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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  • Walkable archipelagos are emerging across the US

    We have spoken before about how walkable urban communities punch above their weight. In the US, only about 1.2% of land is, on average, designed and built for walkability. And yet, walkable neighborhoods in the top 35 metro areas account for about 19.1% of total US real GDP.

    At the same time, because walkable communities are a rarified commodity, they usually come at a premium. According to some sources, it’s to the tune of 30-40% when you look at home prices and rental rates. This again suggests that humans actually like and want this type of urbanism.

    Which is probably why there’s a growing interest in building more of it. Here’s a recent article from Bloomberg CityLab and here’s a photo of Culdesac’s new completely car-free community under construction in Tempe, Arizona (this doesn’t look like the Arizona I know):

    But in addition to just giving people more of what they want, there are also real economic benefits to stripping out parking and to overall more compact development. Charlotte-based Space Craft is another developer focused on car-light and transit-oriented apartments, and they have seemingly managed to make their projects more affordable as a result:

    “Our product offered lower rents to residents, $100 to $200 below our competitors, and was the best product in the market because we were able to reinvest some of the savings from parking,” said [Harrison] Tucker, who sees walkable urban neighborhoods becoming their own real estate investment class. “The economic case was just very strong.”

    This also flies in the face of the common argument that developers will always profit maximize and charge whatever the market will bear for their spaces. So why even bother trying to make it easier and cheaper to build? But this is not true! Lower development costs, as we see here, can and will translate into lower rents and higher quality buildings.

    I also agree with Tucker that we will see walkable urban neighborhoods, and their associated building typologies, become an important real estate asset class. For all of the reasons that we talk about on this blog, this is where our cities are headed.

    However, it’s going to take some time. I like the metaphor (mentioned in the above article) that, right now, we are creating “walkable archipelagos” or walkable islands in seas of cars. With the right connectivity (transit, micromobility, and so on), these islands can do just fine. But over time, I suspect we’ll see a lot more land reclamation. Good.

  • English-speaking countries don’t like apartments

    A lack of affordable housing certainly feels like a global phenomenon. Companies are trying to 3D-print homes for under $100k. Berlin froze apartment rents back in 2019 because things were getting too expensive. And today, Hong Kong is working on building some sort of “light public housing” in an effort to reduce its massive wait times for new homes.

    But depending on where you are in the world, it might be somewhat comforting to remember that this problem seems to be particularly pronounced, here, in English-speaking countries. Whether it’s restrictive zoning rules or a general distaste for apartments and urban density, the English-speaking world has fallen behind on housing supply compared to places like continental Europe.

    Here’s an excerpt from a recent FT article:

    Forty years ago, the UK, US, Canada, Australia, New Zealand and Ireland had roughly 400 homes per 1,000 residents, level with developed continental European countries. Since then the two groups have diverged, the Anglosphere standing still while western Europe has pulled clear to 560 per 1,000.

    And this shows in our home prices:

    One argument is that continental Europe is simply more culturally accepting of apartment buildings, and that allows more new homes to be built. Seems right:

    According to this chart, the average person from the UK or the US would not be happy unless they were living in a detached house. When you get to the continent, people start to become increasingly more positive around missing middle-type housing (something in the 3-4 storey range). Though, anything more than that and things get divided.

    All in all, it doesn’t seem to really matter where you’re from, there’s a clear preference for detached housing. But maybe liking apartments even a little bit is all you need to help with overall housing supply.

  • 3D-printed homes for under $99,000

    ICON, the 3D-printing home company that I wrote about a few months ago, has just launched a new global architecture competition called Initiative 99. As the name starts to suggest, the goal is to generate new ideas for “accessible, beautiful, and dignified 3D-printed homes that can be built for under US$99,000.”

    The competition is open to all: architects, designers, builders, students, and/or people who are just interested in finding new ways to deliver affordable housing. However, the current website does ask for a zip code. So maybe you need to live in the US.

    In any event, if you’re selected, you might get money and you might get to see your design built. The total prize fund for the competition is US$1 million and ICON has also committed to building a selection of the winning designs. Registration begins May 23, 2023, but if you’d like to enter your zip code now and “stay informed,” you can do that here.

  • Lufthansa unveils new multi-seat layout in business class

    Maybe it’s my design background or maybe it’s the extreme discomfort in my legs, but usually when I’m on a plane I can’t help but think about redesigning the cabin interior. Of course, there are only so many options in economy when your femur doesn’t fit between the seats. However, in business class, where airlines actually make their money, the options are endless.

    Below is a redesign that Lufthansa just launched this spring. Co-created with Pearson Lloyd, the concept is based on three distinct travel experiences: calm, focus, and share. The idea here is that maybe you just want to sleep (calm). Maybe you just want to work (focus). Or maybe you want to work and/or hang out with someone beside you (share). And depending on what you’re looking for, your seat should reflect that.

    The result is 7 different seat types that are bookable depending on what “job you’re looking to hire it for.”

    It is about consumer choice instead of one size fits all. But I’m curious:

    • Were they able to maintain the same number of overall seats in business class, or are they betting on higher revenue per passenger because the seats are now better?
    • How does booking work? What happens if I really want “calm,” but the only available seat is “share”? And then what happens if my “share” neighbor is really talkative?
    • Has anyone looked at multi-seat arrangements in economy? Or is it a non-starter because you really need to squeeze femurs in order to make the math work?

    Lufthansa, if you’re reading this and you’d like me to do a thorough review of your new Allegris Business Class seating, I would be happy to accept a flight to Paris sometime this summer. Until then, you can all find more information about this new seating layout and the design process, here.

    Images: Pearson Lloyd

  • The end of free money

    Tech analyst Benedict Evans — who has 175,000 subscribers to his weekly newsletter — has just published his big annual presentation about “what matters in tech?” This year’s is called “The New Gatekeepers.” And as is normally the case, he explores a number of macro trends that I think will interest many of you, even if you aren’t in or interested in the tech industry. To check it out, click here.

  • Will fourplexes be actually feasible in Toronto?

    Last week I wrote about Toronto’s plan to make fourplexes as-of-right across the city, but also why this form of missing middle housing shouldn’t have a maximum floor space index.

    Today, let’s look at the numbers in a bit more detail.

    If you look at a zoning map of Toronto, you’ll see that many neighborhoods across the city have a maximum floor space index (FSI) of 0.6. What this means is that if you have a piece of land like this:

    • Lot width: 20′
    • Lot depth: 115′
    • Site area: 2,300 sf

    Your total allowable gross floor area would be 1,380 square feet (0.6 x 2,300 sf).

    If you build a laneway suite in this city, that won’t count towards your total allowable GFA (otherwise they’d be very challenging/impossible to build). But if you want to build something like a triplex or a fourplex, it counts.

    The one important caveat is that if you’re building a residential building — that isn’t an apartment building with 5 or more homes — you can deduct the floor area of the basement:

    This, of course, helps the situation. But it doesn’t solve all of our problems.

    If you assume that the basement can be one home, that still only leaves 1,380 square feet for the other three, technically permissible, homes. This equals: 3 homes x 460 square feet.

    Another option would be 2 homes x 690 square feet. But still, we’re not exactly making it easy to deliver more “family-sized homes” in the city.

    And herein lies one of the problems (plural, because there are others). We can say that fourplexes are allowed across the city, but it may not actually be technically feasible or practical to build them.

    Note: I am not a planner. If you are, leave a comment below.

  • Honks against housing in San Diego’s University City

    The University area is one of 53 community planning areas in the City of San Diego. And this one, as the name suggests, houses the University of California, San Diego (UCSD), which is at the northern end of the blue transit line.

    The last time the University Community Plan was updated was in 1987, and so it’s an old plan and it is currently being redone to better align with the City’s current strategic plan — which includes things like “creating homes for all of us” and “championing sustainability.”

    The final draft community plan won’t be available until later this year, but there are two draft scenarios available for download. Here’s what Scenario A looks like:

    The “T” circles are transit stops on the Blue Line (which runs south to downtown and then to the Mexico border), the olive green areas are institutional (UCSD, hospital, etc.), and the purple areas are “urban villages” with densities that go as high as 218 dwelling units per acre (darkest purple). For the other areas, please refer to the legend.

    Now let’s put this residential density into some sort of context. One acre = 43,560 square feet. So we’re talking about 218 homes on every 43,560 square feet of land. For context, our mid-rise Junction House project is 151 homes and our site area is approximately 22,000 square feet (about 0.5 acres). That puts us at roughly 302 homes per acre — more than what is proposed here.

    In total the revised plan could allow for somewhere between 35,000 to 56,000 new homes in the University City area. Not surprisingly, the community has reacted by organizing rallies, such as this one, here, called “Honks against housing”:

    (I used a screenshot because embedded tweets don’t seem to show up properly in my email newsletter.)

    This is, again, not unexpected. And all of the typical things could be said about incumbent residents opposing new homes on top of an existing transit line, next to a major university. But what stands out to me about this protest is its format.

    These residents are worried that high-rises will destroy their community. So presumably they are looking to get the word out to as many people as possible. And one of the ways they have decided to do that is stand on the side of a busy road and appeal to people in their cars.

    Ironically, I think this actually reinforces the need for an updated Community Plan. Because it speaks to the car-oriented nature of this community and the need for better land use planning around its existing transit stations.

    In my view, the line of thinking here should not be, “this is going to destroy our community. How will our roads ever accommodate 35,000 new homes?” It should be, “how do we better plan this community so that our next generation of residents have the luxury not to have to drive everywhere?”

    If you’d like to offer constructive feedback on this plan, I’m told that you can email Nancy Graham at nhgraham@sandiego.gov.

  • Sleeper trains — what’s old is popular again

    One of the great promises of autonomous vehicles is that, one day in the future, you’ll be able to get into your car, fall asleep, and then wake up refreshed at your destination. This would be a nice luxury, and it would almost certainly reshape the geography of our cities.

    But at the same time, it’s worth a reminder that “sleeper cars“, or bed carriages as they were originally called, are definitely not a new thing. Possibly the first example of a sleeper car was in England in the 1830s. Trains, of course, don’t take you exactly where you want to go like a car, but a sleeper train does allow you to travel while you sleep.

    And so it is interesting to see that sleeper trains are apparently seeing a resurgence in popularity across Europe. To the point that the trains are full and rail operators can’t seem to get their hands on new carriages. I can’t recall ever travelling in a sleeper train, but I have to say that this looks like a highly civilized way to move around:

    Image: ÖBB (Austria’s national rail operator)

  • Amsterdam wants fewer drunk and annoying people

    Back in 2014, Amsterdam became the first city to have what is referred to as a “night mayor.” And at the time, including here on this blog, this was generally viewed as a pretty progressive thing to do. It recognized that there is an important nighttime economy and that, with the right leadership, it be harnessed for broader economic development purposes. As a result, many cities followed suit and appointed their own night mayors. (Toronto did not, despite my repeated posts.)

    But fast forward to today and things feel different. Night mayors aren’t talked about as much in city building circles. And Amsterdam is actually trying to limit overall tourism growth. It is working to relocate its Red Light District to outside of the city center and it hopes to reduce the amount of people who come to the city just to misbehave. To be clear, it still wants tourists; it just wants more people who do things like go to museums:

    The Netherlands’ capital plans to launch a deterrence campaign later this month aimed at tourists who go wild during their visits. In addition to new ads, the city has proposed rules in its infamous Red Light District, such as a ban on smoking marijuana in the street, earlier weekend closing times for bars, clubs and sex-work establishments and reduced alcohol sales. 

    Amsterdam’s liberal rules for drugs and prostitution have long attracted travelers looking to let loose, but officials say they are taking it too far and harming the quality of life for residents. 

    This is an interesting situation because usually the problem is, “how do we get more tourists to come and visit our city? Should we maybe build a casino or a Ferris wheel or something else equally as big?” Instead, the problem here is, “we have way too many drunk and annoying tourists. How do we swap them for more cultured visitors?” Of course, one solution is to just tell people that they are annoying and that they should stop coming. And that’s generally what the ad campaigns plan to do.

    An alternative approach might be to celebrate all of the other things that one can do in Amsterdam.

  • Seattle is building more accessory dwellings than single-family houses

    In 2019, Seattle made it easier to build accessory dwelling units (ADUs). Among other things, they started allowing two ADUs per lot, they stopped requiring the owner to live on site, and they stopped requiring off-street parking. The result is that the city is now permitting close to 1,000 ADUs per year (2022 figure). And for the first time ever, this figure now exceeds the number of permits issued for single-family houses.

    Part of what’s driving this adoption is that the City created 10 pre-approved plans that owners/builders can choose from. And since they were launched in September 2020, these plans have been permitted 130 times. (Los Angeles did something very similar with its “standard plan program.”)

    In general though, Seattle’s policies seem more permissive than what we have here in Toronto. According to this recent “annual report”, it is estimated that about 12% of ADUs in Seattle are licensed as short-term rentals. About a third are also being permitted as condominiums. In Toronto, any sort of severance is heavily discouraged. The objective was and is to create new rental housing.

    But for Seattle, this seems to be creating more affordable homes for sale. The median selling price for an ADU is apparently $732,000, compared to $1.2 million for a single-family house. This sounds kind of good.

    Image: The Seattle Times