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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  • Meatspace vs. metaverse — what is the best way to flex?

    With every passing year, the Matrix feels less and less like science fiction. With the continued rise of the metaverse — Zuckerberg is betting all of Facebook on it — we are increasingly living our lives between two worlds: one is offline and one is online. What this will ultimately mean (for us and for our cities) is of course up for debate. But what is clear is that the traditional trappings of real life have quickly made their way online into the metaverse. Arthur Hayes recently penned this fantastic article about the future of the world (it’s the metaverse) and the role of art (including NFT art). In it, he makes the argument that to “flex” is integral to the human experience. Here’s what he means by that:

    As social beings, the sole purpose of many activities and purchases is to publicly display how much energy you can waste. The nightclub economy is extremely a propos to this concept. Individuals walk into a dark room, listen to loud music (art), dance (a waste of energy akin to a mating call), and pay exorbitant amounts of money to drink liquid. Everyone gets dressed up real nice in articles of clothing that serve no useful purpose other than to demonstrate that the wearer spent a lot of money to display their social status to the rest of the clubbers present.

    People go to clubs to flex. In the words of the late Clayton Christensen, that is the “job” to be done.

    Why this matters is that many of us are now doing the same kind of things online. Buying a CryptoPunk (an OG NFT) for a large sum of money and posting it as your social media profile pic is a flex. Is this rational or irrational behaviour? Whatever your answer, it is akin to paying several hundred dollars for a t-shirt from some cool streetwear brand. The real job to be done is not that you desperately need a t-shirt to cover your upper torso. It is the signalling that goes along with owning something scarce and valuable. One of the things that is so special about NFT-permissioned stuff is that there’s now a simple way to prove and enforce all of these things: ownership, scarcity, and so on.

    What’s equally fascinating to me is how offline and online will end up interacting with each other. (Arthur refers to our offline world as the meatspace. I don’t know if he coined the term, but I’m going to rolling with it for the purposes of this post.) If people end up preferring to flex online instead of offline (and I’m sure many already do), what does that do to our meatspace(s)? And what does it do to our cities and how we build? I have no doubt that these questions are coming.

    Photo by Richard Horvath on Unsplash

  • Built form and climate impact

    Building height and density are not one and the same. You can have tall buildings configured in a low-density way (think post-war towers in the park). And you can have low/mid-rise buildings configured in a high-density way (think Paris and Barcelona). This is one of the reasons why it is important to decouple density and tallness when thinking about our cities.

    This line of thinking is the approach that a recent study took when trying to determine the optimal built form for minimizing climate impact. In the study they define four building typologies: 1) high density, high-rise, 2) low density, high-rise, 3) high density, low-rise, and 4) low density, low-rise.

    What they found was that taller environments tend to have higher life cycle GHG emissions, but that lower-density environments are (obviously) far more land consumptive. To determine life cycle GHG emissions they looked at both embodied and operating emissions, which is why the taller stuff didn’t score as well under their methodology. There’s typically a lot of concrete and steel in tall buildings.

    This lead the team to conclude that if you want to optimize around climate impact, you should probably aim for that perfect middle ground: dense, but not super tall.

    But as Joe Cortright (City Observatory) rightly pointed out in his email newsletter, one of the big limitations of this analysis is that it does not consider transportation-related impacts. And since we know that transportation is one of if not the largest source of GHG emissions and that how we get around is heavily dependent on land use patterns, it is probably an important piece to consider.

    Photo by Alfons Taekema on Unsplash

  • To stepback or not to stepback

    I was riding my bike on Bloor Street along the north edge of High Park over the weekend. And in between cyclists in spandex yelling at me for seemingly riding the wrong way in the bike lanes, I managed to safely snap this picture:

    It was a reminder of that thing we like to do in Toronto where we want lower-rise along our main streets and then we tuck the taller parts somewhere in the back so that we can pretend they are maybe not there. Here’s an aerial shot of the situation from Google Maps:

    It’s a very different condition from what you will find in New York along virtually all edges of Central Park:

    Now, New York and Toronto are not the same city. This much is obvious.

    But there is a grandeur and degree of urbanity that is present along Central Park that is not present along High Park. And I would argue that this feature isn’t exclusive to New York. It can be found in many other cities, including places like Montreal.

    I am sure that part of the rationale here on Bloor Street had to do with matching the lower-rise existing context. But we shouldn’t forget that the edges of public spaces are oftentimes just as important as the spaces themselves. Sometimes they can be even more important.

    So I thought I would put it out to all of you. To stepback or not to stepback. What do you think would be the most appropriate built form along this north edge of High Park? Leave a comment below.

  • What is the FSI of Paris?

    In the world of development, there is something known as a floor space index (FSI). Some places call it a floor area ratio (FAR), but they mean the same thing. It is one measure of density. To calculate it, you simply divide the total building area by the site area. For example, if you had a 25,000 square foot piece of land and you were to build a single storey building that occupied every bit of the site (also 25,000 sf), you would have an FSI or FAR of 1.0. If you built a two storey building on only half of the site, you would similarly have an FSI or FAR of 1.0. The area didn’t change, you just moved things around. That’s how FSI’s work.

    A ratio like this tells you how intensely you may be using a piece of land, but it doesn’t tell you everything or necessarily give you the full picture. Which is why I find it silly when too much emphasis is placed on this singular number. I don’t think anyone in the history of the world has ever traveled to a city — let’s take Paris — and remarked how beautiful it is because of its floor space indices. Nobody thinks like this. It’s way too esoteric. What guides our experiences is built form, the ground plane, relationships to streets, materiality, light, context, and many other important things.

    To give a specific example, let’s take One Delisle. This project was in effect approved twice. After it was approved by City Council in July 2020 an adjacent land parcel was acquired. It wasn’t absolutely necessary to do this, but we felt it made for better city building and so we did it. (We wanted to look back knowing we did the right thing.) That meant that we needed to go back to Council to revise our approvals, which ended up happening at the beginning of this year (public staff report, here). There was no change to the tower and and no change to any of the key setbacks or stepbacks. But the overall FSI did go down!

    Will anyone notice or care about this lower ratio? I doubt it. Which is why I think it’s silly to try and plan our cities around them. It feels like design by spreadsheet. Thankfully, I think many people recognize this.

    Photo by Thibault Penin on Unsplash

  • A city split in half

    Here is a short video by Dave Amos (of the YouTube channel City Beautiful) about the splitting of Berlin into two. What a fascinating urban case study. I just recently discovered his channel, but he seems to cover some interesting topics, all of which are related to cities and city planning. When Dave is not making YouTube videos, he is a professor of city and regional planning at Cal Poly. He also graduated with a Master of Architecture at some point before getting his Ph.D., so presumably he knows a few things about buildings and cities. I guess that also makes him an imposter architect, like me.

  • South Korea’s idiosyncratic and counterintuitive home rental system

    Over the weekend I learned about a unique feature of South Korea’s housing market. It’s called jeonse. And the way this housing contract works is that, instead of tenants paying a monthly rent to their landlord, they pay a huge lump-sum amount up front. Usually this “key money” is equal to somewhere around 50% of the value of the home, but oftentimes it’s even higher (60-90% range). In 2014, the average cost of a jeonse deposit in Seoul was somewhere around US$300,000.

    In exchange for this huge lump-sum amount, jeonse tenants are able to live in the property for a period of time (usually 24 months) without having to pay any rent. Because what they are actually doing is paying via the opportunity cost of having their money tied up during their occupancy. Jeonse landlords are free to invest these lump-sum deposits however they see fit. The money they make from investing is their “rent” on the property. (The deposits are secured through a lien on the home, but of course that isn’t without some risk.)

    At first glance, this seems entirely counterintuitive. If you have hundreds of thousands of dollars available to you, why not buy? Why hand it over to a landlord so that they can go invest in things? Well, usually when there’s a marketplace for something it is because both sides stand to benefit. And in this case, the jeonse system supposedly emerged as the country was developing and people were rapidly urbanizing. Credit wasn’t widely available and so the jeonse system grew to help both tenants and landlords.

    For tenants, it was cheaper than owning a place outright and the “rent-free” period allowed them to more easily save up so that they could eventually buy. And for landlords, it was access to low-cost capital and the opportunity to invest in other money-making stuff. Some even credit the jeonse system with being instrumental in South Korea’s rapid rise in the second half of the 20th century.

    But is it still relevant today? Good question.

    The data suggests that it could very well be on the way out. Jeonse deposits have been declining for years and, based on this, it was overtaken in 2012 with more people choosing to pay rent on a monthly basis. As of 2019, it had grown to over 60% of tenancies in Seoul. And so it feels like the end could be near. But if any of you have first-hand experience with renting in South Korea, I would love to hear from you in the comment section below.

    Photo by Cait Ellis on Unsplash

  • How new technologies spread (and what that means for superstar cities)

    We know that innovation and economic growth tends to be unevenly distributed. This is the bull case for living in cities and, more particularly, for living in certain cities. But of course, the big question these days is whether or not our little work from home experiment has proven that, for the first time ever, work can now decentralize.

    Well here is a unique study that looked at 29 disruptive technologies over the last two decades in the United States. Using three main sources — patents, job postings, and hundreds of thousands of earnings calls — the team traced where new innovations/technologies have tended to emerge and then how they spread (or didn’t spread) across the rest of the US.

    Their initial findings won’t surprise regular readers of this blog. There are indeed a certain number of pioneering superstar cities. Within their list of new disruptive innovations, the team found that about 40.2% of them came from California. The next “super-cluster” was along the Boston-Washington corridor in the northeast with ~21.2%. By narrowing down their list to “disruptive patents”, as opposed to all patents, innovation looks even spikier.

    Next the team looked at how these disruptive technologies tend to diffuse across the country. This is where job postings and earnings calls come into play. New technology gets created in California garage. Cool. But at what point do CEOs across the country start talking about it and hiring people who are capable of doing things with it? This next figure shows that diffusion at various time intervals.

    Now here are the important takeaways. New disruptive technologies clearly take time to spread. However, high-skilled hiring tends to spread much more slowly than low-skilled hiring. This kind of makes sense as you’ve got a built up and entrenched knowledge base in these pioneering locations.

    But what this also means is that pioneering locations tend to maintain their hegemony for quite some time — decades. The high-paying jobs stick closer to home for much longer, presumably because geography makes it harder to transfer knowledge. This is, of course, based on historical data. But I remain highly suspect that Zoom calls can really disrupt the importance of our superstar cities.

    Maps: Vox

  • What happens when you eliminate parking minimums? Lessons from Buffalo.

    Back in 2017, the City of Buffalo introduced something known as the “Green Code.” It was the first overhaul of its zoning code in over 60 years. I wrote about it here. One of most notable changes as part of the Green Code was the complete elimination of parking minimums. Which is another topic that has gotten a lot of air time on this blog.

    Now that it has been a few years, Buffalo provides an interesting case study: What do developers do once you eliminate parking minimums in a mid-sized city? I mention mid-sized because I think the size of the city is relevant here. There is a common argument that you can’t eliminate parking minimums unless you’re in a big and transit-rich city. “This isn’t [insert big city]. People drive here.” I am sure that many of you have heard this before.

    But is that really the case? Here is what Daniel Baldwin Hess & Jeffrey Rehler found when they studied the development response to removing parking minimums in Buffalo:

    • The study looked at 36 major developments in the first two years after parking minimums were eliminated
    • In aggregate, the 36 developments built 21% less parking spaces than what was previously mandated, likely demonstrating that the old zoning code was resulting in an excess supply of new parking
    • Mixed-used developments (of which there were 14, generally consisting of residential + retail) built 53% less parking than what was previously required
    • One exception to this trend is that single-use projects (both residential and commercial) built either the same or more parking (most of these projects were in the suburbs outside of the downtown core)

    What this suggests to me is that the previous zoning code was maybe appropriate for what the market was demanding (for parking) in suburban locations. Maybe. But it was certainly overshooting what the market was and is willing to accept in more urban locations in Buffalo. Mixed-used (i.e. being able to support retail at grade) is likely a good measure of the project’s urbanity.

    Perhaps more importantly, I think this study shows that developers are incentivized to build what the market wants — no more and no less. Building parking that nobody wants is bad business. As is building too little parking such that you can’t rent or sell your space(s). A Goldilocks parking ratio is what you’re after, but it is constantly changing and finding it can be a bit of an art. Eliminating parking minimums is a good way to let the market try and figure it out.

    Photo by Seth Yeanoplos on Unsplash

  • New land development across the US between 2001-2019

    The Washington Post just published this interactive feature showing new developed land (i.e. urban sprawl) across the US between 2001 and 2019.

    It is based on these land cover maps which were published by the US Geological Survey earlier in the summer. Their findings show that between 2001 and 2019, more than 10% of the land cover in the lower 48 states changed during this time period. Mostly in forested areas.

    The WP feature allows you to search by city/address and I would encourage all of you to try it out. As an example, here is Salt Lake City. The gray areas represent land that was already developed in 2001. The purple areas represent land that was developed sometime between 2001 and 2019.

    Images: Washington Post

  • Making sense of public ledgers

    One of the things about crypto and blockchains is that they are mostly public. Every transaction gets logged in a public ledger, which means that if you know the address of a particular wallet, you can see its balance, all the in and out $/crypto flows, any NFTs that it may own, as well as probably many other things that I am still working to get my head around. In all likelihood you won’t know who the wallet belongs to, but you’ll be able see what’s going on at that particular address.

    This is a pretty radical feature if you compare it to the way things generally work today. And what it signals to me is that we are headed towards a world with a lot more transparency and real-time data. Today I learned of a company called Dune Analytics. It is an analytics company built around open blockchain data (there’s no proprietary data). At the same time, it’s also a community. And it is this community (think of them almost as analysts) that helps to make sense of the open data.

    To give you an example, here is a chart from Dune showing monthly volume by NFT marketplace. OpenSea looks to be running away with things right now. And there’s no guessing. Here is all of the data.

    But, of course, this is just one example. Blockchain data could also be used to generate something like a real-time profit and loss statement for a company, which again, is pretty radical when you compare it to the way (and how slowly) that things are done today. It’s hard to not to see all of this and think about the far reaching implications of what’s unfolding right now. Everything from healthcare to real estate will almost certainly be transformed by this next iteration of the internet.