Earlier this month a team consisting of Benjamin Barber (who is author of If Mayors Ruled the World: Dysfunctional Nations, Rising Cities), Richard Florida (who is Director of the Martin Prosperity Institute here at the University of Toronto), and Don Tapscott (who is a leading authority on innovation) released a research report advocating for a global network of cities that they’re calling a “Global Parliament for Mayors.”
Here’s a snippet from the press release:
“Nation-states work together through multi-lateral agreements and global institutions in an effort to solve global problems. But states have limitations, and their cooperative efforts in our new era of interdependence and globalization are increasingly insufficient and even ineffective and outmoded,” say the three prominent researchers. A Global Parliament of Mayors represents a new type of governance network – one with enormous potential.
“Our proposed parliament would operate as a global urban network with a vibrant online community that collaborates on key issues 365 days a year,” they say. “Multi-stakeholder governance has come of age and is now fully independent from control by any government, or governmental organizations like the UN.”
And if you dive into their report, you’ll find the following 5 reasons for why they believe a Global Parliament for Mayors (GPM) makes sense:
Global migration to cities. Most people live in cities, so it makes sense to concentrate problem-solving capabilities there.
Urban predisposition for problem-solving. Cities are entrepreneurial, close to the people and richly connected to a wide variety of stakeholders. They have a history of cooperation and pragmatic problem-solving.
A need for experimentation with new governance models. Traditional models of state-based global governance have struggled to advance effective solutions to many global problems, so there is an urgent need to experiment with new models. The GPM is the most promising.
Digital networks. Online collaboration technology makes it possible to operate a largely virtual parliament that would not only be more cost-effective, but more transparent, inclusive and productive.
Digital citizens. There is a large, educated and motivated population of digital citizens that could be tapped to improve urban governance.
In principle, I agree with the direction. And I feel that way because of the two major shifts outlined above: More people are living in cities (a trend that all urbanists talk about ad nauseam) and digital networks are having a disruptive effect on the way we run companies and live our lives.
I’ve talked before about how the internet is causing a decentralization of value creation (see Airbnb, YouTube, and so on) and so I think it only makes sense that our governance structures will inevitably go through a similar transformation.
The governance models that we are living with today were put in place during a time when the world was a different place. At one point, nation-states were the de facto way to effectively organize ourselves on a global stage – probably because there wasn’t any other reasonable alternative.
But today, we are connected and interdependent in entirely new ways. And so the opportunity in front of us is to create a governance structure that leverages the progress and innovation that’s happening in cities, everywhere.
If cities are our most important economic unit, then mayors are arguably some of our most important leaders. So it behooves us to figure out how to give them the frameworks and forums to best do their job.
Earlier this week I received a message from an undergraduate architecture student interested in moving into real estate development after school. That was his 10 year plan. And he had clearly read my blog post, “Transitioning from architecture to development.”
In his message, he asked me if there were any books I would recommend he read to improve his real estate and finance knowledge, and, if I could have a “redo”, if I would still do a M.Arch (Master of Architecture) or just go straight to the MBA?
After responding to his message, I thought: “This would make a good blog post, as well as an opportunity to talk about the current state of real estate education in Canada.” So here goes.
If you’re looking for a good real estate book to get you started, I recommend checking out “Real Estate Finance and Investments: Risks and Opportunities" by Peter Linneman. It’s a much easier read and way more casual compared to most textbooks. When I was in grad school, people referred to this book as the "blue bible.” The cover on the previous edition was less purple and more blue. Unfortunately, he has also changed his glasses since the photo below.
To his second question, if I were to do it all over again, I wouldn’t change a thing about my education. I loved architecture school and combining it with business school classes and a real estate concentration was the best thing for me. I never wanted to be just a “numbers guy”, but I also never wanted to be a fanciful artist type who didn’t know how to build and manage a pro forma.
Now, let’s talk about real estate education in Canada.
I think we’re way behind. In the US, you can do a Master of Science in Real Estate Development, a Master of Real Estate Development, and all sorts of other real estate degrees. In Canada, you’re probably doing a MBA with a few elective real estate classes. Real estate is the largest asset class in the world. Does that not justify a dedicated degree?
Part of the reason for this, I think, is because real estate development is still very much an entrepreneur’s business–though it has become more institutionalized in recent years. Because of this, people get into development from a variety of different professions. They just need that entrepreneurial hutzpah. And that’s all fine, but I still think that the profession, the economy and our cities would benefit from University trained developers.
So if you’re reading this University of Toronto, I think–and I’ve thought this for awhile now–that The John H. Daniels Faculty of Architecture, Landscape and Design and The Rotman School of Management should get together and collectively form a real estate program. Who’s with me?
Yesterday evening I moderated a panel on innovation in real estate at the Rotman School. The panelists included Subhi Alsayed (Innovation Manager at Tridel); Michael Lio (President of buildABILITY Corporation); Alison Minato (VP of Sustainability at The Minto Group); and Tad Putyra (President and COO, Low Rise Development at Great Gulf).
Though the general consensus was that the real estate industry is terrible at innovation, it was comforting to hear that a number of both low-rise and high-rise developers are working on and/or towards building “net zero” homes. A net zero home is a home with no net energy consumption. What this means is that the home produces as much as energy as it consumes.
The general strategy with these homes is to design the building so that it’s as energy efficient as possible (as in R-40 walls and triple-pane glazing) and then use renewable energy sources (such as solar) to fulfill any remaining energy needs. Of course, the next step would be homes that actually produce more energy than they consume so that they become net contributors to a city’s energy grid. But let’s not put the cart before the horse.
There are a number of challenges to achieving this goal—one of which is on the consumer side. Many of the panelists mentioned that consumers simply don’t care enough about building performance and energy efficiency. Instead of worrying about air tightness, they’re worried about cosmetic things, like granite countertops and hardwood floors. That’s not to say that these pieces aren’t important, but they’re only one aspect of a home.
So what’s the solution? Do developers and home builders need to get better at consumer education? Or should utility companies be the ones shouldering this responsibility? After all, improving energy performance means lower utility costs.
One thought that came to mind (and I’m testing this for the first time with the Architect This City community), is that maybe homes need to become more of a product. Today, developers often market projects and communities ahead of themselves. But maybe that’s not the best way to drive innovation within the real estate industry.
For example, think about how car brands segment the market. When you buy a Mercedes, you expect a certain level of performance and quality. You probably don’t know about every little technological innovation in the car, but you assume that they’re pretty damn good.
With a new home on the other hand, you’re buying (insert generic name) on the Park or the Residences of (something regal sounding). The developer’s brand is secondary. And maybe that’s the wrong approach. Maybe it’s making consumers believe that the only thing that matters is whether you’re getting stainless steel appliances and granite countertops.
Maybe consumers need to know whether or not they’re buying from the Mercedes developer or from the Ford Pinto developer. After all, consumers make decisions based on heuristics. They need to be able to say to themselves:
"This home is $50,000 more, but it’s from the Mercedes developer so I can justify it. I’ll have less problems in the future, I’m sure."
Instead, consumers are saying to themselves:
"This home is $50,000 more. Why is that? They both have stainless steel appliances and granite countertops. I’ll just go for the cheaper one."
I refuse to believe that the real estate industry can’t be as innovative as other industries. There’s always a way. We just need to figure it out.
What are your thoughts?