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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  • Use-it-or-lose-it entitlements

    One of the things that cities often try and stamp out is speculation. Homes should not sit empty (enter vacant home tax). Storefronts should not sit empty (enter vacant commercial tax). And development land should not sit undeveloped. To correct this latter problem, one idea that is sometimes floated around is “use-it-or-lose-it” zoning.

    The way it works today in, I believe, most cities, is that if you do a site-specific rezoning on a property — and secure additional density — you get those special permissions forever. If you want to wait 100 years before starting construction, you are technically entitled to do that. Of course, in the interim, no new housing is actually being created. It’s all just on paper.

    The idea with “use-it-or-lose-it” entitlements is that — instead of these permissions lasting forever — they would expire after a certain period of time, which would mean that the entire rezoning process would need to be done all over again. These take time (at least a few years) and cost money (it’s in the millions). And so it has been suggested that this would incentivize developers to not sit on entitled land.

    While I do understand where this line of thinking is coming from, let me make a few points:

    • Generally speaking, most developers don’t just sit on entitled land for fun. They need things to happen, and to happen quickly, so that value can be realized. If there is a problem of too many developers not actually building, it could be a sign that there are other market factors impacting feasibility.
    • There is nothing wrong with rezoning a property and then “flipping it out” to another developer. This is often viewed negatively. But some developers only rezone properties and some developers only buy zoned sites. These can be different phases of the value chain. A rezoning can take years and millions of dollars, and so sometimes developers don’t have the wherewithal or desire to do both.
    • A use-it-or-lose-it approach unfairly punishes developers during market cycles and bear markets, like the one we are experiencing right now. There is no way to predict when the next global pandemic will hit, when construction costs might surge 40%, and when the fed could start rapidly increasing rates to calm inflation. Maybe waiting out the storm is all you can do.
    • If you’re building condominium housing in our market, you generally need pre-sales in order to secure a construction loan. Let’s call it 70% pre-sold. What happens if this takes longer than expected? And what happens if you sell 50%, your site-specific rezoning expires, and then you have to restart the entire process? At this point and in this current market environment, you would likely have to cancel the entire project and reboot it.
    • Timing is important. To give a specific project example, we had planned to launch condominium pre-sales for our One Delisle project in the fall of 2020. And we were ready to do that. But sentiment didn’t feel right. Too pandemic-y still, and so we waited until the spring of 2021. This turned out to be the right decision. But what would have happened had we had this timing gun to our head? (Truthfully, it always feels like there’s a timing gun to our head.)
    • I have written about this before, but go-to-market strategies are changing in this current environment. It is taking longer to start sales and construction because, among other things, developers are spending more time trying to pin down their construction costs. Would rezoning expiries take all of this into consideration and adjust accordingly?
    • Finally, if one is going to do something like force developers to pull all of their building permits within X months of receiving zoning approvals — or else suffer the consequences — then everything required to get there should also have a maximum timeline associated with it. In other words, cities would also need to do things like commit to issuing permits within Y months of receiving a submission — or else. It’s only fair that this cuts both ways. But just to be very, very clear, I do not think this is a good idea.

    What I am broadly saying is that (1) development is a pain in the ass and (2) developers are already heavily incentivized to move quickly and make things happen. It is not uncommon for projects to take 5-10 years from site acquisition to completion. And a lot of unexpected things can happen during that time period. Hopefully losing your entitlements doesn’t become one of them.

  • Last night in Sicily

    The first time I went to Italy was, I think, when I was about 18 or 19 years old. My friend and I took the train down to Milan from Zug, Switzerland (where his father lives), and we got out of the train station without any idea as to where we were going or where we were going to stay. We were young and brazen and clearly not very prepared. I was probably also wearing Diesel jeans and holding a Sony Ericsson T68 in my hand. Sadly, neither of these things were all that helpful as travel aids.

    Today it’s impossible to imagine traveling without our smartphones and apps like Google Maps, Google Translate, Airbnb, Uber, and many others. I know that Uber has received its share of criticism over the years, but if you want to fully appreciate what Uber brought to the world, go to a place that you don’t know, that is generally unsafe, and where you don’t speak the language. It becomes invaluable. (This was Rio de Janeiro for me.) But even without all three of these things, it’s an incredibly powerful tool.

    In situations where there is zero overlap in languages, I have also used Google Translate to have entire conversations. When push comes to shove, I prefer this approach over trying to impose English (or French) on someone. After all, I am the visitor. I should be the one bending as much as possible. You can also use the app to photograph a restaurant menu and have the entire thing translated in realtime. This to me — realtime reading — feels like a powerful use case for when augmented reality arrives.

    I also like to use to Google Maps to fastidiously track where I want to go and where I have been. I love logging my travels, and that is much easier to do today compared to the Diesel jean days. I also try and remember to pre-download whatever maps I need so that I’m less reliant on roaming. Here is what Marseille and Sicily look like right now following our trip:

    (If any of you are looking for recommendations, CRABE-TORO was our absolute favorite restaurant in Marseille and Càssaro was our favorite place for a drink in Noto, Sicily. We, unfortunately, never tried the food at the latter, but I’m sure it’s terrific.)

    Technological change has always elicited criticism, negative externalities, and some people wishing that things would just remain as they are. And there is, of course, something liberating about getting off a train in a foreign city and figuring out things as you go. In Milan, we simply walked into various hotels, asked them what their rates were, and then probably got taken advantage of as two young Canadians.

    At the end of the day, though, I am a firm believer that the world is a better place because of technological progress. From the Gutenberg printing press to Google Maps, technology empowers us as humans. And I have little doubt that 10 years from now we’ll all be traveling with some sort of augmented reality device and romanticizing the good old days of pins on a Google Map.

    For the Canadian readers out there, I wish you all a happy Thanksgiving weekend. I am back in Toronto and regularly scheduled programming will now resume on the blog. I hope you enjoyed some of the post diversions over the last 10 days.

    Photo taken at La chiave in Catania, Sicily

  • AusterityTO

    I don’t know who is behind the guerrilla art project AusterityTO, but it is exceedingly clever. Whoever it is, they are going around Toronto and tagging various objects and moments with museum labels — all of which cite mayor John Tory as the artist. Here is one called “Urinal.”

    And here is the installation description from the website:

    A clever subversion of the seminal work “Fountain” by Marcel Duchamp. Water does not flow from this fountain due to neglected maintenance and lack of attention. It is a sculpture which asks the viewer to imagine what it could be, and to ponder why it isn’t. However, the artist’s title also challenges the viewer, much as Toronto challenges the citizen to find ways to make the most out of what we have: the washrooms are frequently locked, and perhaps this fountain can be repurposed for something else.

    There is growing frustration in Toronto around the quality of our public services and spaces. I can’t open Twitter these days without coming across at least one photo of a busted and/or overflowing garbage bin. And now these sorts of posts are all being tagged with #AusterityTO.

    Images: AusterityTO

  • Some Sicilian inspiration for #KioskTO

    I have written before about how Lisbon’s kiosks both anchor and beautify the city’s public spaces. I have also written about how Toronto should have something similar — #KioskTO anyone?

    Some of you might remember an expanded street food program that the city piloted many years ago. It was a complete and utter failure. In my opinion (and from what I can remember), it was too heavily regulated. The food ended up being far too expensive and, frankly, none of it was very good.

    That’s not how this should work. The entire point of things like food trucks and street kiosks is that they are cheaper alternatives to a conventional physical location. You can also more easily place them in locations where demand is being underserved.

    The one pictured here is in Catania, Sicily. I carried my beer over from a panini shop down the street and then we ordered three espressos for a total of 2€. I tried to sit on a crate they had lying on the ground but I ended up breaking it. Sorry, guys. So we stood instead. It was all rather civilized.

    Let entrepreneurs figure out what to sell and where. It will be a boon for both small business and for our public spaces.

    P.S. I tweeted this photo out earlier today and it elicited a good discussion on Twitter. Toronto wants this.

  • The even narrower streets of Noto, Sicily

    So it turns out that the narrow streets in Le Panier (in Marseille) are actually far too wide at nearly 13 feet. What were the planners even thinking back in 600? Here’s a street I found in Noto, Sicily at just over 4 feet. I’m not sure if this is considered some sort of tertiary lane or not, but it had a street sign, addresses, and businesses in a courtyard at the end of it. So I’m going to assume it’s a bona fide street. It’s hard to imagine getting much tighter than this. I wonder if Jeff Bezos delivers here.

  • Miami is the top US city for foreign businesses

    The Financial Times and Nikkei have just published their inaugural Investing in America report, which looks at the best US cities for foreign multinationals to invest in and do business in.

    To come up with this, they used about three dozen different metrics — everything from openness to quality of life. From what I can tell though, it doesn’t appear that climate risk factored much into this ranking. It should.

    There’s a lot of Florida on this list and Miami comes out on top, largely because, last year, it had the most foreign direct investment per capita of any US city. It also has a well-connected airport, two of the largest shipping ports in the US, and an international population.

    Lots of people and companies are going long Miami right now.

  • Placemaking art

    Back in 2017, when Superkul (architects) first started coming up with concept designs for Junction House, we all decided that it would be nice if we could do something to mark the important view terminus that exists with our site.

    We explored a few different ideas and then ultimately landed on a rooftop neon (or neon-like) sign that would read “Junction House.” The idea was to pay homage to the old signage that used to be present in the Junction and to some of the iconic rooftop signs that still exist around the world.

    Of course, the goal was never advertising. There is no economic imperative for us here. We just wanted to do something fun that at the same time could mark the entrance to the Junction neighborhood.

    After proposing this idea, we quickly learned that these are next to impossible to get approved. But to their credit, the City of Toronto fully got it. We heard things such as, “look, we can’t call this art, but we like the idea and we like what you’re trying to do.” Thank you for that.

    The compromise we ultimately struck was to remove the “House” part, leaving just “Junction.” This way it no longer referenced our project and instead referenced a place. By doing this, it became “placemaking.” And that is what is now baked in our site plan approval.

    Fast forward to 2022, and we are now getting ready to test our first 1:1 mockup of the sign. I can’t wait to see how this looks on site.

  • Waterfront vernacular

    Marseille, France

  • The greatest photo of Venice I have ever seen

    This afternoon we went to the Mucem (Museum of Civilizations of Europe and the Mediterranean) here in Marseille. By far, my favorite exhibition was one that dealt with the urbanization of five cities surrounding the Mediterranean — namely Marseille, Venice, Istanbul, Cairo, and Alger. At one point, this was the center of the commercial world. Great empires were forged and great fortunes were made here. But things have changed a little since then. And in some cases, what we are now left with are scenes like the one you see above (photograph by Martin Parr). This is easily the greatest photo of Venice I have ever seen. Venice is a tiny city, but it receives tens of millions of tourists each year. This photo does an extraordinary job of capturing what that might feel like.

  • Flash Invaders

    I love seeing these little Invaders all over Marseille. They are everywhere — and usually in a place where you’d be looking even if it wasn’t there (see above). I just learned that there’s also a game you can play with them called Flash Invaders. The way it works is that you earn points every time you come across one and snap a photo. I haven’t been playing. But even without that, they are a lot of fun to discover. I see them as 100% public art and I wish we had something similar in Toronto.