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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  • On-street EV charging stations are the next street light

    On-street electric vehicle charging points are starting to roll out across Toronto. Here is one that I came across this morning in the Junction on Annette Street. The stations are from Flo.

    At its core, this is, of course, a great thing. Ubiquitous charging points are a critical component of overall EV adoption. But at the same time, it was a good reminder that (1) above-grade electrical wires are ugly (this is the typical Toronto approach) and that (2) on-street EV charging is a design challenge that is going to need to be solved.

    In the above example, the charging stations were mounted to an existing electrical pole and two bright yellow bollards were installed on either side to make sure nobody smashes into said charging stations while they’re parking and/or trying to watch TikTok videos on their phone.

    But what happens when nearly everyone has an EV? There are only so many electrical poles, so we will need to move on to standalone stations at some point, and that is obviously already being done. But if we’re going to have charging points practically everywhere, how should they work and what should they look like?

    I am sure that lots of very smart people are already thinking about this. But as someone who is not directly involved in this space, it feels like we need to think about these in a similar way to street lights. Because they are going to be just as ubiquitous, if not more so. That means there is a strong cause for making them both functional and beautiful.

    In fact, this feels like a real city branding opportunity.

  • How to cheapen a new building

    Anyone who has ever worked on a development pro forma will know that the process generally works like this: You start with a bunch of assumptions. You assemble those assumptions in a way that will allow you to determine if the project in question is feasible. And then, you realize that almost everything is more costly than you initially thought and that the project may not actually work. Oh shit.

    In fact, a sure-fire way to know that you’re on the right track is if the numbers sort of don’t work. If the returns look too good to be true, they almost certainly are and you’re likely missing something big and meaningful. As we have talked about before on this blog, development happens on the margin. That means that you have to work at it. You have to be creative. And often you have to find ways to increase revenues and cut costs.

    The common way to find money is through something known as value engineering, which is just a fancy way of saying, “I need to cut costs, so let’s see what I can tolerate losing from this project.” That’s generally how it works. And we do it on every project. You’re trying to find high-cost items with relatively low perceived value.

    This process often gets a lot of criticism because people view it as a distasteful cheapening of a project. But the reality is that it is usually an important part of maintaining project feasibility. You may really want to use that fancy material you can only get from Switzerland, but maybe development charges were just increased and now you need to offset those new costs by finding savings somewhere else.

    This isn’t a perfect analogy, but imagine you were shopping for a new car. You might start out by wanting the fully-loaded version, but then you see the price and realize you can’t afford it. So you decide to start trimming features and add-ons until you get to a place where you feel more comfortable. I would imagine this happens with cars, and I’m not sure it’s right to point to that person after and say, “oh my god, I can’t believe you cheaped out and didn’t buy the fully-loaded version.”

    At the same time, I think it would be perfectly reasonable to argue that you don’t need to spend a lot of money to (1) care deeply about the work that you do and (2) have taste. You can’t fight the economic realities of the world, but you can care and you can be creative. And I don’t think it’s too much to advocate for these things.

  • Cruise expands autonomous taxi service in San Francisco

    Cruise, which I wrote about earlier this year, has just announced that its autonomous taxi service will soon be available to the general public 24 hours a day, across all of San Francisco. Initially the service was only available between 11PM and 5AM (when traffic volumes are lower), and in certain parts of the city. It was also free to use. In total, the company now has about 300 AVs operating across San Francisco, Austin, and Phoenix. And it has been charging for rides since June of this year.

    If you’re curious about what it’s like to ride in one of these, check out the above video.

  • Money, identity, and ownership

    For those of you who are interested in crypto (and for those of you who aren’t but are open-minded), Vitalik has just published this post talking about what in the Ethereum application ecosystem currently excites him. A lot of it is pretty technical, but the 5 overarching categories he talks about are: (1) money, (2) decentralized finance, (3) identity, (4) decentralized autonomous organizations, and (5) hybrid applications.

    Money has always been considered the first and most important application of crypto. But there is no shortage of people who will tell you that it’ll never work and that fiat currencies backed by a government will always be superior. Today I already think the answer is: it depends. So lately, I have been responding to this comment by asking: Would you rather own the Argentine Peso or would you rather own someting like ETH?

    Here’s how Vitalik talks about this same point:

    When I first visited Argentina in December last year, one of the experiences I remember well was walking around on Christmas Day, when almost everything is closed, looking for a coffee shop. After passing by about five closed ones, we finally found one that was open. When we walked in, the owner recognized me, and immediately showed me that he has ETH and other crypto-assets on his Binance account. We ordered tea and snacks, and we asked if we could pay in ETH. The coffee shop owner obliged, and showed me the QR code for his Binance deposit address, to which I sent about $20 of ETH from my Status wallet on my phone.

    This was far from the most meaningful use of cryptocurrency that is taking place in the country. Others are using it to save money, transfer money internationally, make payments for large and important transactions, and much more. But even still, the fact that I randomly found a coffee shop and it happened to accept cryptocurrency showed the sheer reach of adoption. Unlike wealthy countries like the United States, where financial transactions are easy to make and 8% inflation is considered extreme, in Argentina and many other countries around the world, links to global financial systems are more limited and extreme inflation is a reality every day. Cryptocurrency often steps in as a lifeline.

    The other category that I find very interesting is that of identity. And it relates to a post that Fred Wilson also happened to share today where he talks about the importance of identity and the coming need for us to start cryptographically signing everything. In my mind, what this comes down to is proving things like who is who, who is doing what, and who owns what.

    This may sound counterintuitive since crypto is often held up by the media as a way to obfuscate identity and conceal nefarious activities. But the thing is, as soon as you link a real human to a blockchain, you can now have identity and ownership records that are institution-independent and fully interoperable. One use case that immediately comes to mind is property deeds, which is of course already being done in some places.

    For Vitalik’s full post, click here.

  • Toronto’s first apartment boom (1900 to 1920)

    North American cities have long had a problem with apartment buildings.

    One the one hand, they were viewed as an important requirement for world-class status. Regardless of whether there was an economic imperative to build in this way, you needed grand buildings to communicate that you were an important and sophisticated city.

    But on the other hand, apartments were viewed as clearly inferior to low-rise houses. Apartments were too dense; they were thought to morally corrupt people (infidelity meant just walking down the hall); and by definition — until the rise of condominiums — they were filled with renters.

    I recently stumbled upon this 1989 research paper by Richard Dennis (through Bob Georgiou’s blog) and it is a fascinating account of Toronto’s first apartment-house boom from 1900 to 1920:

    One of the first apartment houses to be completed in the city was the Alexandra Palace Apartments (pictured above) on University Avenue near Elm Street:

    The next building to be completed, the Alexandra, on University Avenue, was on an even grander scale. It was promoted by the Union Trust Company, but subsequently owned by the specially constituted Alexandra Palace Co. Ltd., and opened in 1904. The building, of stone, brick and steel construction, comprised 72 suites on seven floors; it also included dining rooms. In 1905 more than a quarter of its suites were vacant, mainly on the upper floors (although the very top floor was fully occupied); its tenants included a leading judge, two barristers, a professor, a doctor and a prominent real estate agent, but otherwise its social standing did not quite match that of St George Mansions. In 1915 occupants included Professor James Mavor. There were more tenants aged in their thirties than in St George Mansions, but overall the average age of 42 and household size of 2.6 was not dissimilar.

    But perhaps the most interesting part of the paper is Toronto’s reaction to this apartment boom. We moved to stop it:

    Nonetheless, it is clear that the attempted invasion of high-status single- family areas in Parkdale and, more especially, Rosedale and Avenue-St Clair, provided the catalyst to action. For all the moral outrage and sanitary evidence, there was little concern as long as apartments stayed downtown or in lower-status neighbourhoods. This becomes even more apparent when we examine what happened in the months following the passage of the by-laws.

    Toronto’s housing stock has changed dramatically over the last 100 years or so, and we are now nearly 50% apartments/condominiums over 5 storeys. But at the same time, some things seem to never change.

  • Micromobility ridership in the US from 2010 to 2021

    The National Association of City Transportation Officials (NACTO) has just published this report on shared micro mobility in the US from 2010 to 2021. And it’s a good look at how this space has evolved over the years. According to the report, the first modern North American bike share system was installed in Montréal in 2009 and the first in the US was in 2010. Though a quick Google search has Washington DC claiming this title in 2008.

    Whatever the case may be, bike share ridership started somewhere around 321k per year in the US and trip volume is now close to 50 million per year. Electric scooters also joined the mix in 2018, and 2019 was a banner year for this mode of transportation. The report suggests this was due to cheap VC money subsidizing these rides. Electric scooters have seen their average trip cost 2x between 2018 ($3.50) and 2021 ($7), despite the average trip distance remaining more or less flat (1.3 to 1.2 miles).

    Naturally, the pandemic was bad for shared mobility. But it is interesting to see how much this space has rebounded and how resilient it seems to be. Prior to the pandemic, bike share usage had clear morning and evening peaks, coinciding with people commuting to work. Since then, we have seen a shift to both a wider range of trips (i.e. to do things like get groceries) and more trips throughout the day.

    To download a full copy of the report, click here.

  • People like TikTok and grocery stores

    Dan Frommer has just just released his latest Consumer Trends report (2023). If you’d like to download a free copy, you can do that over here. It is amazing to see how big of a deal Tik Tok has become. In Q3 2022, the average Android user spent 98 minutes per day in the app. That is a lot, and it’s roughly 2x what Facebook and Instagram each saw (though if you combine these two apps, I guess they’re pretty similar). Either way, this is where people’s attention is now being spent. For those of us in real estate, the report also has some interesting slides on grocery stores. The key message here is that physical stores remain hugely important.

    The year-over-year change in online grocery spending is now flat to a little negative:

    No matter which generation you ask, more people prefer shopping for groceries in-store, versus online:

    And even when people do shop for groceries “online”, they still tend to pick them up from their local store or have that local store deliver it to them (so the store matters):

    For the full report, click here.

  • Call to Hamilton artists

    Our team is looking to partner with local Hamilton, Ontario-based artists and creatives as part of a new project that we’re working on for next year. So this post is intended to be a call to artists. If you’re based in Hamilton and doing great work, we would love to hear from you. Please drop me an email (brandon@slateam.com).

    In my mind, art and culture is a fundamental ingredient in Hamilton’s ongoing renaissance. Each and every time I’m in the city, I feel like I meet someone who is an artist. And there are so many great examples that we can point to.

    Take Scott Martin (aka Burnt Toast). Scott is a Hamilton-based illustrator and co-creator of the fantastically popular Doodles NFT collection. I don’t have one in my wallet, but I can tell you that I want one. The current starting price for a Doodle is nearly US$9k. But as an alternative, you could also just go to downtown Hamilton and look at one of Scott’s public murals.

    Go Hamilton. Please show us what else you are creating.

    Photo by Abigail Chen on Unsplash

  • French people like electric scooters

    Toronto doesn’t like electric scooters. Something about them being dangerous. But here are some interesting statistics for France, which has apparently become the leading scooter market in Europe:

    • The Fédération des Professionnels de la Micromobilité (FPMM) — yes, this exists — estimates that there are about 2.5 million regular scooter users in France.
    • In 2021, about 900,000 units were sold in the country, which represents a 42% increase compared to 2020.
    • Sales directly to users is outstripping the revenue from self-service operators such as Lime, Bird, Dott, and Voi. Current annual estimates are in the range of €310 million and €40 million, respectively.
    • About 50% of scooter sales are happening at grocery stores, compared to 30% at other retailers, and 20% online. (This is kind of interesting. I wonder if people are impulse buying while shopping for food.)

    I am a big fan of electric scooters. And all of this suggests to me that scooter adoption is likely to continue, that we are going to need to start thinking more about how best to incorporate them into our cities, and that eventually Toronto will have to stop being so conservative.

  • European cross-border electricity interconnections

    The EU has the following target in place for the sharing of electricity:

    The EU has set an interconnection target of at least 15% by 2030 to encourage EU countries to interconnect their installed electricity production capacity. This means that each country should have in place electricity cables that allow at least 15% of the electricity produced on its territory to be transported across its borders to neighbouring countries.

    The main reasons to do this is that it is good for renewables and it is good for overall resilience. The UK, for example, has one of the largest offshore wind markets in the world. But if it’s having a bad wind year, interconnections allow it to import the electricity it may need — perhaps from Norway, which is Europe’s biggest producer of hydropower.

    Here is what that looked like in 2021 (via the FT):

    Of course, this works really well when there’s enough electricity to go around and everyone is cooperating. The question this winter is whether that changes at all.