One of the things I often hear people say to me is that “you can never go wrong with real estate.” And indeed, if you’re talking about Toronto real estate over the past decade, then yes, it was fairly difficult to go wrong.
But that’s not a universal truth - either here or elsewhere. Real estate is very much an imperfect market and it has always been prone to protracted market cycles.
Furthermore, if you’re in the wrong city or part of town, there could be absolutely no market for your property. Take this example from Business Week:
Helene Pearson’s belief in homeownership was shattered in Roseland, the mostly black Chicago neighborhood where President Obama got his start as a community organizer. Pearson, who bought her two-bedroom, red-brick bungalow on South Calumet Avenue for $160,000 in 2006 with a high-interest loan, put it on the market a year ago for $55,000—and didn’t attract a single offer. Her bank has agreed to take it back in exchange for canceling her remaining mortgage debt. “I was so excited to buy my first house right down the street from my mother, but they got me good,” says Pearson, a 35-year-old guidance counselor and mother of two girls. “This scarred me so badly that I never want to buy again.”
Here you have a case where the value of the property (whatever it may be - clearly it’s not even $55,000) is below the replacement cost. That is, the value is well below what it would cost to actually go out and build a similar property. When you have a scenario like this, it intuitively translates into very little new investment.
And this is the case in many places, which is why when I hear somebody say “that you can never go wrong with real estate”, I secretly cringe inside.
During TIFF is an awesome time to be in Toronto. The city is buzzing, the bars are open until 4am (that should be standard), and everybody is talking about films. I used to go to a lot more movies when I was younger, but that’s sort of fallen off in recent years. Thankfully, my good friend Meg was kind enough to invite me out last night. We saw Blood Ties, which I really enjoyed. It’s about a good cop and a bad brother.
Before the movie started we started talking about the history of TIFF and it’s impact on Toronto’s economy. Curious, I looked it up today and the estimated annual contribution in 2011 was approximately $170M (which appears to be comparable to Cannes). That’s pretty impressive given that, even though there’s technically programming all throughout the year, it’s really only an 11 day festival.
Next City published an interesting article this morning on the politics behind Rob Ford’s subway obsession. I encourage you to have a read if you’re interested in politics, transit and/or the increasing polarization of North American cities (core vs. suburbs). It’s called Canada’s Strangest Straphanger.
There are a number of great take-aways from the article, but I’d like to highlight one that I’m not sure many Torontonians realize: There’s currently no light rail (LRT) in the city. We have streetcars, of course. But no light rail. There’s a difference.
Here’s an exert from Next City:
“It is true that most people in Scarborough don’t want a light rail. They want a subway, and the reason they want it is that there is no light rail in Toronto,” says Jay Young, SSHRC postdoctoral fellow in the Department of History at McMaster University in Hamilton, Ontario. “We just have streetcars and subways and they think light rail is a streetcar, when actually it’s very close to a subway in terms of having its own right of way.”
This may seem like semantics, but it’s not. Again, one difference is that light rail has its own right of way and streetcars compete with vehicular traffic. The other significant difference is
One of the things I often hear people say to me is that “you can never go wrong with real estate.” And indeed, if you’re talking about Toronto real estate over the past decade, then yes, it was fairly difficult to go wrong.
But that’s not a universal truth - either here or elsewhere. Real estate is very much an imperfect market and it has always been prone to protracted market cycles.
Furthermore, if you’re in the wrong city or part of town, there could be absolutely no market for your property. Take this example from Business Week:
Helene Pearson’s belief in homeownership was shattered in Roseland, the mostly black Chicago neighborhood where President Obama got his start as a community organizer. Pearson, who bought her two-bedroom, red-brick bungalow on South Calumet Avenue for $160,000 in 2006 with a high-interest loan, put it on the market a year ago for $55,000—and didn’t attract a single offer. Her bank has agreed to take it back in exchange for canceling her remaining mortgage debt. “I was so excited to buy my first house right down the street from my mother, but they got me good,” says Pearson, a 35-year-old guidance counselor and mother of two girls. “This scarred me so badly that I never want to buy again.”
Here you have a case where the value of the property (whatever it may be - clearly it’s not even $55,000) is below the replacement cost. That is, the value is well below what it would cost to actually go out and build a similar property. When you have a scenario like this, it intuitively translates into very little new investment.
And this is the case in many places, which is why when I hear somebody say “that you can never go wrong with real estate”, I secretly cringe inside.
During TIFF is an awesome time to be in Toronto. The city is buzzing, the bars are open until 4am (that should be standard), and everybody is talking about films. I used to go to a lot more movies when I was younger, but that’s sort of fallen off in recent years. Thankfully, my good friend Meg was kind enough to invite me out last night. We saw Blood Ties, which I really enjoyed. It’s about a good cop and a bad brother.
Before the movie started we started talking about the history of TIFF and it’s impact on Toronto’s economy. Curious, I looked it up today and the estimated annual contribution in 2011 was approximately $170M (which appears to be comparable to Cannes). That’s pretty impressive given that, even though there’s technically programming all throughout the year, it’s really only an 11 day festival.
Next City published an interesting article this morning on the politics behind Rob Ford’s subway obsession. I encourage you to have a read if you’re interested in politics, transit and/or the increasing polarization of North American cities (core vs. suburbs). It’s called Canada’s Strangest Straphanger.
There are a number of great take-aways from the article, but I’d like to highlight one that I’m not sure many Torontonians realize: There’s currently no light rail (LRT) in the city. We have streetcars, of course. But no light rail. There’s a difference.
Here’s an exert from Next City:
“It is true that most people in Scarborough don’t want a light rail. They want a subway, and the reason they want it is that there is no light rail in Toronto,” says Jay Young, SSHRC postdoctoral fellow in the Department of History at McMaster University in Hamilton, Ontario. “We just have streetcars and subways and they think light rail is a streetcar, when actually it’s very close to a subway in terms of having its own right of way.”
This may seem like semantics, but it’s not. Again, one difference is that light rail has its own right of way and streetcars compete with vehicular traffic. The other significant difference is
Brandon Donnelly
Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly.
I was also reminded of Roger Martin’s book the Opposable Mind, where he talks about the founding of the festival and the dichotomy the founders were faced with. He argues that, at the time (1970s), there were 2 predominate film festival models in place: the elitist jury driven Cannes model and the sort of grassroots model. The problem with the former was that it didn’t feel inclusive for festival goers and the problem with the latter was that it didn’t attract the buzz of say a Cannes.
The solution was to do both - basically make the audience the jury. The solution was a People’s Choice Award. This made festival goers feel like they had a say and were a part of the process, and it served as an effective buzz machine. There were also a bunch of other benefits, including the fact that the industry could now get a clear sense of a movie’s commercial appeal prior to going to market. More insular festivals couldn’t do this as well.
"The People’s Choice Award put the Toronto International Film Festival on the map. By 1999, Roger Ebert, America’s most influential film critic, was telling one reporter that "although Cannes is still larger, Toronto is more useful and more important." By 2005, TIFF had booked the largest volume of sales in film festival history, and film critic Liam Lacey named it "the most important film festival in the world - the largest, the most influential, the most inclusive.""
This is an incredible achievement and we’re lucky to have it in our city. Now let’s get out and create some more of the world’s best.
. Streetcars stops are spaced similar to bus stops, which let’s say averages around 250m. LRT stations on the other hand are often in the range of 400-600m. This makes them similar to subways.
It’s for this reason that even though the St Clair streetcar has its own right of way, I would not personally consider it a true LRT. As someone who lived in midtown for over 3 years, I can tell you that the stations are way too close together and that it’s highly inefficient during peak times - much like the rest of our streetcar network.
Given the constant debates going on this city about light rail vs. subways, I think it’s important that we’re clear on definitions. Light rail has the potential to be an effective (read: cheaper and faster) way of delivering rapid transit to a greater number of people in the city. Before we dismiss that proposition, let’s please understand what it is.
I was also reminded of Roger Martin’s book the Opposable Mind, where he talks about the founding of the festival and the dichotomy the founders were faced with. He argues that, at the time (1970s), there were 2 predominate film festival models in place: the elitist jury driven Cannes model and the sort of grassroots model. The problem with the former was that it didn’t feel inclusive for festival goers and the problem with the latter was that it didn’t attract the buzz of say a Cannes.
The solution was to do both - basically make the audience the jury. The solution was a People’s Choice Award. This made festival goers feel like they had a say and were a part of the process, and it served as an effective buzz machine. There were also a bunch of other benefits, including the fact that the industry could now get a clear sense of a movie’s commercial appeal prior to going to market. More insular festivals couldn’t do this as well.
"The People’s Choice Award put the Toronto International Film Festival on the map. By 1999, Roger Ebert, America’s most influential film critic, was telling one reporter that "although Cannes is still larger, Toronto is more useful and more important." By 2005, TIFF had booked the largest volume of sales in film festival history, and film critic Liam Lacey named it "the most important film festival in the world - the largest, the most influential, the most inclusive.""
This is an incredible achievement and we’re lucky to have it in our city. Now let’s get out and create some more of the world’s best.
. Streetcars stops are spaced similar to bus stops, which let’s say averages around 250m. LRT stations on the other hand are often in the range of 400-600m. This makes them similar to subways.
It’s for this reason that even though the St Clair streetcar has its own right of way, I would not personally consider it a true LRT. As someone who lived in midtown for over 3 years, I can tell you that the stations are way too close together and that it’s highly inefficient during peak times - much like the rest of our streetcar network.
Given the constant debates going on this city about light rail vs. subways, I think it’s important that we’re clear on definitions. Light rail has the potential to be an effective (read: cheaper and faster) way of delivering rapid transit to a greater number of people in the city. Before we dismiss that proposition, let’s please understand what it is.
