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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  • What is the premium for a home in a walkable community?

    According to this RedFin data from 2019 — which looked at normalized sale prices and Walk Scores above 50 — it is about 23.5% or $77,668 for 16 major US metro areas. Again, this is 2019 data and so things may have changed a bit, especially with the whole COVID thing.

    It also varies by metro area in this data set. The premium in Boston, for example, is almost 30%. Whereas the premium in Oakland is actually a slight discount (-1.3%). There are going to be local conditions that play a role.

    But as a whole there is an economic trend here that makes intuitive sense to me. Though it’s not just a question of how pricey your home is. You also need to consider your transportation costs, the value of your time, and the health benefits of living in an environment that promotes consistent and moderate activity.

    When you factor all of these things, maybe “premium” isn’t the right way to look at this.

  • How clustering makes us all more productive and innovative

    Earlier this year, Enrico Moretti, who is a professor at UC Berkeley, published this research paper looking at the effect of high-tech clusters on productivity and innovation. (I am unclear if there is any relationship to the Italian brewing company Birra Moretti.)

    One of the things he looks at in the paper is the decline of Kodak. Headquartered in Rochester, New York, Kodak famously missed the transition to digital photography. And so by the late 1990s, they were forced to start letting people go. The result was an almost 50% decline in the size of the entire “high-tech cluster” in Rochester.

    But what Moretti goes on to test in his paper is the impact that this employment decline had on productivity and innovation outside of Kodak and outside of the photography sector (but within Rochester). And what he found was that between 1996 and 2007, the productivity of non-Kodak inventors dropped by about 20%!

    This, of course, is one of the great features of cities. Even if you’re not working at some big company with lots of smart people, just being in the same city, on the same block, or within the same office building, can make you more productive. It turns out that business ecosystems are pretty interconnected. Spillovers are important.

    For more on this topic, check out this recent Wired article by Viviane Callier. In it she makes the case that remote work is going to negatively impact productivity and innovation over the long run.

    Photo by Yassine Khalfalli on Unsplash

  • The World After Capital

    Years ago I wrote about a book that venture capitalist Albert Wenger was writing — in public I would add — called The World After Capital. The public bit is interesting. As he was writing the book over the last ten years or so, he did it in public and published drafts along the way. This allowed him to get feedback, learn things, and revise accordingly. He calls this a “knowledge loop” and it ties in nicely with some of the topics that he covers in the book.

    The first focus of the book is on explaining that capital (which was a constraint of industrialization) is no longer scarce. This isn’t necessarily true everywhere, but he argues that it is true in the developed world. What is instead scarce today is attention. That is our defining constraint as we continue to move into the Knowledge Age. The second focus of his book is on how he thinks we should best respond to these changes, as well as to the limitations of capitalism.

    I haven’t read the book yet (only scanned it), but it’s now in my queue. Normally my queue consists of a stack of partially read books next to my bed. But this one is digital only for the time being. If you’d like to read a digital copy (there’s a downloadable PDF), go here. Apparently there will also be a hard copy available sometime later this year or early next year.

  • Our intergenerational wealth gaps

    This is a chart by economist Gray Kimbrough from 2019. I recently saw it resurface and so I thought I would reshare it here on the blog.

    The y-axis is the percentage of US household wealth (by demographic cohort). And the x-axis is median cohort age. So one way to look at this chart is as follows.

    When the median age of a Baby Boomer was 35 (which happened in 1990), they owned about 21% of US household wealth.

    When the median age of a Gen Xer was 35 (which happened in 2008), they owned about 9% of US household wealth.

    Millennials haven’t yet hit a median age of 35, but in 2019 they owned about 3.2% of US household wealth.

    Of course, one thing to keep in mind is that these demographic cohorts are not the same size. In 1990, Boomers represented 31% of the US population. And in 2008, Gen Xers were only 22% of the population.

    But even if you normalize, there are some intergenerational wealth gaps here.

  • US expects to deliver more than 330,000 new rental units this year

    Here’s some recent data from RENTCafe looking at the supply of new multifamily rental apartments in the US. About 334,000 rental units are expected to be completed and occupied this year, which is a decline from the 2018 peak of 357,000 units, though still a relatively high number. This year is expected to be the fifth consecutive year where supply is greater than 330,000 units. Below you can also see how this breaks down across the largest MSAs (metropolitan statistical areas).

    For this study, RENTCafe looked at new apartment construction data for buildings with 50 or more units (so no smaller infill projects). It covers 109 US metro areas. To determine whether a building is likely to be completed in 2021, they looked at confirmed certificate of occupancies and also used some sort of fancy algorithm to predict the likelihood that an under construction project will get one before the year is out.

    For more on their study, click here.

  • Is better design the solution to NIMBYism?

    Alexis Self has an opinion piece in today’s Monocle Minute (email newsletter) that deals with development in London and NIMBYism. Here’s an excerpt:

    Affluent, socially liberal city dwellers can be the most extreme Nimbys. But perhaps their ire wouldn’t be so fierce if what was being built weren’t so aesthetically offensive. In the postwar era, London’s councils teemed with ambitious urban planners. The result: design classics such as Trellick Tower in Kensal Green, the Barbican Estate and Camden’s Alexandra Road Estate. While it’s true that these were labelled ugly at the time, they were undeniably the work of Europe’s best architects. Few, if any, of the city’s 21st-century edifices will enjoy a similar reappraisal.

    Alexis raises two interesting points: 1) Could better architecture and design actually help to quash NIMBY sentiment and 2) are we really not designing and building like we used to?

    I’ll start with number two.

    I am not that familiar with the “design classics” that Alexis mentions above, but it just so happens then when I was watching Never Too Small over the weekend I came across this studio apartment in the Barbican Estate.

    Designed by Chamberlin, Powell and Bon in the 1960s, the Barbican is a residential complex with somewhere around 2,000 apartments. It’s considered a prominent example of British brutalist architecture and so most of it is listed.

    While certainly noteworthy, it strikes me that it is likely one of those pieces of architecture that designers and architects love (I like it), but that the general public dislikes. In fact, architect Witold Rybczynski once argued that, “if people don’t hate it, it can’t be Brutalist.”

    Brutalism is having a bit of a renaissance. Kind of. But I don’t think we’re anywhere near universal appreciation. So I wonder if the general public really views these “design classics” as being some sort of golden era of British architecture and development.

    I also think, and I have argued this before on the blog, that buildings sometimes take time to settle in. From Montreal to Stockholm, our perceptions have been shown to change. The things we disliked before suddenly become desirable.

    Which means it can be hard to tell if we objectively dislike something (we’re not building like we used to) or if it’s simply not old enough for us to starting appreciating it. Beauty also happens to be a kind of subjective thing when it comes to buildings. Turns out we’re better at assessing whether people are good looking.

    This is probably a good time to come back to point number one: Could better architecture help quash NIMBYism?

    Not quite. I would argue that it certainly helps but it won’t completely quash it. I believe wholeheartedly in the power of great design. I want everything to be beautiful and considered. But the cynical developer in me knows that it will sadly only go so far.

    Béton brut (raw concrete) isn’t for everyone, I guess.

  • 8 years of writing every day

    This weekend was the 8 year anniversary of writing this daily blog. It’s hard to imagine that it has been this long. Perhaps because COVID has accelerated the last little while and made it difficult to remember what day or year it is sometimes.

    I am often asked what the end game is for this blog. What am I hoping to get out of it? The truth is there is no real end game. I like reading and writing. I like being constantly curious about the world. I like discipline. I like meeting and connecting with new people. And I like having my own little place on the internet, however small it may be.

    I get dozens of emails each week from people and companies wanting to pay for sponsored posts on this blog. I’m not sure how legitimate these inbounds are, but I ignore all of them. That’s not what this blog is for or about.

    In the early days of writing this blog it was called Architect This City and the focus was a bit narrower: real estate, design, planning and all things cities. That is still more or less the case, but I do often stray from these topics. Sometimes into personal topics. Sometimes into my photography. And more recently into the world of crypto and blockchains. This is one of the reasons why I decided to move to just blogging under my own name. There’s more flexibility.

    Sidebar: I recently bought my first NFT — a CryptoBabyPunk. I’m not at all suggesting that you should do the same. It could be worthless in the future. But I continue to be fascinated by what’s happening in this space and I’ve committed myself to experimenting and learning a lot more.

    Writing something each day is extremely difficult. Some days it only takes 15-20 minutes. And other days, when I’m not in the mood or I’m exhausted from doing too many other things, it can take over an hour. It’s a big time commitment and on more than one occasion I’ve questioned whether my time was better spent elsewhere. But then I think about all of the benefits that I derive from this daily practice.

    They say that the definition of a habit is that you don’t feel normal until you’ve done it. And this blog has certainly become a habit of mine. It forces me to wake up every morning and consider at least one interesting thing that may be happening in our cities and our world. I don’t intend to stop anytime soon. So thank you all for reading over the years.

  • Never too small — beautifully designed small spaces

    This is my new favorite YouTube channel. I discovered it last night and it’s called “Never Too Small.” The focus is on beautifully designed small spaces. And all of the videos are meticulously crafted — they have a calming feel to them.

    The first video that I watched was the one above (click here if you can’t see the embed) about Desmond Wong’s 31st floor apartment in Hong Kong. At 52 square meters, it’s actually one of the larger spaces on the channel. But it is perhaps important to keep in mind that this was a 2-bedroom flat before Desmond renovated it.

    Floor plans are an interesting thing (and something I enjoy working through for work) because there are lots of nuances to consider, some of which are entirely local. For example, in this flat you’ll see that the kitchen is off in its own little room and furnished with a window.

    That is common in many of the HK apartments that I have seen, but it is not how we would typically lay things out in a new build of this scale here in Toronto. The kitchen would likely be a galley kitchen adjacent to the living/dining room to create more of an open concept plan.

    I’m looking forward to watching their other episodes. For more about NTS, you can also check out their website. They recently published a book which, from what I can tell, looks equally beautiful.

  • Legendary literary hangouts in New York City

    The New York Times’ recent celebration of the city’s “legendary literary hangouts” is an important reminder of one of the great features of city life. Cities have a way of mixing different people together and inspiring the creation of great things. And sometimes that happens rather informally. (That’s one of the reasons why there’s tremendous value in the nighttime economy.) Tina Jordan writes: “You might think of them as solitary creatures, furiously scribbling or typing alone, but as long as there have been writers in New York City, they have socialized together in an assortment of bars, restaurants, apartments and clubs.”

    For the full thing, click here.

  • Our Plan Toronto

    The City of Toronto is currently reviewing its Official Plan, which is a city planning document that acts as a kind of master guide for land user matters. It is a pretty important document in that it dictates, among other things, what kind of development should go where. One way that it is often explained is that our OP is the “vision”, whereas our zoning by-laws are the “precision.”

    This update will be completed by next summer. Why? Because the Province of Ontario said so. (That’s how things work around here. I think cities should have more power.)

    Toronto is expected to grow by more than 700,000 people and add some 450,000 jobs by 2051. Where these people and jobs will be accommodated is a big part of the exercise here.

    As part of this review, the City of Toronto published this Story Map. It is pretty neat. It looks at how the city has grown over the years (the above image is Toronto’s 1943 Master Plan). It explains a little bit about how planning works. And it has a bunch of stats on how people live and work in the city. I just used it to confirm my hunch that there are exactly zero single-family homes in my neighborhood.

    Looking at the above map from 1943, it is, of course, interesting to see how much the city has grown. But it also interesting to note that many of the neighborhoods that now form part of the city were just “New Residential Areas with Prospective Populations.” They were colors and numbers on a map in areas that had yet to be built out by developers.

    When I see this, I can’t help but wonder what the narrative was like at the time with respect to these new developments. Were people upset? Were people happy? Did people even notice what was happening on the edges of their city? Because sprawl, and that’s what this was, is quite different from intensification.

    Our focus today is on the latter. It is about building up as opposed to out. There’s no more room for yellow shaded areas with numbers. This means that we will end up using our land and other resources more efficiently, but it also presents a whole host of issues. Change is hard. Intensification is hard. Part of the job of this document is to navigate some of these challenges.

    If you’d like to get engaged with the city’s Official Plan review, head over here.