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.
And for those of you who don’t celebrate, I hope you have a relaxing day with family and friends. We’ll be making pancakes, because that’s one of the things that we like to do on Christmas morning.
This time last year I think a lot of us thought that the world would feel far more normal by now. We’re not in total lockdown like we were, but we are also not back to normal. And that is impacting our ability to be with some loved ones in the ways that would normally be possible.
Prior to this pandemic, we had also made a point of traveling during the holidays. This is that one time of the year when you can truly disconnect, explore the world, and not feel any anxiety every time you pick up your phone and see your inbox. That is obviously a challenge right now.
But these realities are no reason not to be grateful for this holiday season and to be hugely optimistic for the year ahead. We will be doing both of these things while we enjoy our Christmas pancakes. If any of you have any Christmas traditions of your own, I would love to hear from you in the comment section below.
P.S. The image at the top of this post is my CryptoBabyPunk NFT (#660) all dressed up for Christmas.
Some people, okay a lot of people, used it as an opportunity to be tongue in cheek and respond with things like: cheaply built condos, boarded up Starbuckses, Hooker Harvey’s, Drake’s house in the Bridle Path, the crumbling Gardiner Expressway, and that McDonald’s at the northwest corner of Queen and Spadina (this one is no longer a contender for me now that they’ve gotten rid of their walk-up window).
Of course, there were also a lot of the usual suspects: The Sky Dome, The Gooderham Building (our miniature Flatiron Building), Casa Loma, The Royal Ontario Museum (specifically the expansion by Studio Libeskind), “New City Hall”, The Royal York Hotel, Honest Ed’s, The St. Lawrence Market, Robarts Library (University of Toronto), and a bunch of others that you might find displayed on the seat screen on your next Air Canada flight.
But I’d like to unpack the initial question a bit more. Because what does it really mean for something to be a symbol of a city? And is there an important distinction between the symbols that resonate with locals on a personal level and the symbols that get exported around the world as a city’s brand and identity? Indeed, one of the criteria in most global city rankings is a prominent and recognizable skyline. Icons are important.
Let’s consider an example. I agree entirely with Sean Marshall that “New City Hall” is a deeply symbolic building. Built in the early 1960s after decades of work, New City Hall was the outcome of an international design competition. And it was decidedly modern at a time when Toronto really wasn’t that modern. Montréal was the biggest and most global city in the country and multiculturalism hadn’t yet become a federal mandate. And so New City Hall symbolized our genuine ambitions to becoming something more.
But does the rest of the world care? If you were to ask somebody my question on the streets of Rio de Janeiro or Tokyo, what would they say? What would they remember? The thing about most tall buildings or other city symbols is that they become abstractions. They turn into pictures on social media — like logos of a company. But maybe that’s all we can reasonably ask of the world. Maybe all that really matters is that a symbol has local significance; it’s then up to us to export it and tell that story to the rest of the world.
Last night as I was walking home, I came across the recently completed Yonge + Rich condominiums at Richmond and Victoria (I think they won awards for this name back in the day). I stopped to look up because I was curious about one particular detail — the elbows.
This tower is, in effect, two towers that are attached in middle. And the differing facade treatments are meant to reinforce this: two towers, not one.
But because they are in fact connected, there are some unavoidable 90 degree angles in the floor plates. These spaces can be extremely tricky when it comes to laying out residential suites because they skew your ratio of square footage to vision glass. Usually you get too much of the former relative to the latter. You can also get awkward facing / privacy conditions.
And so these spaces are often referred to in the industry as the “elbow” suites or sometimes the “armpit” suites. Though I think elbows are a lot nicer than armpits.
Here’s the Yonge + Rich example to illustrate what I’m talking about:
In this case, the entire stack is comprised of frosted translucent glass. So it is pretty clear that these spaces are not residential suites. Here’s the floor plate:
What was done here was to make it circulation/corridor space. This solves the elbow suite problem and adds a nice feature to each floor. These days, very few corridors have natural light. Vision glass is too precious of a commodity. You could argue that it should have been clear glass, but presumably frosted glass was used to avoid privacy concerns.
The other trade-off that needs to be considered is that of efficiency. What is the ratio of saleable/rentable area to gross construction area? Adding circulation space lowers this number. So it can come down to whether it is better to have a higher efficiency with some elbows, or a lower efficiency with no elbows.
On January 1st of this year, I wrote a post called, “My 2021 predictions.” It was part of a new practice that I have adopted where I try to forecast the year (I will be wrong) and then evaluate how I did at the end of it (the focus of today’s post). This year was, of course, a tricky year with lots of uncertainty. But here’s where my head was at in January and here’s what ultimately happened.
Life will feel a lot more normal by spring/summer.
This more or less happened. Cases, at least here in Ontario, were way down by the summer. Those who wanted to be fully vaccinated had the option to be. Cities reopened and summer felt pretty good after a long winter of lockdowns. As soon as it was possible to do so, we reopened our office and many/most people came back. I ended up being in the office this year more than I wasn’t. Of course, I had no idea that Omicron was going to be a thing back in January.
Working from home/the office.
I think the jury remains out on this one. It’s still too early to draw conclusions. I have been in the office full-time for most of this year, but I recognize that that hasn’t been the case for everyone. I know from the super scientific “Jimmy the Greek Reopening Index” that I developed that office utilization rates are not yet back. When I wrote about this topic back in October, the US average was thought to be just below 40%. Still, I remain bullish on office.
An explosion of global travel.
Well, Airbnb’s stock isn’t maybe as sky high as I suggested in my predictions post. But it is still up over 19% YTD:
Marriott is also up nearly 27% YTD:
The reality is that travel was/is rebounding. I managed to take two weeks off at the end of the summer, which is something I hadn’t done in at least several years. But Omicron has certainly impacted the recovery:
Urban/downtown real estate will strongly rebound.
I would argue that we saw this play out in the residential sector. Here in Toronto, Q3-2021 saw condo rents in the core increase 11.4% quarter-over-quarter. This was a fairly significant snapback. It was the largest increase in the region, outpacing both the inner suburbs and the outer suburbs. On the for-sale side, we saw evidence of the condo market returning as early as Q1. We were also able to successfully launch One Delisle and are now preparing to start construction.
Trends accelerating.
In some cases, what we saw was a reaction to short-term dislocation. Peloton’s stock is down about 73% YTD at the time of writing this. In other cases, what we saw was just a “pulling forward.” (Link to post by Fred Wilson.) The pandemic led to greater consumption of certain products and services, but now those companies could be headed for a period of slower growth. At the same time, there’s evidence that certain things, like buying more groceries online, may actually be sticking.
Return of restaurants.
What seems pretty clear is that people are quicker to return to bars & restaurants than they are to return to the office. As we know, getting together in person is fundamental to urban life. Here’s a chart from OpenTable:
However, this is not to say that many restaurants didn’t have a tough go during this uncertain time.
Public transit ridership will return to pre-pandemic levels by the fall.
I was dead wrong and way too optimistic about this one. Office utilization rates remain lower than expected and so people aren’t commuting in nearly the same way. Those who are, seem to be driving more. As of August, Canada’s urban transit networks were operating, on average, at just over 40% of where they were pre-pandemic (August 2019). This is obviously a serious problem for operating shortfalls.
Migration from high tax states to (warmer) low tax states.
This is an established trend in the US and so it was certainly not a bold prediction. There are many other factors at play here beyond simply the pandemic. However, as I mentioned in my original post, what is perhaps more interesting right now is the heightened tension between centralization (urbanity) and decentralization. I’ll see what data I can uncover in the coming weeks, but we likely need to get to the other side of this pandemic before drawing any firm conclusions.
In reviewing this year’s predictions it is clear that I was perhaps overly optimistic (which is far better than being overly pessimistic) and that missed a lot of important stuff. Some of it was unknowable, such as a new variant, and some of it I just missed, which is bound to happen. I could also be more precise and bolder in my predictions, and so I will endeavor to do that in my upcoming predictions for 2022. Stay tuned.
If you’re not already an email subscriber to this blog, consider making that happen over here. And for those of you who have been reading all year, thank you. I truly appreciate it.
Each t-shirt comes with a custom hand-drawn logo and playful colors that are intended to reflect the spirit of each place. The first three cities are Toronto, Paris, and Park City (Utah). And the goal is that once this first release is sold out, there will be a subsequent drop with three new places.
This is a project we’ve been thinking about for a while now, so it feels great to get it out the door. To pre-order a city collection tee, click here. All prices in Canadian. Global shipping available. Please note that these are pre-orders. All tees will ship in early 2022.
If you have any feedback on the tees, I’d love to hear from you in the comment section below.
The Institute for Transportation & Development Policy (ITDP) is a non-profit group that works all around the world — everywhere from Jakarta to Rio de Janeiro — to design and implement both transport solutions and policies that help to make our cities more livable, equitable, and sustainable. If you’re interested in learning more about the kind of work that they do, you can download a copy of their latest annual report, here.
Most recently, the group published a report called, “The Compact City Scenario – Electrified.” In it they argue that two things need to happen together if we are to move humanity toward net-zero carbon emissions and reduce global warming to less than 1.5 degrees Celsius by the end of the century. One, we need to fully electrify our transport (which I think is fairly obvious at this point). And two, we need a modal shift.
To be even clearer, ITDP argues that both of these things need to happen at the same time in order to successfully hit our targets. Full electrification of our transport without any sort of modal shift isn’t going to cut it, and the same is true for a modal shift without electrification.
Why all of this is important is because electrification is in many ways just a technical problem. We need electric vehicles, we need batteries, and we need the infrastructure in place to charge these vehicles. Among other things, this has meant building new charging stations, retrofitting existing buildings, and encouraging/requiring new buildings to make provisions for a future with predominantly electric vehicles.
But for the most part, EVs allow us to continue living the way that we have already been living. Just instead of pumping gas, we now plug in our cars at the end of the day. On the other hand, encouraging a modal shift is a fairly significant behavioral change. Though we know that one of the most effective ways to encourage less driving is to build more compact cities.
This means changing the way we live. Changing the way we get around. And accepting more intense forms of development in our own backyards. It is fundamentally linked to land use planning and so it is going to be much harder to achieve. But if you agree with the above report, we won’t be able to meet our sustainability goals without it.
We knew it was coming. But it’s important and worth mentioning again. This week, Toronto City Council adopted new Zoning Bylaw Amendments that will remove most parking minimums across the city. We now join many other cities across North America who have done similar things in order to try and encourage more sustainable forms of mobility.
If you’d like to take a spin through the draft amendments, you’ll find them linked here. I haven’t gone through them in detail, but I did do a word search for “maximum” given that this week’s adoption represents a pretty clear change in perspective. Here’s an excerpt from the staff recommendation report that speaks to what I’m talking about:
Recognizing these challenges, this review of the parking standards in the city-wide Zoning By-law 569-2013 was guided by the principle that parking standards should allow only the maximum amount of automobile parking reasonably required for a given use and minimums should be avoided except where necessary to ensure equitable access. The previous review, which began in 2005, was guided by the principle that the zoning standards should require the minimum responsible amount of parking for a given land use. This is inconsistent with Official Plan policies which discourage auto dependence.
One other thing I found in the documents that went to Council was this map of parking spot selling prices in active high-rise developments across the city. Not surprisingly, downtown and midtown are showing the highest prices per parking space. I can’t vouch for the accuracy of all of these dots, but it looks directionally right and I can tell you that at least one of them is correct.
All of us in the industry know how much parking drives decision making. There’s a joke (half-joke) that when you’re designing a building, first you lay out the parking and then you design all of the residential suites around that structural grid. That’s not the way things should be done. The future of this city should not and cannot be centered around the car. This week’s adoption is in service of that.
The New Consumer, in collaboration with Coefficient Capital, just published its latest Consumer Trends report, which you can download for free over here (registration required). There’s a lot in the report to flip through, but I thought I would share these two slides:
Generation Z and Millennials now make up ~40% of the US population and they are soon entering their prime consumer spending years. What’s noteworthy about these charts, but perhaps not surprising, is the extent in which self-expression and a sense of community have shifted from offline to online.
Very few Boomers, at least according to this report, feel like themselves online. But nearly half of Gen Z feel most like themselves online. What it means to be part of a “community” has also shifted dramatically, with more if it happening online or at least partially online.
All of this ties into what happened earlier in the week with Nike announcing the acquisition of RTFKT Studios. As I mentioned in this post, the so-called metaverse doesn’t necessarily have to mean VR goggles and living in video games. It can simply mean placing value on the parts of our lives that are now digital. The above two charts suggest that many are already doing this.
Of course, what all of this means for our physical lives is an important question. Josh Stephens recently argued, over at Planetizen, that the metaverse is going to be really bad for cities. The more we focus on seductive virtual worlds, the less we will focus on our physical spaces. I get this logic.
But again, I think it depends on how you define the metaverse. And I think VR headsets are a pretty narrow definition. I am both a lover of technology and a lover of cities. And throughout this pandemic I have been fairly consistent in writing about the resiliency of cities. Nothing in this post changes that for me.
Retention of an existing concrete building, and architecture that’s a sensitive counterpoint to the original. This (if built as shown) will be excellent. https://t.co/Svbcq3pLJ5
The application proposes to retain the existing 12-storey office building and both expand its floorplates to the west and build new residential on top. In the middle is a shared multi-storey amenity space that also performs some pretty cool structural gymnastics courtesy of Stephenson Engineering (see above rendering).
This approach created some interesting design challenges for the team. Typically when you’re adding onto an existing building, you want to do something new and not try and copy/bastardize what’s already there. Oftentimes this means something more contemporary.
The architecture team at Gensler Toronto tried this approach but the podium proportions didn’t feel quite right when we did it. So a decision was made to instead pay homage to the existing building’s architecture, and then kind of reinterpret it by playing with scale and other details.
This way the original building remains architecturally legible, but the entire podium still reads as one and its proportions feel much better. We hope you like it as much as we do.
The cost of container shipping continues to come to the forefront in this current environment. Today I was reviewing prices from a number of our suppliers and the rates for a FEU (forty-foot equivalent container) now seem to range anywhere from $8k to almost $18k (both CAD), depending on the origin.
This is up from a few thousand at the beginning of the year, and from far less prior to that. To help illustrate this point, above is a chart I found over at Statista showing an aggregated global container freight rate index from July 2019 to November 2021. This chart, which is in USDs, suggests that container rates may have peaked and be now tapering off, but who knows really.
This is a challenge for our suppliers and partners to manage through and it is a challenge for us to manage through. In some cases these additional costs will necessarily trickle down to the end consumers of the spaces that we and others are building. But in other cases that is not possible.
