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.
Bullpen Consulting just released its latest land insights reports for the Greater Toronto Area. For the period of Q2-2022, Ben Myers and the team identified 46 high-density residential land transactions with an average price of $95 per buildable square foot. This is down from $112 pbsf in Q1.
In the core of the city (former City of Toronto), the average price for Q2-2022 was $135 pbsf. In North York it was $103 pbsf. And in Scarborough it was $50 pbsf. Overall land prices are down about 15% from last quarter (though it’s important to note that quarterly transactions can represent a relatively small sample size).
We have spoken before about how land prices tend to be fairly sticky in the face of changing cost structures. But what we are seeing right now is a bit of a perfect storm:
Hard costs have seen double digit increases (with some inputs increasing by 30-40%)
Inclusionary zoning is on the horizon and will add another additional cost to new housing
And rising interest rates are both increasing project costs (higher interest charges) and slowing the macro economy
All of this is naturally causing developers to be more cautious when it comes buying new land. And we are seeing that in the above pricing. But at the same time, this dip in pricing is not going to be enough to absorb all of the additional costs that new housing projects now face in today’s market.
If you’d like to download a full copy of Bullpen’s report, click here.
This an interesting discussion about Adam Neumann’s new startup Flow (which I recently wrote about here).
More specifically though, the discussion is about venture capital firms backing “failed” entrepreneurs, and whether or not Flow can really be that much more valuable than your typical apartment REIT.
In its simplest form, Flow might just end up being an apartment company with a strong national brand and a consistent resident experience. But maybe that’s all it needs to be.
If the link doesn’t already do it for you, jump to the 7:19 mark to start with this discussion. After Flow, the podcast moves on to housing policy in the Bay Area, Houston, and Miami. So you may also want to stick around for that.
One of the most extraordinary things about Salt Lake City is that you can land at its airport and then, in 20-30 minutes, you’re in the mountains looking at landscapes like this:
By my estimation, this makes it the most accessible big city and mountain town combination in North America.
Historically though, Salt Lake City hasn’t really been known for modern architecture. There is, of course, one glaring exception and that is the work of architect John Sugden.
Sugden was originally from Chicago, had trained under Mies van der Rohe, and is credited with bringing a similar kind of International Style to Utah.
The house pictured above is one of Sugden’s projects.
I’m not sure when it was originally built, but it was meticulously renovated by Brent Jespersen, and featured in Dwell magazine back in 2009. If you’d like to take a closer look, click here. (It is again being renovated right now.)
When I was researching who in Salt Lake City and Park City was building cool stuff, Brent’s name immediately came up. So I appreciate him taking the time to tour me through some of his projects this evening. Thank you, Brent.
What is now clear to me is that this whole not being known for modern architecture thing is quickly going away.
Today’s post is a question for all of you: What would you say are the coolest and most remarkable boutique hotels in the world right now?
What is clear to me is that travel (and flexible work) will continue to be a growing market and that there is demand for a variety of different hospitality offerings.
Sometimes people might want to stay in an Airbnb (which is usually a property owned by an individual or individuals).
Sometimes people might want to stay in a branded and/or membership-based rental such as a Sonder or a Wander (which, in the case of Wander, is a collection of properties owned by the same company).
And sometimes people might want to stay in a tried-and-true hotel.
I think that all of these offerings serve different needs. And at the end of the day, I don’t believe that Airbnbs, or whatever permutation they take, will ever replace the best hotels. There are things you can get in a hotel that you can’t get elsewhere.
So today I am hoping to crowdsource some of the best examples from all of you. Thanks in advance for any ideas you might send over.
This might seem like a fairly benign tweet by Clive Doucet, a former Ottawa City Councillor. I mean, Paris is wonderful. It is livable, walkable, and my favorite city in the world after Toronto. But as I have argued many times before on the blog, there is a tendency to look at Paris’ uniform mid-rise buildings and then incorrectly try and translate it over to a North American (or other) context with opinions that we should simply cap building heights. Because if only we were to do that, then we would be left with our own version of beautiful Paris.
This is false. And you should immediately call bullshit on anyone who suggests this might be the case. It ignores most of what Napoleon III and Haussmann did to Paris in the 19th century, and instead just cherry picks height so that it can be exported back home to oppose tall buildings. If we really and truly want Paris, then it is important to be reminded that, among many other things, the Paris we all love today is the result of:
The annexation of eleven surrounding communities (in order to form the city’s current boundaries)
Mass urban renewal, involving the displacement of some 350,000 people (according to some estimates at the time)
Nearly two decades of large-scale disruptive construction
The demolition of hundreds of old dilapidated buildings (some of which may have even been in a Heritage Conservation District — bad planning joke)
The cutting through of nearly 80 kilometers of new avenues all across the city
The building of high-density courtyard buildings and blocks
As you might suspect, Parisians at the time were upset with this kind of large-scale change. The now famous Impressionist painters lamented the new monotony of Paris’ regular mid-rise blocks. Where had the unique and quirky Paris of past gone? It was, of course, being systematically erased in the name of modernization and urban renewal, which by the way, included a new and important water and sanitation network. What Napoleon III and Haussmann did was transform Paris from a crumbling medieval city into a modern metropolis.
I am not suggesting that any of this is bad and shouldn’t have happened. Today, Paris is deeply loved the world over. But what I am suggesting is that if we truly want to create our own version of Paris, then we are going to need to be realistic with ourselves on what it is going to take to get there. It will require nothing short of massive change.
If we want Paris and Paris-like densities (despite what Clive posits in his tweet, Paris is not the densest city in the world), we are going to need to be fully prepared to rip up and rethink our entire approach to zoning. Taller buildings are partially (largely?) a result of our cultural obsession with single-family houses. We restrict supply, codify low-densities, and then wonder why the remaining areas need to be so tall. We then grasp at out-of-context examples in order to justify our own selfish interests.
If Paris is really what we want, then we must be prepared for everything that comes along with its pretty mid-rise buildings. Are you ready?
We have talked about this before on the blog, but wineries continue to be a great leading indicator for our changing climate. Above is a chart from the Financial Times showing the official start dates of vendange for two wine regions in France. The Champagne region is further north and so the harvest dates naturally tend to be a bit later compared to the Rhône region. But in both cases, we seem to be seeing a shift to about a month earlier: September instead of October and August instead of September. And the turning point, at least according to this data, appears to have been 1987. The winemakers interviewed in this article appear confident that they can continue to adapt and find ways to deliver wonderful bottles of wine. But of course, that is not what you should be worrying about when you see this chart.
One of the characteristics of streets is that once you lay them out, they tend to be fairly permanent. This can be a benefit when you get it right, like in the case of Manhattan’s celebrated grid plan. But it can be a real challenge when you get it wrong, or when you’ve designed them around a particular use and you then later decide that you want something different. In my view, one of the greatest city building challenges around is trying to take a place that was designed exclusively for cars and turn it into a place that is designed for pedestrians. That said, the above video by Spin is a great reminder that there are lots of things that can be done, and in some cases they don’t necessarily need to cost a lot of money. In this video, they transform an intersection in Salt Lake City into a safer and more enjoyable place for pedestrians and for people riding bikes and scooters.
The development team at Slate Asset Management is again hiring for our Toronto office. We are looking for a coordinator to join the team and gain exposure to all aspects of our projects — everything from acquisitions to construction and close-out.
For those of you who maybe aren’t familiar with all of our projects, feel free to check out Slate’s website or the “Developments” menu on this blog.
We are always open to a variety of backgrounds; however, for this role, our ideal candidate would be someone with a bit of a design and/or construction background. Though I would encourage you to apply even if you don’t feel like you fit this description.
Broadly speaking, our ambition with all coordinators is to have them quickly take on more responsibility and ultimately lead a portfolio of their own development projects. If this sounds interesting to you, the best way to apply is over on LinkedIn.
Please also feel free to reach out to me directly if you have any questions about the opportunity.
According to this recent New York Times article, California is set to put into effect a new mandate that would require 100% of passenger vehicle sales in the state to be fully electric by 2035. Included within this mandate are also interim targets: 35% of all sales by 2026 and 68% of all sales by 2030.
When I first read the article, my first thought was: “Isn’t 2035 kind of far away? Can’t we do this sooner?” And this is usually how my mind works when I see some date in the future. But then I remembered that EV sales last year in the US only totaled somewhere around 5% of all sales.
So there is work to be done, and mandates like this will certainly help. As I understand it, this will be the first mandate of its kind in the US and also one of the strictest in the world. A lot of other countries have simply set targets, rather than all-out bans.
This is what it means to lead. You do things before others.
