
Image: Me
Councillor Kristyn Wong-Tam recently put forward a request for a report on the implementation of a 1-year moratorium (let’s ”hit the pause button”) on new tall building rezoning applications in the downtown core of Toronto. You can read the full letter here.
Not surprisingly, the building industry doesn’t like this.
But besides that obvious point, I did want to draw attention to the following comment made by Quadrangle Architects partner, Richard Witt (taken from this BuzzBuzzNews article):
“The city has, for years, used the development charges that should have been used to upgrade infrastructure to artificially lower property taxes by putting the development charges into general revenue,” he says.
The intent of development charges is that they fund the infrastructure required as a result of new development – everything from transit to water. In the US, they are (I think) more commonly called impact fees. In this case the name makes the intent quite clear.
I am curious to what extent we are relying on development growth to fund the status quo. Because growth may not always be there. History has shown us that.
This morning on my way into the office I ran into a friend who lives in my building (downtown). She works in midtown and so I asked her how she gets into the office. She told me that she either takes the subway or an Uber, but that increasingly she has been taking Uber, particularly on the way home.
We then started talking costs and she told me that what she does is carpool with a friend from work using UberPOOL. They live nearby and so what they do is leave from the same place at night (the office) and then select a midpoint location between their homes for the drop-off. After splitting their portion of the fare, the ride costs her about $3.25.
As she was telling me this, I couldn’t help but think to myself: Wow, this is massively disruptive to transit. That is the same cost as taking the subway. So why take transit? With the subway, there may be a speed argument in certain instances, but that certainly wouldn’t be the case with some of Toronto’s streetcar lines (such as the King line). It’s faster to walk.
However, there are obviously geographic limits to how far you can go in an UberPOOL before your costs greatly exceed taking transit. But as Uber and other similar services continue to bring down the price of a ride (eventually the labor cost component will disappear), how big does that area get?
All of this – including my own mobility patterns – has got me thinking yet again about the role of transit in the city of tomorrow.
One segment that continues to be underserved is the regional scale. Here in the Greater Toronto Area, we are working on that by transforming our commuter rail service into a two-way all-day Regional Express Rail service. Today that strikes me as being hugely valuable. And unless driverless vehicles somehow solve our traffic problem, it will likely remain that way.
I would love to get your thoughts in the comments below.
This afternoon I walked the High Line with a friend of mine who seemed to know everything there is to know about new residential development in Manhattan.
She recently purchased a place and so she had done her homework. She was pointing out every building and telling me the price per square foot range; whether the floor plans were well designed (or if they had misproportioned rooms and awkwardly placed columns); and who the architect was.
Takeaway: To be competitive in the luxury segment in New York, you really need to have a name brand architect on the project. That seems to be the price of entry.
As she was telling me about the “competitively priced” building in the low $2,000′s psf and the expensive penthouse that recently sold for $7,000+ psf, I started to wonder about historical pricing in New York. How has it trended?
I also told her that you could buy a really great condo in Toronto for $700 psf. She laughed at how affordable that was. It’s all about your point of reference.
In any case, I found a research report from 2004 called: Why is Manhattan So Expensive? The story is one that you’ve heard before. It’s about the impact of land use restrictions on home prices. But it does also include some historical data on average condo prices.
In 1984, the median price per square for a condo in Manhattan was $359 psf. It peaked in 1987 at $505 psf and then dropped back down to the $300′s in the early 90′s. That was not a great time for real estate. However, by 2002, the median price had rebounded to $606 psf. All USD figures.
From 2002 onwards, Manhattan saw a dramatic increase in home prices. Below are two charts from Corcoran (Q3 2016 data) and Castle Avenue, respectively:
Toronto is obviously not New York, but’s interesting to consider that the average price of a downtown Toronto condo, today, is probably in the low $600′s psf. That’s in Canadian dollars and that’s pricing that New York saw decades ago.
It reminds me that “crazy pricing” can oftentimes be a psychological reaction to a pricing anchor that we previously set in our minds. It feels crazy. But is it?
Image: Me
Councillor Kristyn Wong-Tam recently put forward a request for a report on the implementation of a 1-year moratorium (let’s ”hit the pause button”) on new tall building rezoning applications in the downtown core of Toronto. You can read the full letter here.
Not surprisingly, the building industry doesn’t like this.
But besides that obvious point, I did want to draw attention to the following comment made by Quadrangle Architects partner, Richard Witt (taken from this BuzzBuzzNews article):
“The city has, for years, used the development charges that should have been used to upgrade infrastructure to artificially lower property taxes by putting the development charges into general revenue,” he says.
The intent of development charges is that they fund the infrastructure required as a result of new development – everything from transit to water. In the US, they are (I think) more commonly called impact fees. In this case the name makes the intent quite clear.
I am curious to what extent we are relying on development growth to fund the status quo. Because growth may not always be there. History has shown us that.
This morning on my way into the office I ran into a friend who lives in my building (downtown). She works in midtown and so I asked her how she gets into the office. She told me that she either takes the subway or an Uber, but that increasingly she has been taking Uber, particularly on the way home.
We then started talking costs and she told me that what she does is carpool with a friend from work using UberPOOL. They live nearby and so what they do is leave from the same place at night (the office) and then select a midpoint location between their homes for the drop-off. After splitting their portion of the fare, the ride costs her about $3.25.
As she was telling me this, I couldn’t help but think to myself: Wow, this is massively disruptive to transit. That is the same cost as taking the subway. So why take transit? With the subway, there may be a speed argument in certain instances, but that certainly wouldn’t be the case with some of Toronto’s streetcar lines (such as the King line). It’s faster to walk.
However, there are obviously geographic limits to how far you can go in an UberPOOL before your costs greatly exceed taking transit. But as Uber and other similar services continue to bring down the price of a ride (eventually the labor cost component will disappear), how big does that area get?
All of this – including my own mobility patterns – has got me thinking yet again about the role of transit in the city of tomorrow.
One segment that continues to be underserved is the regional scale. Here in the Greater Toronto Area, we are working on that by transforming our commuter rail service into a two-way all-day Regional Express Rail service. Today that strikes me as being hugely valuable. And unless driverless vehicles somehow solve our traffic problem, it will likely remain that way.
I would love to get your thoughts in the comments below.
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