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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  • A place for everything

    Housing is expensive in California:

    In 2021, San Jose had the least affordable housing among the 92 major US housing markets, with a median multiple of 12.6. San Francisco had a median multiple of 11.8, Los Angeles was at 10.7, followed by San Diego, at 10.1).7 Housing was severely unaffordable even in the interior markets, with Riverside-San Bernardino at 7.4 and Sacramento at 6.7.

    And there are some explanations for why that is the case:

    Dartmouth economist William Fischel published an early seminal review 9 of housing affordability in California (1970 to the 1990s). Fischel suggested that regulatory research should look for major changes that “are adopted in some places but not in others.”

    Fischel examined the higher house price increases that occurred in California compared to the rest of the nation between the late 1960s and late 1980s. Fischel cites various possible causal factors. He found that the higher prices could not be explained by higher construction cost increases, demand, higher personal income growth, the quality of life, amenities, Proposition 13, land supply or water issues.

    Instead Fischel cites stronger land use restrictions — There were two principal issues, the California Environmental Quality Act (CEQA) and local growth management restrictions.10

    We have discussed this issue many times before on the blog, but Wendell Cox’s article is helpful in pointing out that zoning in and of itself wasn’t the problem. The problem arose, at least according to Fischel’s research, when these policies went from “ordinary zoning” to something that became a tool to restrict growth.

    The illustrate what “ordinary zoning” means, Cox uses the idiom, “a place for everything, but everything in its place.” And I think this is an interesting way of putting it. Part of the reason why we have zoning is that it is a way to organize uses. It is a way of saying that sex shops and cannabis shops can’t go here, but they can go over there.

    But the key part of this idiom is its first part: a place for everything. What this implies is that the answer should never just be, “no, sorry, you can’t build this.” At most, it should be, “no, sorry, you can’t build this here, but you can over there.” There is a place for everything.

    Of course, this is much harder to do when you flip from sprawl development to infill development. Because now there are fewer places “over there.” You really have to figure out “here.”

  • The Derek Zoolander autonomous vehicle problem

    According to McKinsey, something like $100 billion has been invested in trying to get autonomous vehicles to work and yet the industry remains stuck with problems like this one here:

    State-of-the-art robot cars also struggle with construction, animals, traffic cones, crossing guards, and what the industry calls “unprotected left turns,” which most of us would call “left turns.”

    The industry says its Derek Zoolander problem applies only to lefts that require navigating oncoming traffic. (Great.) It’s devoted enormous resources to figuring out left turns, but the work continues.

    Right now certainly feels like an autonomous vehicle winter (we have many winters going on at the moment). The industry has spent a lot of time and money getting maybe 90% of the way there, but this last bit has proven to be a lot more challenging than I think most people anticipated.

    This has a lot of people thinking that it’s going to be many decades before we finally get full autonomy (if ever) and that, in the interim, all we will have are very specific use cases: trucks on highways, mining machines (the above article writes about this), and so on.

    This may very well be the case. Frankly, I don’t know. But it’s perhaps important to remember two things: (1) pessimists aren’t usually the ones who change the world and (2) there is something known as the Gartner hype cycle, which is a graphical representation of how new innovations typically get adopted.

    The Gartner hype cycle has five phases. The important ones for this discussion are the first three. First there is a technology trigger. Second there is an inflation of expectations (until it hits a peak). And then third, there is a trough of disillusionment. This is the moment where interest wanes and people begin to think it’ll never happen (until it does happen).

    That might be what we’re living through right now, or it might not be. But my gut tells me that it’s the former.

  • Are elevators bad?

    So, I of course think this is silly. But here’s a claim that living in high-rises — that is, buildings with elevators — is bad for people’s physical and mental health:

    In the midst of a Vancouver civic election where housing is a hot issue, Vancouver councillor and mayoral candidate Colleen Hardwick stated that “highrises are not good for people’s physical and mental health.”

    Last week we asked Hardwick to expand further on her views about health and building types. She told The Tyee she believes highrises radically reduce chance encounters between people because they separate people from the street and from each other.

    “Ground-oriented housing typologies are ideal,” she said, referring to housing that allows a resident to reach their place of residence using stairs, perhaps, but not an elevator.

    Apparently what happens when you get into an elevator is that you immediately lose your ability to interact meaningfully with other humans. Yeah, I’m not the only one who disagrees:

    “Coun. Hardwick is cherry-picking her data” about highrise living and the isolating effects of structures with elevators, accused urbanist and author Charles Montgomery. A six-storey building with an elevator, he told The Tyee, is “the most social place I’ve ever lived.”

    Cities, it turns out, are complicated. And there are always trade-offs to be made. During the pandemic, some people thought it would be nice to live in a ground-oriented home in the country and now they are realizing that the country lacks things like amenities and, you know, other people.

    Personally, I will happily take an elevator over a soul-crushing commute to a home without one. I also agree with Charles that multi-family buildings can be very social.

  • Niagara’s wine country is missing something

    Neat B and I were in the Niagara wine region over the weekend and I was reminded of a few things:

    • Winemakers in Niagara will tell you that southern Ontario isn’t the easiest of places to grow and make wine. But whatever, I think that Niagara is highly underrated. Niagara has some exceptional wineries that you really should explore if you aren’t familiar. Ontario is also the largest ice wine producer in the world, by a long shot. We produce something like 90% of the world’s supply. Ice wine can be a bit of an acquired taste — they’re sweet. But if you get a chance, try one from Stratus. They are supposedly the driest in the world.
    • I don’t know how the wine demographics have shifted in other regions, but we were told over the weekend that 10 years ago it was mostly gray hairs who were out at wineries buying wine. Today, there are tons of young people in their 20s, 30s, and 40s. And we certainly saw that over the weekend. This shift has winemakers now adjusting their wines. I couldn’t tell you what a younger wine palate wants, but apparently it’s something.
    • Lastly, there is a complete lack of cool and modern boutique hotels in the area. I would imagine that part of this is because the Niagara wine region is still emerging. But I think the other reason has to do with my previous point: younger people now want to go to wineries and the hospitality sector hasn’t yet caught up. This strikes me as a massive opportunity.

  • New York City proposes a bounty for reporting bike-lane blockers

    The general rule when it comes to bike lanes is that, if you build them without some sort of grade-separation, at some point a car is going to park in them. But here are two possible solutions to this problem. The first is that you could build some sort of grade-separation that can’t be driven over. And the second is as follows:

    Now a New York City Council member is pushing a bill that would give civilians the power to report bike lane scofflaws, as well as vehicles that block entrances or exits of school buildings, sidewalks and crosswalks. New Yorkers who submit evidence of a parking violation can earn 25% of a proposed $175 ticket. The Department of Transportation would review the evidence to determine whether an infraction has occurred, according to the bill’s text.

    What this essentially does is decentralize rule enforcement by paying people to be rats. Off hand, I can’t think of any other cities that have done something like this and so I don’t know how effective it might actually be. But being a rat sounds like it could be a good paying job.

    Let’s assume that somebody decided to treat this as their full-time job and work 8 hours a day, Monday to Friday. And then let’s assume that they were able to rat out one person per hour. Here’s how much money they could make in a year:

    • $175 x 25% = $43.75 per illegal incident
    • $43.75 x 8 incidents per day = $350 per day
    • $350 per day x 5 days a week = $1,750 per week
    • $1,750 per week x 52 weeks = $91,000 per year

    Now, if the goal of this rat-people-out program is to ultimately change behaviors, then it might make sense to assume that your revenues would decline over time as more people start following the rules. Either way, something tells me that more than a few people would be happy to take on this job.

  • It’s not too late for the Gardiner Expressway East

    Boy, time sure does melt away when you’re writing a daily blog and trying to build buildings. It’s hard to believe that it has already been 7-8 years since I was writing incessantly about the merits of Toronto removing the eastern portion of its elevated Gardiner Expressway.

    For those of you who may not be familiar, Toronto has an elevated highway that runs along the waterfront. It is old. Pieces sometimes fall off. Lots of water will drip on you. And so remediation works are underway. Several years ago, there was also a great debate that took place in the city about what should happen with its eastern leg. I even spoke at a Jane’s Walk where I was, for the most part, not very popular.

    The two options under consideration ended up being: 1) remove it and replace it with a grand surface boulevard or 2) remove it and rebuild it with a slightly different alignment. This second option was dubbed the “hybrid” option, but that was mostly political speak so that it sounded like some sort of generous compromise. You can think of it as the more expensive rebuild option.

    City Council voted on these two options as one would expect. Councillors in the core of the city did not want an elevated highway running through their neighorhoods, and the Councillors and people in the inner suburbs — who might use it for commuting — were by and large more accommodating. Apparently there are somewhere around 15,000 commuters who use it each rush hour.

    But here’s the thing.

    This vote took place in June 2015 and the thing still hasn’t yet been rebuilt. So maybe it’s not too late! Maybe there’s an opportunity to save a few hundred million dollars between us friends. Also, if anyone is interested, I’m still available for controversial Jane’s Walk presentations. One new idea I have is an elevated highway that runs through the inner suburbs and connects the best weekend brunch spots.

  • Community living rooms in New York City

    This is a great collection of third places or “community living rooms” in New York City. Simply speaking, a third place is any space where people hang out that isn’t their home and isn’t their place of work. Hence the third moniker. The most typical example is arguably the humble coffee shop. But what is clear from this thread list, is that a third place can take on many different permutations — everything from a bathhouse to an art library with the world’s largest collection of artist’s sketchbooks. What is also clear is that these are the kinds of spaces that really define a city. They create a sense of place, they give us community, and they help us with our sense of self — because they allow us to think things like, “I am the kind of person who hangs out and enjoys independent bookstores in the East Village.”

  • Real estate marketplaces are not like NFT marketplaces

    A lot less people are buying NFTs today compared to last year. But that’s okay, everything will be fine. So let’s talk about some of the characteristics of NFT marketplaces and how they differ from real estate marketplaces today:

    • When you create or “mint” an NFT, you are doing so on a particular blockchain, such as on the Ethereum blockchain. You might do that minting through a marketplace like OpenSea, but at the end of the day, your NFT now lives on a public blockchain and not on private OpenSea.
    • What that means is that if OpenSea suddenly decides to do something bad that you don’t like (I am in no way picking on OpenSea), you can simply stop using them and just access and trade your NFTs from some other marketplace. As I understand it, there are also lots of smart people working on blockchain interoperability.
    • Once you have your NFT on a blockchain, you can choose, through various applications, to list it for sale, run auctions with a reserve price, or just hold it and do nothing, among other things. You can also set it up so that any proceeds from a future sale are automatically split with someone else — maybe they are a co-creator of the NFT that you minted.
    • Whether you’ve decided to list your NFT for sale or not, there is also the option for the market to make unsolicited offers on it. It is up to you whether or not you’d like to accept any of the offers, but in all cases the offers you receive are made fully public to the market. As a bidder, it’s easy to hide behind “burner” wallets, but you generally can’t hide real intent.
    • If/when you do sell, that sale becomes public record for all to see. The blockchain never forgets and it doesn’t matter which marketplace you decide to use.

    In some real estate markets, it’s fairly easy to see the sales history of a property. But in other markets, such as here in Toronto, it’s still fairly gated. Generally speaking, you are accessing a controlled database and so you need to abide by whatever rules might be in place. If you want to build a new application on top of your local real estate board’s database, that is going to be tricky and it will likely involve more than a few lawyers.

    It is, however, fun to imagine how this might all change with public blockchains. And I think that NFT marketplaces do offer some clues in terms of what could happen to our real estate markets.

    Consider this potentially unexpected scenario:

    In the world of NFTs, there is something known as creator royalties. And they function just as you might expect. As the creator of an NFT, you can set a royalty % that gets paid to you each and every time the NFT is sold. And because the blockchain never forgets, you never have to worry about enforcing and collecting your royalty fee. It just gets automatically distributed.

    Now imagine a world where people like the architect and the developer of a new property are able to attach their own creator royalties. This would be massively cumbersome to administer today, but it’s entirely straightforward once you’ve got everything on a blockchain. And it would be a huge boon for business models that today do not benefit from reoccurring revenues.

    In theory, it might also better align interests, because if you’re a “creator” who wants a good solid royalty fee stream, maybe you’re a little more motivated to do good long-term work. Who knows? This model might never actually happen, but I do think it is indicative of the kind of changes and innovations that we might see as crypto continues to filter through the economy.

  • Consuming architecture

    Is this a true or false statement?

    “It is through media, of course, that we primarily consume architecture.”

    Witold Rybczynski recently spoke about this on his blog. Initially he thought it was a preposterous statement. But then he begrudgingly accepts that it is actually the case today. This in turn leads to an interesting distinction between what it means to experience architecture versus consume architecture.

    The former takes more time. You have to do laborious things like actually be in the space, walk around it, and generally just experience what it’s like to be there. Consuming, on the other hand, is much easier. Maybe it’s as simple as an image in your social feed that you forward to a friend so that they can in turn respond with a single fire emoji. Cool. Consumption done.

    Naturally this distinction translates into different ways of thinking about architecture. In the words of Witold, when you’re a consumer of architecture, you want to be “amused, titillated, and entertained.” You don’t have time for subtleties — things like tactile materials, historical references, light, and shadow. This is about consuming architecture.

    Now, I’m not sure if Witold has given any thought to what web3 and a mixed-reality future will mean for architecture, but it’s an obvious and interesting question. Intuitively, one would think that the more time we spend with digitally mediated experiences, the less time we will have to experience architecture the way nature intended it. Though maybe that’s not the way to think about this.

    I tend to be a bit more rosy about the current state of affairs and the future than Witold, but here are two points. One, consumption allows more people to interact with a piece of architecture. In fact, before writing this post I consumed Studio Gang’s recently completed project in Hawaii. It was nice, and maybe one day I will also experience it. That, I agree, would be even nicer.

    Two, architecture is always a product of the zeitgeist at the time. Part of its job is to reflect culture and, for better or for worse, speak to who we are as a society. And so if architecture has become effective at reflecting our current milieu, isn’t it doing exactly what it is supposed to be doing?

  • Dismantling the capital of neon

    You probably already know this about Hong Kong:

    Neon signs exploded in popularity in Hong Kong after World War II, when the city’s economy started to take off led by its manufacturing industry. As consumerism grew, neon signboards became the go-to format of advertising for all kinds of businesses ranging from restaurants to mahjong parlors to pawn shops. In an era where shopping mostly took place on the street level, the biggest and brightest signs got the most attention.

    But this component of Hong Kong’s aesthetic is rapidly fading. As recent as 2016, it was estimated that there were some 120,000 outdoor signboards, including neon signs, in the city. Today, thousands of neon signs are being removed each year in an effort to “clean up” the city. The result is that about 90% of the city’s neon has now been removed. (Here is an interesting visual essay from Google showing how the city has changed over the years.)

    However, it is also partially a case obsolescence. Neon is a dying craft now that we have technologies like LED. And so as sad as it may be, it’s hard to imagine a world where Hong Kong ever returns to its former glory as a capital of neon.

    Neon signs exploded in the post-war years, but most of them were illegal and I guess some were dangerous by virtue of there being no real enforced standards. But the British clearly didn’t care. Signs were good for business and good for capitalism. And so they let them proliferate. But then the handover to China happened, and it would seem that the Chinese care a little more about neon signs.

    But I think my favorite part of this story is that the origin of these signs is, of course, informal and utilitarian in nature. It was a case of one person erecting a sign and then a neighbor saying, “hey, your big neon sign is blocking my big neon sign, so I’m now going to make an even bigger and bolder neon sign. Maybe I’ll even hang it in the middle of the street.” The result was a self-organizing system that ended up creating, through no overarching plan whatsoever, a unique visual language for Hong Kong.

    That system is now being systematically erased. But lots of people are working to preserve its various artifacts and to celebrate its cultural legacy. These are all good things. But of course, there are other options. At the end of the day, Hong Kong’s visual language is not disappearing because neon is disappearing. It’s disappearing because we’ve decided that is what should happen.