Roughly 62% of respondents said “no”. And not surprisingly, the percentage of people who voted “no” increased as you moved outward towards the suburbs. But even the City of Vancouver itself sided slightly with “no” at 50.81%.
Since I’m not that plugged into the Vancouver scene, I’m not going to comment on this issue. But hopefully you all will in the comments below. I know that
Roughly 62% of respondents said “no”. And not surprisingly, the percentage of people who voted “no” increased as you moved outward towards the suburbs. But even the City of Vancouver itself sided slightly with “no” at 50.81%.
Since I’m not that plugged into the Vancouver scene, I’m not going to comment on this issue. But hopefully you all will in the comments below. I know that
a lot of you
are incredibly passionate about this.
Instead, I’d like to pose two questions.
Firstly, why is it that Asian transit operators seem to be so much better than North American transit operators at recovering their costs through fares? (Urban density and car ownership likely have something to do with it). And secondly, why hasn’t Hong Kong’s famous “rail plus property” transit model been exported to North America?
For those of you unfamiliar with Hong Kong’s Mass Transit Railway Corporation, here’s how much money they make (via The Atlantic from 2013):
The Mass Transit Railway (MTR) Corporation, which manages the subway and bus systems on Hong Kong Island and, since 2006, in the northern part of Kowloon, is considered the gold standard for transit management worldwide. In 2012, the MTR produced revenue of 36 billion Hong Kong Dollars (about U.S $5 billion)—turning a profit of $2 billion in the process. Most impressively, the farebox recovery ratio (the percentage of operational costs covered by fares) for the system was 185 percent, the world’s highest. Worldwide, these numbers are practically unheard of—the next highest urban ratio, Singapore, is a mere 125 percent.
In addition to Hong Kong, the MTR Corporation runs individual subway lines in Beijing, Hangzhou, and Shenzhen in China, two lines in the London Underground, and the entire Melbourne and Stockholm systems.
And here’s how they do it (also via The Atlantic):
Like no other system in the world, the MTR understands the monetary value of urban density—in other words, what economists call “agglomeration.” Hong Kong is one of the world’s densest cities, and businesses depend on the metro to ferry customers from one side of the territory to another. As a result, the MTR strikes a bargain with shop owners: In exchange for transporting customers, the transit agency receives a cut of the mall’s profit, signs a co-ownership agreement, or accepts a percentage of property development fees. In many cases, the MTR owns the entire mall itself. The Hong Kong metro essentially functions as part of a vertically integrated business that, through a "rail plus property” model, controls both the means of transit and the places passengers visit upon departure. Two of the tallest skyscrapers in Hong Kong are MTR properties, as are many of the offices, malls, and residences next to every transit station (some of which even have direct underground connections to the train). Not to mention, all of the retail within subway stations, which themselves double as large shopping complexes, is leased from MTR.
I believe that we could do this too. So hopefully we can have a great discussion about it in the comment section below.
Today I spent the day at the 11th Annual Land & Development Conference here in Toronto. I found it particularly good this year, but it’s now late, I’m tired, and I want to go watch game 6 of the NBA finals. So I think this is going to be a fairly short post.
Here’s a summary of some of my key takeaways from the day (a lot of it is Toronto-centric):
Increasingly, the commercial and residential sides of the real estate development business are converging. And it’s being largely driven by the focus on urban intensification and mixed-use.
This is leading to an “institutionalization” of the residential side, which has historically been the domain of smaller private/local companies and rich families.
Merger is creating complexity around asset valuations: Is it about the income (cap rates) and/or the future development potential?
Low rise house prices in Toronto continue to skyrocket. Supply is highly constrained. This has been the story for a number of years now.
High rise condo prices in Toronto continue to be more or less flat (modest increase). The industry is going to need to figure out how to work with and compliment the current surge in rental apartment development. There is an element of competition between the two asset classes.
According the RealNet’s new home price index, the spread between low-rise and high-rise housing in the Greater Toronto Area widened to $326,659 as of this past April (2015).
Rental Apartment Case Studies: Motion on Bay by Concert Properties (Bay and Dundas) was underwrote at $2.60-2.80 psf rents back in 2009. Rents are now in the $3 range. The Heathview by Morguard (Bathurst & St Clair) had $2.80-2.90 psf rents in its pro forma. It achieved and beat these numbers.
There’s a flood of Asian money coming into (1) Vancouver and then into (2) Toronto looking for development projects. There appears to be a lot of impatient and/or dumb capital out there. Challenge remains finding good development sites.
I will end by saying that I found there to be greater transparency at today’s conference. There was a lot of talk about deal specifics and I don’t remember seeing this much detail at past conferences.
Maybe I just wasn’t paying attention closely enough before or maybe the industry is slowly becoming more transparent. I hope it’s the latter.
If you were there today and I missed something groundbreaking, please share it in the comments below!
Firstly, why is it that Asian transit operators seem to be so much better than North American transit operators at recovering their costs through fares? (Urban density and car ownership likely have something to do with it). And secondly, why hasn’t Hong Kong’s famous “rail plus property” transit model been exported to North America?
For those of you unfamiliar with Hong Kong’s Mass Transit Railway Corporation, here’s how much money they make (via The Atlantic from 2013):
The Mass Transit Railway (MTR) Corporation, which manages the subway and bus systems on Hong Kong Island and, since 2006, in the northern part of Kowloon, is considered the gold standard for transit management worldwide. In 2012, the MTR produced revenue of 36 billion Hong Kong Dollars (about U.S $5 billion)—turning a profit of $2 billion in the process. Most impressively, the farebox recovery ratio (the percentage of operational costs covered by fares) for the system was 185 percent, the world’s highest. Worldwide, these numbers are practically unheard of—the next highest urban ratio, Singapore, is a mere 125 percent.
In addition to Hong Kong, the MTR Corporation runs individual subway lines in Beijing, Hangzhou, and Shenzhen in China, two lines in the London Underground, and the entire Melbourne and Stockholm systems.
And here’s how they do it (also via The Atlantic):
Like no other system in the world, the MTR understands the monetary value of urban density—in other words, what economists call “agglomeration.” Hong Kong is one of the world’s densest cities, and businesses depend on the metro to ferry customers from one side of the territory to another. As a result, the MTR strikes a bargain with shop owners: In exchange for transporting customers, the transit agency receives a cut of the mall’s profit, signs a co-ownership agreement, or accepts a percentage of property development fees. In many cases, the MTR owns the entire mall itself. The Hong Kong metro essentially functions as part of a vertically integrated business that, through a "rail plus property” model, controls both the means of transit and the places passengers visit upon departure. Two of the tallest skyscrapers in Hong Kong are MTR properties, as are many of the offices, malls, and residences next to every transit station (some of which even have direct underground connections to the train). Not to mention, all of the retail within subway stations, which themselves double as large shopping complexes, is leased from MTR.
I believe that we could do this too. So hopefully we can have a great discussion about it in the comment section below.
Today I spent the day at the 11th Annual Land & Development Conference here in Toronto. I found it particularly good this year, but it’s now late, I’m tired, and I want to go watch game 6 of the NBA finals. So I think this is going to be a fairly short post.
Here’s a summary of some of my key takeaways from the day (a lot of it is Toronto-centric):
Increasingly, the commercial and residential sides of the real estate development business are converging. And it’s being largely driven by the focus on urban intensification and mixed-use.
This is leading to an “institutionalization” of the residential side, which has historically been the domain of smaller private/local companies and rich families.
Merger is creating complexity around asset valuations: Is it about the income (cap rates) and/or the future development potential?
Low rise house prices in Toronto continue to skyrocket. Supply is highly constrained. This has been the story for a number of years now.
High rise condo prices in Toronto continue to be more or less flat (modest increase). The industry is going to need to figure out how to work with and compliment the current surge in rental apartment development. There is an element of competition between the two asset classes.
According the RealNet’s new home price index, the spread between low-rise and high-rise housing in the Greater Toronto Area widened to $326,659 as of this past April (2015).
Rental Apartment Case Studies: Motion on Bay by Concert Properties (Bay and Dundas) was underwrote at $2.60-2.80 psf rents back in 2009. Rents are now in the $3 range. The Heathview by Morguard (Bathurst & St Clair) had $2.80-2.90 psf rents in its pro forma. It achieved and beat these numbers.
There’s a flood of Asian money coming into (1) Vancouver and then into (2) Toronto looking for development projects. There appears to be a lot of impatient and/or dumb capital out there. Challenge remains finding good development sites.
I will end by saying that I found there to be greater transparency at today’s conference. There was a lot of talk about deal specifics and I don’t remember seeing this much detail at past conferences.
Maybe I just wasn’t paying attention closely enough before or maybe the industry is slowly becoming more transparent. I hope it’s the latter.
If you were there today and I missed something groundbreaking, please share it in the comments below!
We’ve been talking about a lot of heavy topics here on Architect This City lately. Everything from the contentious Gardiner Expressway East to minimum population densities to density creep.
So today I thought we could talk about something a bit more fun: architecture.
When I was in New York last weekend, one of the buildings that was on my must-see list was the now under construction West 57th Street by Danish architect Bjarke Ingels. See photo above. (It also happens to be at the exact location where the West Side Highway transitions from elevated to surface boulevard.)
This is supposedly the first North American project for Bjarke Ingels (he also has a project in Vancouver now). And if you’re a regular reader of this blog, you’ll know that I’m a fan of his work. His diagrams and storytelling ability were a big inspiration for me when I was in architecture school.
The concept behind the project was to create a new hybrid building typology, one that is a cross between the typical European perimeter block building and the North American skyscraper. And the result is pretty wild.
Here’s a video in case you aren’t familiar with the project. Click here if you can’t see it below.
I think it’s a really exciting project. What are your thoughts?
We’ve been talking about a lot of heavy topics here on Architect This City lately. Everything from the contentious Gardiner Expressway East to minimum population densities to density creep.
So today I thought we could talk about something a bit more fun: architecture.
When I was in New York last weekend, one of the buildings that was on my must-see list was the now under construction West 57th Street by Danish architect Bjarke Ingels. See photo above. (It also happens to be at the exact location where the West Side Highway transitions from elevated to surface boulevard.)
This is supposedly the first North American project for Bjarke Ingels (he also has a project in Vancouver now). And if you’re a regular reader of this blog, you’ll know that I’m a fan of his work. His diagrams and storytelling ability were a big inspiration for me when I was in architecture school.
The concept behind the project was to create a new hybrid building typology, one that is a cross between the typical European perimeter block building and the North American skyscraper. And the result is pretty wild.
Here’s a video in case you aren’t familiar with the project. Click here if you can’t see it below.
