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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  • More drivers, more supply

    This week, Lyft announced that it is going to be selling its autonomous vehicle division to Toyota for some $550 million. (Apparently $200 million of this will be paid upfront, with the remaining $350 million paid out over a five year period.) This is notable because Uber did the exact same thing last year when it sold its autonomous vehicle business to Aurora (which happens to be working with Toyota), and because the reasons for selling seem clear: getting to full autonomy is going to cost a bunch more money and both Uber and Lyft are determined to reach profitability sooner rather than later.

    The other thing that you might be able to glean from these announcements is that neither company seemingly feels like they need to fully own/control the autonomous piece. Presumably the thinking is that someone else can spend the money on developing full autonomy and they’ll just stick to building out their ride-hailing network. Once we have autonomous taxis, they’ll need a network to run on anyway, right? I guess. But wouldn’t this dramatically undermine the network effects of Uber and Lyft?

    If you go back to Uber’s S-1, there was a diagram that explained Uber’s “liquidity network effect.” See above. It starts with more drivers and more supply (1), because more cars driving around means that wait times and fares are lower (2) and so more people are likely to use Uber (3). Network size matters. But if you no longer have drivers — only autonomous vehicles — isn’t it relatively easy to add more supply to any network? I suppose this partially depends on how the ownership structure will end up working for these autonomous taxis. Still, I wonder about the barriers to entry under this scenario.

  • The tokenization of cities

    The web in its current state is like a city without public spaces. People can only interact in places owned by someone else, and a small group of landlords captures an oversized share of all economic activity. – Dror Poleg

    I would encourage you all to read Dror Poleg’s recent article called, “The Token Society: Cryptocurrencies will change the way we work, live, and love.” It’s an interesting read, particularly for us urbanists. Poleg starts with urban history. He first talks about how the emergence of industrial cities allowed for new divisions of labor. The example he gives is that of the quatorzième, which is a job that emerged in Parisian society sometime in the late 19th century. The job of a quatorzième was literally to be the 14th person at dinners and functions. Since a headcount of 13 was thought to be bad luck, it was important to be able to call on someone at a moment’s notice to fill this critically important role. While this probably seems silly in today’s context — I mean, who goes out anymore? — it was a real thing and it was a thing that the modern city was suddenly able to provide. Poleg goes on to thread this idea all the way through to today. Web 2.0 enabled a new sharing economy and much larger digital communities (though note the quote at the top of this post). However, we’re nowhere near done yet. Web 3.0 is going to, in his words, enable “the finalization [or tokenization] of all human activity.” Welcome to the new token society.

    P.S. I’m by no means an expert on cryptocurrencies. I have just been watching from afar for the past several years. But over the last few months, it has been hard not to pay attention to what is happening with NFTs and the Ethereum network. And I’m not just talking about the price of ETH (which is up ~56% over the last month alone). I am now of the opinion that we are seeing one of the first mainstream use cases emerge on top of a blockchain network. And yes, I believe it will also change our cities.

  • It’s okay to put buildings close together

    https://twitter.com/donnelly_b/status/1388888938270580736?s=20

    This morning I came across this beautiful photo by @callicles of the 11th in Paris. After admiring it for a few moments, I then immediately tweeted it out with the above caption: “It’s okay to put buildings close together.” Because here’s the thing about this photo: It represents one of the great paradoxes of city building. When most people look at this photo, I suspect that they will find it beautiful. They will like the mid-rise architecture and they will like the quaint European-scaled streets. But despite its fairly universal appeal, very few cities are able to build this way today. It’s often not allowed. So instead what people do is travel to Europe in the summer, sit in cafes, admire the architecture and urban design, and then lament the fact that we don’t build cities like we used to.

    What is it that makes this intersection so inviting? Well, the buildings are tight up against each other. I’m guessing that the right-of-ways (ROWs) in this picture are maybe 6-9 m wide. There are no building setbacks or stepbacks to speak of, save and except for the penthouse floors which taper back slightly. And so all of the spaces in these buildings would likely have some sort of direct facing condition with their opposing neighbors (but partially mitigated by the fact that these aren’t all glass buildings). The ratio of ROW to building height is, I’m guessing, something like 1:4, which, at the end of the day, is a large part of the reason why these streets feel so intimate and inviting. The buildings frame the streets and public realm.

    What I just described breaks many of the guidelines that I suspect many of you in the industry are accustomed to following. In our world, the streets should be wider to allow for adequate fire and service vehicle access. The buildings should stepback to allow light to reach the sidewalks, to mitigate impacts on any surrounding single-family homes, and to provision for sky views. Here in Toronto, the midrise guidelines also stipulate that buildings should have a ROW to building height ratio that is closer to 1:1. Though to be fair this guidance is often rightly broken. But the truth remains, we generally don’t build like this anymore. Why is that?

    It’s not because we can’t do it. We certainly could. We are, for whatever reasons, choosing not to. Is it because we’re bad at understanding what we actually like and what makes for great cities? Is it because what we end up liking is a bit counterintuitive? My unproven and untested theory is that it is at least partially the result of an approach to planning that is defensive — instead of offensive — in nature. We plan around and bow completely to existing contexts. We plan to mitigate impacts. We plan to satisfy some very individualistic concerns about how cities and neighborhoods should be built. For better or for worse, we plan to piss off the least amount of people. Politics also play an outsized role.

    What is far less common to think about is how to plan offensively. The fact of the matter is that the Paris we all love today pissed off a lot of people when it was being constructed. The approach was top-down and hugely disruptive. It ignored and completely erased much of the city’s previous urban context. Artists at the time, and probably many others, despised the new regularity of Paris’ street wall buildings. They longed for the old hodgepodge of medieval blocks and the visual variety that they created. But today, it’s hard not to think of this offensive move as anything but visionary. Of course, there are also countless examples of top-down offenses turning out terribly bad for cities.

    Perhaps the right approach, then, is to simply start being more deliberate about introducing elements of planning offense. My friend David Wex of Urban Capital likes to remind me that Montreal is a city with grandeur and that Toronto, for the most part, is a city without it. So as I have argued before, over here, I think it’s time we rethink our approach. Instead of just worrying about things like shadow impacts and angular planes (defensive), we should also be asking ourselves offensive questions. How refreshing would it be to sit down in a project meeting and have someone ask: “Okay, but does this design contribute to the overall grandeur and beauty of our city?”

    And maybe once we take this new perspective, we’ll come to the conclusion that sometimes it’s okay to put buildings close together.

  • Net flow of households across US regions

    These are a set of diagrams taken from a recent WSJ article talking about how, “the pandemic changed where Americans live.” I know that this is a topic that gets a lot of air time (both here on the blog and elsewhere), but these diagrams do a good job of showing the flow of people, as well as how things may have changed/accelerated since 2018.

    These diagrams also remind me of the work of Charles Joseph Minard. A French civil engineer, Minard is best known for his contributions to the field of information graphics, and in particular his flow maps. His most famous piece of work — which I happen to have hanging at home — is his depiction of Napoleon’s losses during the Russian campaign of 1812.

    The map itself is from 1869 and is packed full of information. It shows the number of Napoleonic troops as they left for Moscow, the distance they traveled, the outside temperature (the French weren’t properly prepared for the cold), latitude and longitude, the direction of travel, and the location of the troops relative to specific dates.

    The point of the diagram was really to show how disastrous this campaign was for Napoleon. The thick beige band on the left is showing over 400,000 troops setting out. But by the time they reached Moscow — which, by the way, had been abandoned before their arrival — only about 100,000 troops were left.

    The thin black bar on the bottom is showing how many troops ultimately remained and returned at the end of the campaign — the number was only about 10,000. So the vast majority of Napoleon’s troops perished. Supposedly over half either starved or froze to death.

    Some 150 years later, and we are still using flow charts to clearly depict the movement of people and things.

  • In support of rubber chicken

    https://twitter.com/donnelly_b/status/1388118381241450501?s=20

    This morning I attended ULI Toronto’s annual “Meet the Chief Planners” event. (Some of my random tweets from the morning can be found here.) Now in its 7th year, it is a great event where all of the chief city planners from around the Greater Golden Horseshoe area come together with professionals from the land use community to network and discuss the future of our cities.

    Normally it happens in the evening over dinner and drinks, which is how I attended last year right before our first lockdown (we were at the elbow bump and foot tap stage of the pandemic). But this year it was of course online.

    First, I would like to say thank you to Multiplex Construction Canada (our partner on Junction House) for the invite. And secondly, I would like to say kudos to Richard Joy and the rest of ULI Toronto for coordinating such a great event with over 400 virtual attendees.

    However, the main point that I would like to make today is that I don’t know how anyone can attend a virtual conference and believe that this is some sort of “new norm.” I don’t know about all of you, but I am ready to go back to rubber chicken dinners and too many glasses of affordably priced wine — pronto.

    I say this not to criticize any of the groups that are working hard today to organize virtual events. I am a big fan of ULI and the work that they do. I would encourage all of you involved in the built environment to join immediately if you’re not already members.

    Instead, I say this as yet another piece of evidence for why I won’t stop writing and talking about the resilience of our cities. Video calls are such an awful substitute for sitting around a table with people and breaking bread. It’s not even close.

    And so as I sat at my home office desk this morning, listening to the conference and eating McDonald’s hotcakes (because, hey, Uber Eats and because, hey, it’s Friday), I couldn’t help but be reminded of how bullish I am on cities and city life. This, I thought to myself, is why cities are such a centralizing force.

    Ultimately, it is also why groups like the Urban Land Institute are so important. It is because our cities matter a great deal and because they’re not going anywhere. If you aren’t sick of me talking about the resilience of cities, you can also find me in this recent RENX article called, “Toronto residential tower boom shows no signs of slowing.”

  • Uninterrupted flow

    Adam Grant’s recent NY Times article about languishing — the psychological middle state that exists somewhere in between depressed and flourishing — has been making the rounds online. Perhaps it is because COVID sucks and many of us can relate.

    Either way, three points in the article really stood out to me (at least one of which, in my mind, directly ties back to real estate).

    Firstly, I found it helpful to hear him describe what flourishing is. In his words, “flourishing is the peak of well-being: You have a strong sense of meaning, mastery and mattering to others.” This resonates with me. I know that I am at my best when I’m accomplishing things and making progress.

    Secondly, he puts forward a possible solution to languishing — it’s the concept of “flow.” Flow is when we are absorbed in meaningful and challenging work and where, again in his words, “your sense of time, place and self melts away.” This also resonates with me. I am a big fan of a flow (even if I didn’t know what it was called).

    Thirdly — and this one is important as we all think about the future of work/office space — focus is paramount to doing exceptional things! Here’s an excerpt that I immediately paused on as I was reading the article:

    Fragmented attention is an enemy of engagement and excellence. In a group of 100 people, only two or three will even be capable of driving and memorizing information at the same time without their performance suffering on one or both tasks. Computers may be made for parallel processing, but humans are better off serial processing.

    For the rest of Grant’s article, click here.

  • Placemaking as economic development engine

    Earlier this year, the first phase of The Underline opened up in Miami’s Brickell neighborhood. Designed by James Corner Field Operations, The Underline is an eventual 10-mile linear park that will live underneath the city’s elevated Metrorail and run from the Miami River all the way south to Dadeland South Station.

    The first phase — called Brickell Backyard — is the shortest phase at only 0.5 miles. But it cuts through one of the densest parts of the city, if not the densest. Total construction costs for this phase came in at $16.524 million and here’s where that funding came from (source is The Underline):

    $7,688,760 Miami-Dade County
    $1,944,000 FDOT TAP Grant
    $2,000,000 State of Florida
    $4,871,690 City of Miami
    $19,808 FDOT

    The Underline is clearly looking to the example of New York’s High Line, which was also designed by Field Operations. And for good reason: The High Line is a shining example of placemaking as economic development engine.

    The first two phases of The High Line cost around $153 million to construct. But as of 2014 (when I wrote about it here) it was already attracting some 5 million visitors a year and was believed to be responsible for about $2.2 billion in new economic activity. I’m sure the numbers are much higher today.

    As city builders, we are always looking for ways to create value and spur economic development. But it’s perhaps important to keep in mind that the underlying goal isn’t all that complicated: Create cool places where people want to be.

    Images: The Underline

  • NFTs, luxury brands, and reclaiming ownership

    Here is an interesting interview discussion about NFTs (non-fungible tokens) and the world of luxury brands. It’s a conversation between Benoit Pagotto, cofounder of the NFT brand RTFKT Studios, and Ian Rogers, who is Chief Experience Officer at the blockchain startup Ledger (he was previously the Chief Digital Officer at LVMH). Below is an excerpt that stood out to me. It starts to speak to the potential of NFTs for fashion/luxury brands. Rogers also makes an interesting comparison to the music industry in that things are playing out very differently today compared to what happened back in the late 90s.

    Benoit is proving that he can basically sell a $4,900 digital good alongside a $100 physical good. Now imagine when the lightbulb goes off in Adidas’s head, that the item on adidas.com comes with a digital collectible and the item at “retailer dot com” does not. It fits with their focus way more than the internet did. The internet didn’t fit in any incumbent’s focus. It was the opposite. It was like, “Oh my God, this threatens our monopoly in some way,” right? For the music business, it was, “Wait a minute, we want to sell a $17 compact disc, not a $1 digital file.” They got dragged into that world. 

    On a related note, it was recently announced that model Emily Ratajkowski has made an NFT containing a photograph of herself standing in front of a Richard Prince print that had previously appropriated one of her photos. (Richard Prince’s artwork is known for appropriation.) So this is an exceptionally neat idea. Here she is using an NFT to try and take back some control. Basically: You took my photo and then profited from it. So now I’m going to stand in front of that image, take a new photo, and then reclaim some ownership using the blockchain. Is this the future?

  • Where Americans moved over the last year

    According some recent data from the US Census Bureau and USPS (via this CityLab article), the number of Americans who registered (between March 2020 and February 2021) that they were making a permanent move somewhere else, only increased by about 3%. And the vast majority of people that did move tended to simply spread out and move within the same metro area — about 84%. About 7.5% moved within the same state. And about 6% moved to some other top 50 metro area in the US.

    Some are of the opinion that these moves to the outskirts of cities would have happened regardless. The pandemic simply sped things up. Perhaps. But whatever the case may be, CityLab and others have argued that an “urban exodus” is likely the wrong way to describe what is happening. Despite reports that everybody seems to be moving to Texas and Florida (yes, Miami saw a spike), most people are simply spreading out in geographies where they already happened to live.

    The notable exceptions are the Bay Area and New York. San Francisco and San Jose — both of which usually register as being two of the most expensive housing markets in the US — saw permanent moves increase by 23% and 17%, respectively. Compared to other metro areas in the US, these figures stand out. (I assume this data is collected after somebody goes to the post office and says that they want to change their address forever.)

    But we are already seeing net outflows from San Jose and San Francisco start to taper off (see above). It’s also important to keep in mind that these cities were losing people well before the pandemic started. They are expensive places. And the fastest growing cities tend to be ones that sprawl, have a more elastic housing supply, and are consequently more affordable. That said, I suspect we’ll see this tapering off continue. The “urban exodus” isn’t going to be what it’s cracked up to be.

    Images: CityLab

  • Nearly half of the world’s population now lives in a country with a fertility rate below replacement levels

    Prior to COVID, many projections had the world’s population plateauing sometime in the second half of the 21st century. This is expected to happen because about half of the world’s population now lives in a country where the fertility rate is less than the replacement rate of 2.1 children for every woman. See above chart from The Economist.

    At the start of the pandemic, there was talk of a possible COVID baby boom. People were/are stuck at home and so that would surely translate into more sex among partners. But that doesn’t appear to have been the case for many countries. According to The Economist, births fell by 15% in China last year. The same drop was recorded in the United States last year between February and November.

    Because of this trend, the above projections are now being adjusted and pulled forward, with some predicting that the world’s population could plateau as early as the 2050s. That’s only about 30 years from now, which means that quite a few of us could end up living in a world with a declining population. This is likely to have both positive and negative consequences.

    There are nearly 8 billion people in the world today with China and India being the countries with the greatest numbers. But it’s interesting to consider how recent this figure really is (compounding takes time to gain momentum).

    The world didn’t hit a billion people until the 19th century, and the second billion was only reached by the 1920s, which in the grand scheme of things, isn’t that long ago. Since then the global population has exploded with about 6 billion people being added in only the last 100 years. That’s pretty wild when you think about it.

    P.S. I recently discovered a site called outline.com. It allows you to read, highlight, and annotate articles that you find online. But it also seems to allow you to read articles behind paywalls. Perhaps some of you will find that useful.

    Chart: The Economist