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 great housing supply debate continues

    The great housing debate continues: Are we building enough housing, or are we not?

    Right now the media is talking about a new report from the Union of B.C. Municipalities, which is claiming that cities in British Columbia are actually building enough housing to keep pace with population demand.

    Between 2016 and 2021, the province’s population grew by 7.6% and the number of new dwellings grew by 7.2%, according to the report. So supply appears to be lining up with demand.

    One problem with this robust analysis is that many people, including the Housing Minister, don’t agree. Here’s an excerpt from the Globe and Mail:

    “The overly naive analysis comparing housing to population growth to declare the adequacy of our housing supply fails to understand that housing and population growth are intimately related,” said statistics analyst Jens von Bergmann, a regular decoder of housing statistics for Vancouver and Canada. “It’s a slap in the face of those who have been pushed out, or those who failed to move here, because of the unavailability of housing.”

    And on a related note, here is a recent piece by Shawn Micallef (Toronto Star) talking about why the left can’t get Toronto’s housing right.

  • Shrinkflation in the housing market

    We all know that inflation is a thing right now. Prices are rising. One way businesses can choose to respond to this is through something called “shrinkflation”, which the Financial Times writes about here. The idea behind shrinkflation is that, instead of just raising end prices to absorb higher costs, you instead shrink or reduce your product or service offering. Of course, you could also do a combination of both things: increase your price and shrink your offering.

    This shrinking can take many forms. A few less chips in your bag. A slightly smaller chocolate bar. Smaller food portions at the restaurant. Or maybe opt-in room service for your hotel room. It can also take the form of less space. Average apartment sizes in most big cities have trended downward over the years for this exact same reason. Developers are working to maintain some kind affordability in the face of rising costs.

    I think a lot of people like to scoff at these sorts of practices. Why can’t we just build bigger family-sized suites? But the reality is that it is being driven by real market constraints. Without something giving, like suite sizes, urban housing would be multiples less affordable compared to current levels. The developers I know don’t have any sort of deep-rooted philosophical aversion to selling 5,000 square foot estates in the sky. The problem is simply that most buyers and renters won’t like the sticker price.

  • Per buildable square foot

    Let’s say that you were comparing and thinking about buying two different pieces of development land. Both are about 25,000 square feet in size, but one is priced at $5 million and the other is priced at $50 million. If you were to calculate how much you were paying per square foot of actual dirt, you might conclude that the $5 million parcel is the cheaper one.

    But as we have discussed many times before on the blog, the value of development land depends on what you can build on top of it. So what matters more is the price per buildable square foot. And to calculate this, you simply divide the purchase price by the allowable gross floor area (GFA) on the site (or, in many cases, the GFA that you believe is likely achievable on the site).

    For example, if you could build 50,000 sf on the $5 million parcel and 500,000 sf on the $50 million parcel, both sites would have a price per buildable square foot of $100. This makes them, in theory, equal, assuming all other things are equal. That said, one could argue that 50,000 sf is maybe too small of a build, and so the $50 million lot is actually a better buy because you can hope to achieve some economies of scale.

    Of course, if you could build even more than 500,000 sf on the one lot, then your price per buildable square foot would come down even further and that would make it the more attractive site (again, assuming all other things are equal).

    There are a lot of other details to consider when evaluating a development site. Maybe the $5 million one actually has a bunch of environmental contamination that will cost you an additional $5 million to clean up ($10 million in total costs). In that case, your price per pound would actually be double the other lot, assuming the other parcel doesn’t have any contamination or other factors that might impair value.

    Permitted uses also greatly affect value, with residential often being the most valuable kind of urban density. And so this is ultimately why you need to create a full and detailed pro forma in order to properly evaluate a new development opportunity. But even before you get to that stage, you can tell a lot with just the price per buildable square foot. If you know the market, you’ll usually know right away if it’s too high or if it’s an opportunity that may be worth exploring.

  • Quietly booming tech town

    We have all seen these headlines before, so it’s not so under the radar for us. But the New York Times just published this article about Toronto calling it a “quietly booming tech town.” Depending on how you want to measure things, Toronto is now the third largest tech hub in North America after Silicon Valley and New York City (or at least that’s what the NY Times is telling me). The article touches on some of the ingredients for this success, but let me be a bit more explicit in this post because I think it is particularly relevant right now.

    Canada is a “Western” country. What does that mean? It means that we’re a democracy, we have the rule of law, we respect individuals (including private property), and we allow for pluralism of opinion, along with many other freedoms. These are all wonderful and magical things that are sometimes taken for granted. But I couldn’t imagine living in a place that doesn’t allow for such freedoms, nor would I want to.

    On top of this foundation, we have two other important ingredients: extraordinary universities, like the ones mentioned in the article (University of Toronto and University of Waterloo), and some of the most liberal immigration policies in the world. Our borders are open for the smartest and most ambitious. With just these handful of things — freedom, rules, education, and talent — we can screw up a lot of other stuff and still accomplish some pretty great things. I may be oversimplifying, but probably not by much.

    Humans are wonderfully talented. Let people be and they’ll show you. Because history has shown us time and time again that the above recipe works remarkably well. (Related post: Do the best cities have a lot of immigrants?)

  • Project Profile: Social housing in Vienna by trans_city architecture

    I stumbled upon this multi-unit housing project in Vienna because I thought it looked beautiful and I started thinking about the solid wall-to-window ratio on its facades. But it turns out that this project is far more than just a pretty face.

    It’s actually a social housing project on the outskirts of Vienna, where the city transitions into the countryside. And it incorporates a number of interesting design features:

    • The complex is heated using groundwater heat pumps (geothermal) and domestic hot water is provided with the help of rooftop solar panels.
    • The structural system consists of concrete slabs and columns (no shear walls) and was all poured in place. But the envelope consists of “prefabricated thermo-brick walls” which were craned into place (see below image). The curving balconies also look to be prefabricated elements.
    • The suites have been designed with a saw tooth pattern and the circulation mirrors this through a zig zagging pattern. The result is units that are akin to what you will find at King Toronto (Bjarke Ingels), though on average the suites here look to be bigger than what we typically design in Toronto.
    • The zig zagging corridors also incorporate skylights that let light down into the middle of the building. I think these run through multiple floors as well, and not just through the top floor of the building.

    This certainly looks like a nice place to live.

    Sources: Architecture by trans_city (Christian Aulinger, Mark Gilbert). Photography by Daniel Hawelka and David Schreyer. Both via ArchDaily.

  • Toronto should light the underside of the elevated Gardiner Expressway

    Back when Toronto was debating the future of the eastern portion of the elevated Gardiner Expressway, I was an annoying and vocal supporter of tearing it down and replacing it with an at-grade boulevard. I was blogging about it ad nauseam. I participated in Jane’s Walks where I spoke about the merits of removal. And I even created a petition that went to City Council the day the decision was being made.

    But throughout all of this, I felt like I was in the minority. Most people said I was crazy (though former mayor John Sewell agreed with me). How will people and services get to downtown Toronto? This is critical infrastructure, they said. And indeed, Toronto voted not to remove it.

    Whatever you feel was the right decision at the time, that ship has sailed. We tore down a leg of the Gardiner east of the Don River, at that was positive; but the rest of it is either staying intact or being relocated. In both cases, it will be elevated.

    But I believe in looking forward, not backwards. And so with that, I think we should be doing everything we can urbanistically to make the Gardiner as nice as it can be. It is for this reason that I think The Bentway is an extraordinarily important project. And it is for this reason that I wish we would light the underside of the Gardiner so that when you’re driving on Lake Shore it makes you feel happy.

    https://twitter.com/donnelly_b/status/1505154810898747393?s=20&t=usv80T-GppjpvEfCVgQUTQ

    A good example of this in action is the Yan’an Elevated Highway in Shanghai (greenery, of course, also helps):

    https://www.instagram.com/p/BzvTmo3nN2J/?utm_source=ig_web_copy_link

    Relevant scene from Skyfall (James Bond):

    But let me be clear before my inbox lights on fire: I am not suggesting that this is an approach to urbanism that is in any way desirable or worth emulating. I am not advocating for elevated highways running through the middle of dense downtowns and walkable city centers. All I am saying is that if we are stuck with something as dreary and as utilitarian as the Gardiner Expressway, the least we can do is make it kind of cool. And lighting can be a relatively cost effective way of doing that.

  • Kaunas — European Capital of Culture

    So each year Europe runs a program called the European Capitals of Culture. The objective is to celebrate the richness of European culture and presumably drive throngs of tourists to its various locales. They do this by choosing a set of cities, designating them “capitals of culture”, and then running events and programming all throughout the calendar year in those places.

    When the program was created in 1985, it was originally called the European City of Culture, as there was only one city being chosen at a time. In the first year that city was Athens. But the program has since evolved and now multiple cities are chosen each year. For 2022, the European Capitals of Culture are Esch-sur-Alzette (Luxembourg), Kaunas (Lithuania), and Novi Sad (Serbia).

    I was reading about Kaunas in FT this morning and I was fascinated to learn that this city of approximately 300,000 people has some 6,000 modernist buildings. Some are apparently in disrepair, but many remain in good form and, as part of the festival, visitors can book stays in some of the restored ones.

    There is, of course, an interesting story behind these buildings.

    This collection of modernist buildings is the result of a relatively narrow window of time and a specific set of circumstances. Lithuania gained independence from the former Russian Empire in 1918, following WWI and while Russia was busy fighting with itself. But at the time, its capital city Vilnius, which remains the capital today, was mostly occupied by Poland.

    So Kaunas became its temporary capital city from 1920 to 1939, the latter date being when Vilnius was returned to Lithuania. This temporary designation created a tremendous need for new buildings, both public and private, and it just so happened to line up with the flourishing of European modernist architecture.

    Kaunas didn’t get any modernist “icons” from architects such as Le Corbusier, but there’s absolutely nothing wrong with that. Kaunas instead created its own varietal of modernism, one that incorporated elements of Art Deco and one that you could argue is now deeply symbolic of a very important moment in its history: A peaceful period of interwar freedom and optimism.

    Image: Kaunas 2022

  • Sustainable living means living in a city

    The UN’s Intergovernmental Panel on Climate Change (IPCC) has just published its latest climate change report. Available here. As a follow-up to this report, Dezeen spoke with Hélène Chartier of the sustainable urbanism network C40 Cities. And she makes some very good points about the importance of cities in combatting climate change.

    In fact, she goes so far as to say that sustainable living is only really possible, at scale, in cities. Because to live a more sustainable lifestyle, you need the right kind of infrastructure in place. And to have the right kind of infrastructure in place, you need density.

    This crucial point is often forgotten (though never on this blog). If you are truly concerned about climate change, then you should be for urban density. And if you are out there fighting against urban density, then your actions are undermining this global imperative.

    Chartier rightly points out that “architects have a huge responsibility” when it comes to addressing climate change. And this is entirely true. Their job is the built environment. But with all due respect to architects, the problems that need solving are ultimately much broader. Architects can only do so much if they’re hamstrung by dumb land use policies and angry neighbors, among other things.

    This needs to be a coordinated effort. We all have a huge responsibility.

    Photo by Kaspars Upmanis on Unsplash

  • High-rise urban families in Toronto’s CityPlace

    The narrative in this fairly recent FastCompany article about Toronto’s CityPlace neighborhood is that the area was initially planned and built for young professionals who wanted to be close to work and party. But that it has since evolved to become a more mixed residential community. Over time, the young professionals started having children and now the area is filled with a surprising number of urban families. “Hundreds” according to FastCompany. In response to this shifting demographic, the Canoe Landing Campus was recently completed, containing a community center, two public schools, a public park, and childcare facilities. And apparently it was long overdue.

    This is interesting for a few reasons. CityPlace has long been criticized for its planning. Local Toronto lore has been that the area was destined to become a slum. But is that actually playing out? Anecdotally, it would seem that families are sticking around (and being attracted to the area) and that it’s settling in nicely as an urban residential community. In fact, I wonder if CityPlace might be emerging as one of the areas in the city with the highest concentration of high-rise urban families. I quickly tried to find some data on this but couldn’t.

    Something else worth pointing out: One of the objections that you’ll often here when it comes to new development is that there isn’t the infrastructure in place to support it. Where are the schools? Where are the community centers? And where are the hipster coffee shops? Because without these invaluable things, development should be stopped immediately. Now I’m not suggesting that these things aren’t important. But the CityPlace example is yet another reminder that cities and neighborhoods evolve — often in fortuitous ways. The best city building is nimble and entrepreneurial.

  • San Francisco now has autonomous vehicle taxis

    These are two short videos of autonomous Cruise vehicles driving around San Francisco. Cruise, which is owned by General Motors, received a permit from the state of California to operate autonomous vehicles — without a safety driver — in September of last year. In November 2021, one of the cofounders of Cruise took the first ever driverless taxi ride in the company’s history. And on February 1, 2022, Cruise announced that it was opening up to the public.

    If you read the comments on Twitter you’ll see that some people have found these vehicles to be hyper reactive to traffic lights and to do oddly long pauses at stop signs. So I guess they’re not perfect. But oddly long pauses are certainly better than not stopping at all. Either way, this is a big deal. I’m not sure if these are the first unsupervised autonomous vehicles out in the wild, but they are easily some of the first.

    There has been a lot of discussion over the last few years about autonomy being a hugely tricky technical problem to solve. One that is perhaps more difficult than a lot of people thought it would be at the outset. I’m assuming that this is at least one of the reasons why ridesharing companies like Uber and Lyft ended up selling off their AV divisions while searching for profitability.

    But the market never gave up and it’s pretty exciting to see this coming to fruition. Oliver Cameron is VP, Product at Cruise and the former CEO of Voyage (which was acquired by Cruise last year). If his tweets (above) are any indication, San Francisco is going to be seeing many more autonomous vehicles in the coming months.

    This is going to have a profound impact on the unit economics for ride sharing companies like Uber, but more importantly it is likely to have a profound impact on our cities. Mobility innovations have a way of doing that. Some of the impacts might be negative, but I believe that many of the impacts can and will be positive.

    As most of you will know, I am a believer in dense and walkable cities. I do not believe in planning cities around cars. And so that is not what I am advocating for here. My view is simply that I think autonomy grants us the ability to rethink our definition of a “vehicle.” And maybe it becomes something that more closely resembles public transit. That could be a positive thing for our cities and something that draws people away from private vehicle ownership.

    So I remain both optimistic and excited about what’s to come.

    Have any of you had a chance to ride in an autonomous vehicle? If so, leave a comment below or on Twitter.