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 impact of climate change on the Winter Olympics

    It was pure luck, but we couldn’t have timed this last week any better. It started snowing in the mountains around Salt Lake City on Tuesday, and it felt like it didn’t stop until Saturday. On Wednesday morning, which was peak powder, the main resorts were reporting anywhere between 23″ and 30″ of fresh now. It was the stuff of magical dreams.

    But snowfall is, of course, highly variable. SLC is having a record year, whereas many resorts in Europe weren’t able to open until mid-January because of a lack of snow. And from a macro perspective, things are generally getting worse. According to this report, for every one degree increase in the world’s average temperature, global snow cover is reduced by about 8%.

    What this mean is that, even in low emission scenarios, many of the places that previously hosted the Winter Olympics, may struggle to do so again in the future because of “non-reliable” snow cover. Freestyle ski and snowboard, for example, typically wants a minimum of 1 meter of snowpack as a base, and sometimes more if melting is expected.

    Things do not look positive for Vancouver, Garmisch-Partenkirchen, and even Chamonix in the below chart. (And as a further blow, the authors of the report also don’t know how to spell Vancouver.) Naturally, this is something that you might want to consider when looking at long-term investments that are dependent on fresh snow.

    You can, however, ignore Sochi in the above chart. Because this was never a great place for the Winter Olympics and it’s unclear to me why this place was ever chosen (other than for presumably nefarious reasons). It’s like: “We are one of the largest and coldest countries in the world. We have a lot of snow in Russia. But for fun, let’s choose one of the few places with a sub-tropical climate.”

    Excluding Sochi, though, this is an alarming chart.

  • Segways, scooters, and AI-powered electric shoes

    The original Segway launched in 2000 and was supposed to revolutionize micro-mobility and the “last-mile problem” associated with getting around cities. Instead, only about 140,000 units were sold in the following two decades and, in 2020, the company stopped production on the namesake vehicle. In hindsight this seems kind of obvious. Segways are/were clunky and expensive. There’s a learning curve. And it’s infinitely difficult to look even remotely cool while riding one.

    But one thing they did get right was the problem. There was in fact a need for micro-mobility solutions, which is why we have seen bike share and e-scooter ridership grow, like this, since the late 2000’s. I think it remains to be seen just how ubiquitous things like e-scooters will become in our cities. But in 2021, there were 900,000 electric scooters sold in France alone. So we’re already doing much better than the Segway did during its lifetime.

    As I have said before, I am a big fan of electric scooters. And I wish that Toronto would stop being so conservative with allowing them in the city. But I remain open to other ideas, so here’s another last-mile solution to consider: $1,400 AI-powered electric shoes. Casey Neistat recently reviewed them in New York City and, I can safely say, that they look Segway-like in terms of their clunkiness and overall attractiveness. They’re still in the prototype phase and they do make you walk about 250% faster; but I’m not yet convinced.

    How about you?

  • The most expensive new subway line in the world

    In other New York City news, they apparently have the most expensive new subway line in the world:

    At $2.5 billion per mile, construction costs for the 1.8-mile Phase 1 of the Second Avenue Subway were 8 to 12 times more expensive than similar subway projects in Italy, Istanbul, Sweden, Paris, Berlin and Spain, according to a report from New York University’s Marron Institute of Urban Management.

    This is an important problem because public transit is good for cities:

    It is not possible to outdo the subway in capacity per amount of land consumed— and in a high-demand city, 12-lane freeways are prohibitively land-intensive. Hook (1994) argued that Japan focused on rail transportation in its largest cities because it had high land values in the postwar era and such strong property rights that widespread land condemnation for freeways based on the American model was impossible.

    If this is a topic that interests you, I would encourage you to check out the report, as well as their Transit Costs Project website. It allows you to compare transit project costs for 159 different cities.

  • New York City appoints first Chief Public Realm Officer

    This could be a good idea:

    New York City Mayor Eric Adams today appointed Ya-Ting Liu as the city’s first-ever chief public realm officer, delivering on a key promise from his State of the City address. In this newly created role, Liu will coordinate across city government, community organizations, and the private sector to create extraordinary public spaces across the entire city and continue to drive the city’s economic recovery.

    As chief public realm officer, Liu will focus on delivering two components of Mayor Adams’ “Working People’s Agenda.” She will execute on a plan to invest $375 million to create and expand high-quality public spaces in all five boroughs, which includes the Broadway Vision plan, a full reconstruction of Jamaica Avenue from Sutphin Boulevard to Merrick Boulevard, and permanent upgrades to Open Streets in the Bronx and on Staten Island. At the same time, she will lead the administration’s work to deliver a permanent outdoor dining program in partnership with the City Council that works for businesses and residents, building on the massive success of the pandemic-era temporary Open Restaurants program, with clear design guidelines and accessible tools for restaurant owners and communities.

    When done right, public spaces have been proven to promote economic development. Perhaps the most obvious example in New York is the High Line. The first two phases cost around $153 million to construct, and as of 2014 it was already attracting some 5 million visitors a year and thought to be responsible for over $2 billion of economic activity. As of 2019, the number of annual visitors had increased to 8 million.

    So if New York ends up with more of these spaces — you know, enjoyable spaces that attract lots of humans and investment — this could be a good idea.

  • Cascading house in Park City lists for $29,000,000

    We were having pizza at Davanza’s the other night and I started flipping through one of those real estate magazines that you find scattered around places like Park City.

    Now, more often than not, when I come across a house listed for tens of millions of dollars, I usually look at it and think to myself, “okay, I know this is a really expensive home and it is likely that someone will want to buy it, but I objectively don’t like it.”

    However, as I was flipping through the magazine, I came across this listing and instead thought, “hey, this is actually a really cool house.”

    Designed by Wallace Cunningham, the 8,000 sf home features a cascading roof line that looks like an “S” in plan. (It also seems like all of the interior spaces were laid out in service of this plan design, which, depending on your own architectural proclivities, could be considered either a perfectly fine thing or an arbitrary thing.)

    It’s an interesting house. So here’s a video tour.

  • Shelter CPI is a lagging indicator

    Charlie Bilello shared this interesting housing chart in his weekly newsletter:

    Shelter is one of the largest components of the CPI index (about a third). And at 7.9% (see above), this is the highest rate of housing inflation since 1982. However, the shelter component — which is largely a combination of rent on a primary residences and the implicit rent that owner occupants would pay if they were renting their homes — has historically been a lagging indicator. Apparently it has something to do with the way that it’s calculated. So for this reason, the shelter CPI has only increased 14.9% since the start of 2020, whereas home prices nationally increased by about 40% and rents increased by about 20%. It’s also why there appears to be a disconnect (in the above chart) with rents. All of this is to say that we might see shelter jump up a bit further as it continues to record what happened over the last few years.

  • Big Cottonwood Canyon, Utah

    Today we went skiing and snowboarding at Brighton, which is in Big Cottonwood Canyon. It was cool seeing the landscape transform and the temperature drop as we went from 4,300 feet (in Salt Lake City) to 8,755 feet (at the base of the mountain). Here are a few snaps from the road.

    Shot on iPhone

  • Hong Kong is building new “light public housing” — why?

    We have spoken before about how the average wait time for public housing in Hong Kong is now over 6 years. This is a problem for the quarter million people who are on this list, and so the city has decided to start building modular housing as a kind of stopgap:

    The city has embarked on a $3.3 billion plan to build about 30,000 temporary apartments over the next five years, which Housing Secretary Winnie Ho has said is a “very important social project.” The aim of the program is to give people an option to move out of cramped quarters while waiting for public housing. Critics say it only shows the government’s inability to deliver enough permanent homes.

    I think many would agree that “light public housing”, which is what this is being called, is probably better than no public housing. But is this really the most effective move? According to some sources, this light varietal may actually cost more to build than their typical public housing.

    So why even bother? Is it just speed? I’m not sure.

    Also, it is interesting to note that even in a city as dense, built out, and in need of housing as Hong Kong, finding support for new development can be a challenge:

    “We understand that Hong Kong needs land to build public housing for people in need, so we never objected until this time,” said Andy Ng, an accountant who bought an apartment in the Upper RiverBank project early last year. The government is squeezing thousands of people on a single plot of land without planning or consultation, he added. “The district simply can’t stomach so many people.”

  • Why construction productivity lags other sectors of the economy

    Construction is an essential sector of the economy, responsible for building and maintaining the physical infrastructure that underpins our society. However, it’s no secret that construction productivity lags behind other sectors of the economy, such as manufacturing and information technology. So why is this the case?

    One of the main reasons for the productivity gap is the unique nature of the construction industry. Unlike other sectors, construction projects are often one-off, bespoke endeavors, making it challenging to achieve the economies of scale that are typical of manufacturing or technology. Each project requires a different set of skills, tools, and materials, which can be costly and time-consuming to source and manage. This leads to a lack of standardization and efficiency, which can hinder productivity.

    Another factor that contributes to low productivity in construction is the reliance on manual labor. Despite the increasing use of technology and automation, much of the work in construction still relies on physical labor, which is subject to human limitations and the potential for errors. This can result in delays, rework, and additional costs, all of which impact productivity.

    Moreover, the construction industry faces challenges in terms of supply chain management and workforce development. The industry relies heavily on a complex network of suppliers, subcontractors, and laborers, all of whom must be coordinated and managed effectively. This can be difficult, particularly in light of the current labor shortage and skills gap in the industry.

    To address these challenges, the construction industry needs to embrace innovation and new technologies to improve efficiency, standardize processes, and reduce waste. There is also a need to invest in workforce development and training to upskill the existing workforce and attract new talent to the industry.

    In conclusion, the construction industry faces unique challenges that make it challenging to achieve the productivity gains that are typical of other sectors. However, with the right investments in technology, training, and process improvement, the industry can overcome these challenges and continue to build the infrastructure that our society relies on.

    Maybe you didn’t notice. But if the above doesn’t sound like me and my writing, it’s because today’s blog post is brought to you by ChatGPT (AI). The prompt I used was, “write a short blog post about why construction productivity lags other sectors of the economy.”

    On some level, it’s unsettling that AI can now, almost instantaneously, spit out a blog post like this. It would now be pretty easy to set up a daily blog, like this one here, and use ChatGPT to populate it each day.

    But of course, while that might be interesting initially, it would quickly become a banal baseline. Anyone and everyone could copy what you’re doing. AI is going to change a lot. But our jobs remain the same: find new ways to create value and be remarkable.

  • 12th annual

    For those of you who are long-time readers of this blog, you might remember that I do an annual ski and snowboard trip with a group of close friends from both Canada and the US. This year should technically be the 14th annual, but we took two years off during the pandemic (though some of us did meet up to ski), and so we’re referring to this as the official 12th annual. The last one was in February 2020 in Fernie, BC, and this weekend we’re off to Park City, Utah.

    This annual trip is something that I look forward to all year. And it has really cemented my love of snowboarding and the mountains. For me, it’s this wonderful combination of outdoor activity, beautiful landscapes, unplugging, and catching up with friends that I have known, in many cases, for over 20 years. In fact, I know that this trip is the reason that a few of us decided to get together to build Parkview Mountain House (our upcoming “creative mountain retreat” in Park City).

    A big part of what we want to do with the house (when it’s hopefully ready next winter) is share our love of the mountains with others. We want others to experience what we experience when we go on these trips. At the same time, we felt like there was a huge gap in the market. Park City is a world-renowned ski and snowboard destination, and yet it still feels hard to find modern and design-focused places to stay. So we decided to create our own.

    There is, however, one small problem: my right knee. It has been bothering me for the last few years whenever I snowboard, and usually only when I snowboard, to the point where I have to get off the mountain. This obviously pisses me off. So I decided to spend the last 2 months training my tender knees with Noah Mandel. We’ll see if that did anything this weekend. But I’m so committed to the mountains that, if it helps, I’m even prepared to switch to skiing!