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.
Food was, not surprisingly, very resilient during this pandemic. In the case of Uber, food delivery became its biggest business (higher gross bookings than mobility). But mobility is coming back (first chart above) as our cities continue to reopen. In fact, Uber’s mobility business is probably a good proxy for our return to normal. Big and sudden drop in March 2020 and a longer climb back. You’ve seen this graphic before. We’re not fully back, yet, but we’re getting there. Based on this metric (mobility), it looks like we could get there by late summer or early fall in many cities.
This is an interesting study by Clio Andries (assistant professor at the Georgia Institute of Technology) and Xiaofan Laing (city planning graduate student). It looks at restaurant “chaininess” across the United States.
To do this, they mapped over 800,000 restaurants and looked for, among other things, restaurants with the same name. If the same restaurant name shows up in multiple locations, it is considered to be a chain.
Looking at the above snapshot of San Francisco, a yellow dot represents what is thought to be an independent restaurant and a dark purple/maroon dot represents a chain.
San Francisco has a very high percentage of independent restaurants. In their study, the city receives a chainess score of 28, compared to the national average of 1,247. (Some cities in the southeastern US are in the 1,900s).
One of the interesting takeaways from this study is that there appears to be a correlation between chaininess and built form. Generally speaking, the study revealed that auto-centric communities tend to have more chain restaurants, versus more independent restaurants in pedestrian-centric communities.
This is perhaps intuitive if you’ve ever driven and traveled across the US, but it is interesting to consider what is actually leading to this food and beverage outcome. Density certainly plays a role.
Monroe County, Florida, which is the county that includes the Florida Keys, held a public meeting at the end of last month to discuss what they are going to do to respond to climate change. The agenda can be found over here. According to this article in Grist, it was a seven-hour public meeting and the overall tone was something along the lines of this:
“The water is coming and we can’t stop it,” said Michelle Coldiron, mayor of Monroe County, which encompasses the Keys. “Some homes will have to be elevated, some will have to be bought out. It’s very difficult to have these conversations with homeowners, because this is where they live. It can get very emotional.”
In attendance at the public meeting was a scientist from the National Oceanic and Atmospheric Administration (NOAA), who outlined that they are expecting an additional 17 inches of sea level rise by 2040. This is the “intermediate high” scenario based on the below chart.
Which is why the county is looking to spend $1.8 billion over the next 25 years to raise some 150 miles of roads and deploy a bunch of other fixes that include things like new drains, pumping stations, and vegetation — all of which are of course intended to mitigate the impacts of sea level rise.
One problem, which shouldn’t be all that surprising, is that the county doesn’t have the money to pay for all of this. And as the quote at the beginning of this post suggests, part of “this” includes buying out many of the homes. Presumably these are the higher risk homes where there are no clear alternatives.
This is a problematic situation. Because as time goes on, one would expect the tax base here to start to decreasing. Both as homes get bought out and as overall housing demand weakens. There are also financing and insurance considerations. Already the Keys have some of if not the highest insurance premiums in Florida.
As I understand it, the Florida Keys are one of the most vulnerable areas in North America when it comes to sea level rise. And so unfortunately, the public meeting that took place two weeks ago could very well be considered a leading indicator for what’s to come.
Venture capital firm Andreessen Horowitz (a16z) has just launched a new site called Future. It is a site for “understanding the future, how tech shapes it, and how we build it.” I just subscribed to it and, if you’d like to do the same, click here. At the same time, the company also just announced their latest crypto fund (a $2.2 billion fund). Here’s an excerpt from the release:
We believe that the next wave of computing innovation will be driven by crypto. We are radically optimistic about crypto’s potential to restore trust and enable new kinds of governance where communities collectively make important decisions about how networks evolve, what behaviors are permitted, and how economic benefits are distributed.
I’ve been reading a lot more about crypto over the last few months (which is something that I mentioned I was doing here.) I am not in this world day-to-day, but I am now fully convinced that we are in the very early innings of a profound shift. So pretty soon this is going to become my day-to-day, whether I like it or not.
One of the ways to try and keep tabs on where people are moving is to look at the number of permanent address changes. Another way is to look at the number of one-way U-Haul trucks that enter versus leave a particular state. And it turns out that if you’re U-Haul, you do care to track where all of your trucks are going. Each year in the United States there are about 2 million one-way truck transactions.
Looking at the data from 2020, the top inbound destinations — that is, the states that had the largest net gain of one-way U-Haul trucks — were (1) Tennessee, (2) Texas, and (3) Florida. This is a big jump for Tennessee as it was 12th in 2019. Texas and Florida, on the other hand, were similarly in the top three last year. In last place on this list is California, meaning that it had the largest net loss of one-way U-Haul trucks leaving the state.
Overall, this data continues to reinforce a shift that is taking place toward more affordable housing markets, such as those in the southern United States.
This is a good follow-up to my recent post about the barriers to developing mid-rise here in Toronto. I have just learned (thanks to Michael Mortensen) that Vancouver has proposed some specific zoning changes that are intended to increase the supply of new rental housing.
Oddly enough, some of these proposed changes are consistent with what I put forward in my post and include 1) streamlining the development approvals process and 2) simplifying the allowable built form. i.e. Fewer step-backs.
Here’s a capture from the report that went to City Council:
The report is dated May 2020 and I truthfully don’t know the current status of these proposed changes. I’m sure Michael would have all of the details. But regardless, the report very clearly acknowledges that lengthy entitlement timelines are a barrier to new rental housing, as are more complicated building forms. Speed and simplicity can go a long way.
In the world of startups, a unicorn is used to refer to a company with a market cap greater than $1 billion. A decacorn, the latest benchmark, is what it sounds like in that it’s a company with a market cap greater than $10 billion.
While unicorn status is just one measure, valuations are an important yardstick for cities and countries. How many big new companies are you creating? That is a critical question because, presumably, these big new companies are going to create a bunch of new jobs and generate a lot of new wealth for people.
This recent blog post by Elad Gil is a great summary of what’s happening in the world from this perspective. The raw data is also available if you’d like to dig deeper.
Here are the number of new unicorns since October 2020 by city:
Silicon Valley, not surprisingly, continues to dominate, followed by New York.
Here is a breakdown for the United States as a whole:
Miami and Austin have been in the news a lot over the past year and their startup scenes may very well be on the rise relative to other US cities. But it’s interesting to see other smaller cities on this list, like Salt Lake City, who are, at least right now, holding their own.
I found this last set of two charts particularly interesting:
They are showing unicorn count (first) and unicorn market cap (second) as a percentage of their respective countries. For example, Silicon Valley is sitting at about 47% and 51%, respectively. So about half of all unicorns in the US have originated from this geography.
But for most other cities on this list, the percentage is much higher and, in many cases, it is 100%. (Silicon Valley is perhaps relatively low because the US has lots of other big and important cities.) For me, this shows the continued dominance of cities. If you’re building the next great unicorn or decacorn, the data tells us that you’re probably doing it in a big city somewhere. And I don’t see that changing anytime soon.
What happened in Surfside, Florida this week with the partial collapse of a 12 storey building is a horrible tragedy. My heart goes out to everybody who has been affected. I can’t imagine how this must feel. The New York Times is reporting that some 159 people are still unaccounted for, as of last Friday night. At least 4 people have been killed in the incident.
The focus right now is on saving as many human lives as possible. Without a doubt, that is priority number one. But this situation also raises a critically important question: How the hell could this happen in North America? When I saw the terrible news this week, I immediately flipped the article to one of our structural engineers with a note asking basically this.
As many of you know, buildings are typically designed and built with lots of structural redundancies. This is so that these sorts of tragedies can be avoided. It is too early to know exactly what happened here, but there are going to be questions around the building’s original design and construction, its maintenance program (saltwater is awful for buildings), and much more.
I am sure that all of this will come out in the fullness of time. And it is important that it does.
I love mid-rise buildings. I think they are an incredibly livable scale of housing, which is why I am looking forward to moving into Junction House when we begin occupancies next year. But as we have talked about many times before on the blog, the mid-rise economics are challenging in this city, which is why we also don’t have any other Avenue-style mid-rise projects in the pipeline right now. We haven’t been able to find land where the math works.
For well over two decades, Toronto’s official plan has called for transit-oriented intensification along the “Avenues,” much of it expected in the form of mid-rise apartments that can be approved “as of right” – meaning without zoning or official plan appeals. Such buildings are often seen as more livable and human scale than 50- or 60-storey towers.
Yet, ironically, the highly prescriptive Mid-Rise Guidelines – combined with skyrocketing land, labour and building costs, as well as timelines that can run to six years for a mid-sized building – have turned these projects into pyramid-shaped unicorns, often filled with deep, dark and narrow units dubbed “bowling alleys.”
“The economics are so frail,” says architect Dermot Sweeny, founding principal of Sweeny & Co., who describes the angular plane requirements as “a massive cost” because they make the structure more complicated and expensive while reducing the amount of leasable or saleable floor space.
The critiques extend beyond the industry. Professor of architecture Richard Sommer, former dean of the John H. Daniels Faculty of Landscape, Architecture and Design at the University of Toronto, describes the controls in the guidelines as “very crude.” “They’re built around a mindset of deference to low-rise communities.”
My opinion is that, at a minimum, we need to revisit the “guidelines” that govern these kinds of projects and we need to make this scale of development “as-of-right.” In the same way that laneway suites work, where you simply apply for a building permit, we need to make it just as easy for mid-rise housing. There just too many barriers and too many opportunities for something to come up that could hold up the entire project for months or years.
Building at a variety of scales is important for the fabric and vitality of our cities. Unfortunately, I have all but made up my mind that small doesn’t work unless it’s as-of-right. I would love to build another laneway house and I fully expect that to happen at some point in the near future. But I just can’t seem to get my head around another mid-rise building right now. I wish that wasn’t the case. And it’s certainly not because of a lack of effort.
This is probably the most noteworthy awards program in the development industry here in the Greater Toronto Area. And so I am pretty excited to announce that One Delisle is a finalist for the following awards:
Project of the Year, Mid/High-Rise (Pinnacle Award)
People’s Choice Award (Voting Opens August 2021)
Best Suite Design, Large — West Penthouse Residence
Best Innovative Suite Design – Sky Collection Suite
The full list can be found over here (PDF). All of the finalists’ work is also going to be posted on the BILD Awards website before the end of this week.
The actual winners will be announced this fall at the Awards Gala on October 7, 2021. I’m not sure if it has been decided yet whether it will be in person or online, but we all know that in person would be much better. Let’s hope that will be the case.
Given the good news, our office decided that it was probably a good idea to make a few margaritas this evening:
Whatever the end result, we are thrilled to be a finalist.
We are also a past recipient of the “Best Innovative Suite Design” award, which was given to our House Collection of suites at Junction House. So I guess we like working our floor plans.
Congratulations to the full One Delisle team. This is well deserved.
