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.

  • An undignified bus stop in Toronto

    I was driving to the office from the Junction last week, and I passed a brave individual waiting at this bus stop on Parkside Drive:

    I immediately thought to myself, “what an undignified and silly bus stop.” There’s a little bit of paving so you have a place to stand while you’re waiting, but how do you even get there?

    There are no sidewalks actually leading to said bus stop, and so you really only have two options: 1) jaywalk or 2) cross at some far away intersection and then walk unceremoniously on a narrow strip of grass and dirt on the side of a busy street.

    Not surprisingly, this was the first time I had ever seen anyone waiting at this stop even though I take this route all the time on my way to and from Junction House.

    I recognize that I was operating a motor vehicle when I saw this guy waiting for the bus. But I also took transit last week. And I know that we have it in us to do much better than what you’re seeing in the above street view photo.

    It’s also a reminder that while High Park is really great, we need to work on its edges. Both the urban edge that I’m describing above, and the built form that surrounds our magnificent park. High Park is an urban park, but we seem to be a little uncomfortable with that idea.

  • Forget infill development, why not just build entirely new cities?

    We talk a lot on this blog about how best to intensify and add housing to our existing cities. But here’s alternative approach: Why not just built entirely new cities? This way you don’t have to worry about fixing any of the things that are currently broken in our existing cities or worry about messy things like community engagement.

    Now, I disagree with many, or perhaps most, of the points that Nathan J. Robinson puts forward in the above Current Affairs article, but I think this is an interesting question to unpack. Robinson’s argument is that the main obstacle for building new cities in the US is ideological rather than technological. You need a bit more central government planning if you’re going to pull off a completely new urban center. And that’s not how things are generally done in the US.

    However, I think the real problem is that cities have powerful network effects that encourage centralization (even if some people are working from home). It’s easy to look at a large country like Canada and say to yourself, “but look at all that empty land. How could we possibly have a housing shortage?” The reality is that most of our land is empty and cheap because it has little value. The jobs are in our cities and that’s why Canada is a largely urban country.

    Indeed, this is how most cities have emerged historically. They start with some sort of economic purpose, be it an important trade route, access to resources, or some other driver of prosperity. It is for this reason that urbanists like Alain Bertaud will tell you that, typically, urban infrastructure follows the market, and not the other way around. Because who wants to live in a city with nice infrastructure but no jobs? More importantly, how long can a city without a strong economic purpose even last?

    Take for example Delhi. By 2030, Delhi is expected to be the largest city in the world. This has made it exceedingly difficult for the city to build enough new housing. So government there has been focusing on building new cities on the outskirts surrounding Delhi. These cities are referred to as “counter magnets”, and their purpose is to intercept and literally attract new migrants before they reach Delhi, thereby relieving some of the urban pressures on the capital.

    The fact that these cities are referred to as “counter magnets” speaks to exactly my point about centralization. It is recognition that Delhi is by far the biggest urban magnet. Because of this, these satellite cities haven’t been as successful as everyone had initially hoped. Migrants seem to still want Delhi. You can build new housing, but without jobs and economic opportunity, people will continue to flock to the biggest urban magnets.

    So sooner or later, you’ll need to fix what isn’t working.

    Photo by Ravi Sharma on Unsplash

  • Over $26 trillion in US homeowner equity

    Last year was a pretty good year for people who own a home in the US (or in Canada and many other places). Current estimates peg the total value of US residential real estate at somewhere around $40 trillion.

    But of course, a lot of this real estate has debt on it. The Federal Reserve considers this in their calculation of “homeowner’s equity,” and so the net number, as of the end of last year, was just over $26 trillion (see above chart). This is up from about $10 trillion in 2012, following the financial crisis.

    Not surprisingly, a lot of these gains are accruing to a pretty specific demographic. According to City Observatory, about 67% of residential real estate in the US is owned by non-Hispanic white people. And about 44% of owners are 55 years or older.

    Oddly enough, this also happens to be a demographic group with a disproportionate say over the kind of new housing that we’re allowed to build in our cities. Scarcity is a very good thing when you already have and own some.

  • The infamous 45-degree angular plane

    The Toronto mid-rise housing typology is known for architectural forms that often end up looking something like this:

    The reason for this is the infamous “45-degree angular plane” that gets applied when new developments abut low-rise residential neighborhoods. It is a way to transition down and mitigate some of the impacts associated with this kind of infill development — usually the concerns are overlook, privacy, and shadowing.

    These are, of course, legitimate concerns. But here’s the other side: Should we really be reducing the number of homes that we can build on our main streets by carving away area like this? Is overlook and shadowing more important than additional housing? Stepping buildings like this also makes constructing them more expensive and cumbersome. Are higher costs the goal?

    It is for reasons like these that some people have been paying attention to the new Danforth Avenue Planning Study that went to Toronto City Council this week. Among other things, the study recommended the relaxation of the 45-degree angular plane standard along a portion of the Danforth.

    This is certainly a step in the right direction. But in my humble opinion, it’s not nearly enough for an area that will ultimately sit at the intersection of two subway lines.

  • A mapping of US rental housing rents, scraped from Craigslist

    https://twitter.com/mnolangray/status/1511098796364632067?s=20&t=tX0MTFB9wZyb6rKAGEFM7w

    This is an interesting way of seeing rental housing rents (national scale). And there’s a lot that you can glean from a mapping like this. But it’s also interesting in that what you are seeing here is a visualization of some 11 million Craigslist rental housing listings (taken from this study). The authors refer to it as a “nontraditional source of volunteered geographic information”, and they argue that it’s probably more granular and real-time than what is typically available when it comes to rental housing. That sounds right to me.

  • [Video] Are NIMBYs selfish?

    Peter Baugh tweeted this out on Monday. Essentially, he attended a community meeting for a new housing project in his neighborhood. He spoke in favor of the proposed development. And was then accused of being a developer shill. His comments were subsequently no longer allowed at this “public” meeting. I mean, how could anyone possibly be in favor of new urban housing? Surely he must be a developer “plant.”

    This is wrong, disappointing, and a whole host of other unsightly things. So today I thought I would share a recent City Beautiful video that asks: “Are NIMBYs selfish?” I have shared Dave Amos’ videos before. He’s an assistant professor of city planning at Cal Poly and a well known YouTuber. And I think this video does a great job explaining some of the tensions and trade-offs at play when it comes to development, particularly infill development.

    But as Dave clearly explains in the video, he is not a neutral actor when it comes to this topic. His view is that, yes, NIMBYs are selfish.

  • Twitter > Instagram

    If I had to pick only one social network to use, it would be Twitter. I, of course, also enjoy Instagram because I like taking photos. But if I had to pick one, it would be Twitter.

    I just find that Instagram is more about passive consumption (like watching TV), whereas on Twitter I’ve found a way to actively engage in productive discussions around the topics that interest me — everything from real estate and architecture to NFTs and photography.

    The crypto community is also very centered around Twitter. I haven’t looked at the numbers, but I would think that NFT activity has been, or at least should be, a boon for the company. That said, Twitter has never really been a great business and public company.

    But maybe that changes now that Elon Musk has become its largest shareholder with a 9.2% stake in the company (currently valued at a few billion). The stock jumped over 27% today. Or maybe it doesn’t change at all and this is just a fun side hustle for Elon.

    Here is a typically funny explanation from Matt Levine introducing what just happened:

    Look this all makes complete sense, obvious, intuitive, simple sense. If you are the richest person in the world, and annoying, and you constantly play a computer game, and you get a lot of enjoyment and a sense of identity from that game and are maybe a little addicted, then at some point you might have some suggestions for improvements in the game. So you might leave comments and email the company that makes the game saying “hey you should try my ideas.” And the company might ignore you (or respond politely but not move fast enough for your liking). It might occur to you: “Look, I am the richest person in the world; how much could this game company possibly cost? I should just buy it and change the game however I want.” Even if your complaints are quite minor, why shouldn’t you get to play exactly the game you want? Even if you have no complaints, why not own the game you love, just to make sure it continues to be exactly what you want? The game is Twitter, the richest person in the world is Elon Musk

  • Destructive development?

    Planner Sean Hertel shared this (embedded above) on Twitter over the weekend. It is a lawn sign from Toronto’s Junction neighborhood that is calling for a stop to demolishing family houses for high rises.

    From what I can tell, this law sign is trying to communicate a few key messages.

    One, high-rises are monstrous beings that enjoy praying on innocent low-rise houses and squashing them with their feet, and sometimes their asymmetric hands.

    Two, it is mostly impossible to conceive of a world in Toronto where families live in high-rises and don’t live in grade-related housing with a backyard.

    And three, there is little value in building more, rather than less, housing in order to help with affordability concerns. Perhaps the thinking is that it needs to be low-rise affordable housing, or nothing.

    With all of this said, let’s do a little thought exercise today on the blog.

    Let’s for a second assume that there aren’t any high-rises proposed in the Junction; only European-scaled mid-rise buildings that sit on the area’s main avenues and back onto low-rise single-family neighborhoods. Let’s also assume that these buildings will be sculpted in complete deference to their rear neighbors so that things like shadows are minimized.

    Let’s assume that more housing is better than less housing.

    Finally, let’s assume that, get this, noble families may actually be able to live in mid-rise and high-rise buildings. And that there are already many successful examples of this taking place in the city, such as over here in CityPlace.

    What key messages would this lawn sign be then communicating?

  • Mass timber construction next?

    We poured the last section of our level 4 slab at Junction House yesterday. As I was leaving the site, I tweeted this photo out from Watkinson Avenue. What you are seeing is the northwest corner of the building where we have seven two-storey towns that front onto our rear laneway. In response to this tweet, Andrew Williamson asked a most excellent question: “timber next?”

    My response was that we would love to do a mass timber building. We have certainly looked at it in the past, and we will continue to look for opportunities to use more sustainable building materials wherever possible. But there are challenges to overcome and a project like Junction House would have been far more difficult to do in mass timber. I’m not an expert when it comes to wood construction, but I will offer up three items that have come up for us in the past.

    The first is trade familiarity. We are in a highly inflationary hard cost environment right now. Everyone is hyper focused on costs and the market is competitive. So switching to a construction method that is less common comes with some additional risks. But this will almost certainly change over time as the market evolves and more people adopt mass timber.

    The second is water. The Junction area, or at least parts of it, have a relatively high water table. That is certainly the case with our site. One of the things you need to do during construction is dewater, or draw down the water level within your site so that you can actually build. In our case, we built a watertight below-grade parking structure, though that isn’t always the case.

    Dewatering comes at a cost and so generally you want to stop dewatering as soon as it is feasible to do so. But you need to make sure that you have enough weight to counteract the buoyancy forces associated with groundwater returning to the site. Generally this means you need to wait until you’ve finished constructing a certain level in the building so that there’s enough mass. The engineers will say things, “we can shut off the dewatering once we complete our level 4 slab.”

    The thing to consider with all of this is that concrete is heavier than wood, which means that you may need to run your dewatering program for longer (increasing your costs). Or, if your building isn’t all that big, maybe you’ll never have enough weight to offset the below-grade water forces and so you have to look at other methods for keeping your building from floating away. Again, this will increase your costs.

    The last thing I’ll mention is that mass timber buildings generally have higher floor-to-floor heights compared to cast-in-place concrete. What this means is that a 9 storey building in timber is going to be taller, in meters, compared to a 9 storey building in concrete — even if the clear heights within the suites are the same. This is a massive deal when you’re operating in an environment that is highly sensitive to building height.

    In the case of Junction House, we were negotiating our final height in centimeter increments — literally arguing whether it could be 50cm to 1.3m taller than some perceived maximum height. This is, in my mind, absurd, but it became a hill that people were willing to die on. The result is that our laneway towns (pictured above) went from having an entrance that was a few steps up off the lane to having an entrance that is now a few steps down off the lane. That is how we ultimately solved our centimeter problem.

    This wounded me to my core because, at the end of the day, what are people going to remark: The additional meter at the top of the building or the relationship that these towns will now have to the street? It will, of course, be the latter. So please know that our hearts were in the right place. But what this also means is that had we been trying to build in wood, we likely would have lost a floor during this negotiation and that would have killed the entire project.

  • Zoned housing supply vs. actual housing supply

    This Twitter thread by UC Davis Law Professor, Chris Elmendorf, is a good reminder that there can be a meaningful difference between actual completed homes and zoned land that might one day becoming new housing.

    The point he makes is as follows: The state of California’s housing needs allocation for the city of San Francisco is approximately 80,000 new homes over the next decade. In the past, cities could demonstrate that they were able to meet these targets through, as I understand it, some fairly loose assumptions. But more recently, amendments have made it such that the probability of new homes actually getting built needs to be considered.

    San Francisco has been doing this and, according to Chris, the conclusion was that the city should upzone portions of the city — primarily on the west side — to allow for some 22,000 new homes. Sounds cool. But as part of this process, the city also hired an outside consultant to run indicative pro formas and assess overall development feasibility. This is what they found:

    I haven’t seen any of the actual numbers, but what this chart is saying is that nobody is going to develop on the west side of the city no matter what entitlements you put in place (tier 3 and tier 4 market areas). The only new development that is likely to take place is high-rise development over 24 storeys in the highest value submarkets (tier 1 and tier 2 market areas).

    Based on this, the 22,000 new homes figure is probably closer to 0 new homes.