Brandon Donnelly

Daily insights for city builders, delivered every morning at 6 AM ET. I’m Brandon Donnelly — a Toronto-based real estate developer and founder of Globizen. I’ve been writing here since 2013.

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  • The perfect city

    “This book is a love story of cities. It is so well observed — the places, the people, the history and what the future holds. Joe tells a very personal and beautifully written story direct from the front line. An absolute must read for everyone who cares about, and wants to understand, what makes cities and their citizens tick.” 

    – Dame Alison Nimmo, Chief Executive of the Crown Estate

    Joe Berridge, of Urban Strategies, has a new book coming out called, Perfect City: An Urban Fixer’s Global Search for Magic in the Modern Metropolis. Perfect may be the enemy of good (as they say), but Joe argues that all great cities have moments of perfection that we can learn from.

    I just preordered a copy. If you’re interested, you can do the same here.

  • Golden hour cranes

    I was out this past Saturday evening with my Fujifilm X-T3. I usually always have it on me when I’m traveling, but less so when I’m at home. It can be harder to be a “tourist” in your own city because things don’t stand out in the same way. And oftentimes it is that novelty which sparks the desire to take a photo. But that’s no excuse. So here are two photos that I took right before sunset from CityPlace, Toronto. The cranes you see in the first picture (mostly) belong to The Well.

  • How impactful will the new First-Time Home Buyer Incentive be?

    This week’s federal budget announced two measures that are intended to improve housing affordability.

    The first is a modification to the Home Buyers’ Plan. This is a plan that gives first-time home buyers the ability to do a tax-free withdrawal from their RRSP (it does, however, have to be repaid within 15 years). The withdrawal limit was increased from $25,000 to $35,000.

    The second measure, which is the one that got everyone’s attention, is the new First-Time Home Buyer Incentive. Through this program, CMHC will offer first-time home buyers (who have the minimum down payment required for an insured mortgage) the option of a “CMHC shared equity mortgage.”

    What this effectively means is that CMHC will give first-time buyers an interest-free contribution for 10% of the purchase price of a new home (5% in the case of a resale). There’s no interest, but it does need to be paid back at the time of a sale. The higher percentage for new build homes is intended to stimulate housing supply.

    It is still not clear whether CMHC will be expecting to participate in any increase (or decrease) in the value of the properties. But presumably, yes, since it’s called a “shared equity mortgage.” All of this is expected to come into force by the fall.

    Here’s an example of how this program is intended to work.

    If a first-time buyer purchases a new home for $400,000 with a 5% down payment, the insured mortgage amount would normally be $380,000. This is the highest loan-to-value you can get with CMHC mortgage loan insurance. With this new measure, the mortgage size would reduce to $340,000 and so the purchaser’s monthly debt service would drop accordingly, thereby helping with overall affordability.

    The caveat to all of this is that this incentive will only be available to first-time home buyers with a household income under $120,000, and the insured mortgage and incentive amount cannot be greater than 4x the participants’ annual household income.

    What this means is that this program really only touches the sub $500,000 market. And in highly desirable cities like Toronto and Vancouver, that market isn’t all that big.

  • Marketing to Hong Kong

    A reader of this blog, who is based in Hong Kong, recently emailed me these photos:

    They are of a direct mailer that he received in his mailbox for a project here in Toronto.

    He sent them to me because he thought it was an interesting example of how projects are marketed to residents of Hong Kong.

    I don’t know what most of the text means, but it is clear that Canada is a brand and that the Toronto Reference Library is an important landmark.

  • Forum on Future Cities: Urban Intelligence

    MIT Senseable City Lab and the World Economic Forum’s Global Future Council on Cities and Urbanization are hosting a conference next month on the impact that artificial intelligence is having on our cities. Here is a summary of the event:

    As AI (Artificial Intelligence) becomes ubiquitous, it transforms many aspects of the environment we live in. In cities, AI is opening up a new era of an endlessly reconfigurable environment. Empowered by robust computers and elegant algorithms that can handle massive data sets, cities can make more informed decisions and create feedback loops between humans and the urban environment. It is what we call the raise of UI (urban intelligence).

    The 2019 Forum on Future Cities, organized by MIT Senseable City Lab and the World Economic Forum’s Global Future Council on Cities and Urbanization, will focus on four aspects of the UI transformation: autonomous vehicles, ubiquitous data collection, advanced data analytics, and governing innovation. Panelists include mayors, academics, senior industry leaders and members of civil society to explore such topics from different points of view, highlighting the scientific and technological challenges, the critical collective decisions we as a society will have to make, and the exciting possibilities ahead.

    The forum takes place on April 12th in Cambridge, Massachusetts. And since it looks to deal with many of the topics that we talk about on this blog, I figured that some of you might be interested in attending. If so, you can register here.

  • New York’s “pied-à-terre tax” explained

    New York is close to implementing new “pied-à-terre tax.” If the bill passes, which the New York Times believes is likely, cities of a million or more people will be able to levy an additional property tax on non-primary residence homes worth $5 million or more. The additional tax would be based on the following sliding scale:

    So let’s say for argument sake that you own a pied-à-terre in New York City worth approximately $238 million. Based on the above, your additional tax would be $370,000 + [4% x ($238 million – ~$25 million)]. That’s almost $8.9 million. Most of the revenue from this tax is expected to come from this upper (and open-ended) valuation bracket.

    New York City estimates that the tax could bring in about $650 million annually. The state in turn believes it could then raise $9 billion in bonds. And the intent is that these additional funds could be used to fund things like transit and housing. I am curious how elastic the demand is for trophy real estate in New York.

    Another thing I noticed while reading up on this bill is that the New York State Senate has made it pretty easy to voice your opinion on proposed legislation. On the sidebar of every bill making its way through the system is a box that looks like this:

    This is probably the clearest engagement tool I have ever seen on a government website. Do you think something like this could work for new housing?

  • Cumulative electric vehicle sales around the world

    When I was shopping for a new car last year I gave serious thought to buying an electric vehicle. In fact, it is what I initially set out to do. But I couldn’t find a model that I liked and I didn’t feel like the charging infrastructure was in place for me to go on snowboarding trips to places like Quebec or Vermont. So I went with an ICE vehicle. But we all know it is only a matter of time before we hit that tipping point, which is why 100% of the parking spots at our Junction House project will be ready for an electric vehicle charging station.

    According to a recent briefing from the International Council on Clean Transportation (ICCT), there were 3.1 million electric passenger vehicles in use around the world at the end of 2017. Almost all of them (98%) were located in China, Europe, Japan, and the United States, and nearly half of them (44%) were located in just 25 cities. Shanghai leads the world (or at least it did at the end of 2017) with 162,000 cumulative sales since 2011. This represents 5% of all global electric vehicle sales during this time period.

    The footnote to this is that most of Shanghai’s electric vehicles are actually plug-in hybrid electric vehicles, whereas in the case of Beijing — which is second only to Shanghai in terms of cumulative sales — it is virtually all battery electric vehicles. Digging even deeper, if you look at the share of electric vehicles sales in each city, it becomes clear that, on a per capita basis, the real leader is actually Norway. Between 40-50% of all cars sold in Oslo and Bergen were electric in 2017.

    Here is a chart from the ICCT:

    What is clear from these leading cities is that there are supportive policies and incentives in place to accelerate the adoption of electric vehicles. The chicken-and-egg dilemma, which is what I ran into, is that you really need the installed charging capacity. The ICCT estimates that the top 25 electric vehicle markets have about 24x the available charging per capita compared to other cities. That certainly helps.

  • InfraScapes by Paolo Pettigiani

    I just discovered the work of Italian photographer, Paolo Pettigiani. He specializes in something called infrared photography, which is photography that captures the wavelengths of light that generally aren’t visible to us humans.

    Paolo shoots with a full spectrum Nikon D750. What this means is that the camera’s sensor is sensitive to, well, the full spectrum of light: UV, visible, and infrared. Using this photography technique, he has coined something he calls “InfraScapes.”

    Here are a few of his photos from Dubai (source):

    The reason these photos look the way that they do is because anything with chlorophyll — such as grass and trees — really reflects infrared light. The result is a generally muted landscape with pops of pink. Perhaps this could be used as a technique to visually evaluate the greenness of our cities.

    All photos by Paolo Pettigiani

  • 2019 Pritzker Architecture Prize Laureate: Arata Isozaki

    This week it was announced that Japanese architect Arata Isozaki has received the 2019 Pritzker Architecture Prize. The prize is generally viewed as architecture’s highest honor. (You also get $100,000.)

    He’s the 46th laureate and 8th Japanese architect to receive the honor. (As a side note, the only Canadian on the list is Canadian-born American architect Frank Gehry.)

    Here’s an excerpt from the announcement:

    Not only did he extend efforts to physically reconstruct his native hometown [after World War II] with buildings including Ōita Medical Hall (1959-60) and Annex (1970-1972 Ōita, Japan), and the Ōita Prefectural Library (1962-1966 Ōita, Japan, renamed Ōita Art Plaza in 1996), but also redefined mutual exchange between eastern and western societies, allowing Japanese vision to inform European and American design, particularly in the 1980s.

    His first international commission outside of Japan was the Museum of Contemporary Art in Los Angeles, which was completed in 1986. He was also one of the first Japanese architects to start working in the West at this time.

    For the full media release, click here.

  • The new American condo

    Every year since 1984, the National Association of Home Builders (in the United States) has commissioned a home with the goal of showcasing new trends and technologies in the industry. At the same time, it also serves as a kind of dream home. This is what one should aspire to achieve. The initiative is called the New American Home (TNAH).

    The first home was built in Houston by Village Builders. The architect was Booth/Hansen & Associates and the home was about 1,500 square feet. It cost $80,000. Last year the home was in Montverde, Florida and was about 10,690 square feet (6,676 square feet of air-conditioned space). Not surprisingly, these homes have grown over the decades.

    According to a recent New York Times opinion piece by Allison Arieff — called, The New ‘Dream Home’ Should be a Condo — the square footage of this New American Home has been steadily rising:

    This is, of course, reflective of what has been happening in the market as a whole. According to Arieff, the average size of a new U.S. home today is about 1,000 square feet larger than it was in 1973. The average space per human has increased from 507 to about 971 square feet. As our wealth has grown we have naturally become more consumptive.

    But as Arieff asks in her article:

    What if the next New American Home was a condo? And what if there was a new American dream, not of auto-dependent suburbia, but walkable urbanism?

    She then contrasts last year’s 10,000 square foot “Tuscan style” New American Home against this 6 unit urban infill condo project in Los Angeles, where the average home is about 1,800 square feet and the building in its entirety is around 11,000 square feet.

    Which one would you prefer?

    Charts: New York Times