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Bright Moments should come to Toronto

I love what Bright Moments is doing. And Fred Wilson’s post this morning — about their latest event in Mexico City — reminded me of that.

Bright Moments describes themselves as “an NFT art collective on a mission to create environments where artists and collectors witness the birth of generative art together.”

What this means is that they are working to move the experience of NFT art away from individual computer screens toward physical events where the art can be consumed and also created (i.e. minted) in a group setting.

For a taste of what this actually means, check out their website and then hang out for a bit with their homepage video.

So far they have hosted an event in the following 5 cities: Venice Beach (okay, actually a neighborhood), New York, Berlin, London, and Mexico City. And at each stop on their tour of what will be 10 places, they have done an in-person minting of their official collection, called CryptoCitizens.

I haven’t been to one of them, but I can see how it would be a lot of fun and how it might change your perception of NFTs. So I am hoping that for one of their last 4 stops (the first stop was in the “Galaxy”), they’ll come to Toronto. Ethereum was pretty much created in this city, so I think it only makes sense for there to be Toronto CryptoCitizens.

If you too would like to see this happen, make sure you tweet at Bright Moments and tell them that they should come to the greatest city in the world.

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What gentrification looks like

One criticism that you will sometimes hear about development is that the construction of new housing can spur gentrification. The thinking, I think, is that when you create new market-rate housing, richer people will then move in and the area will begin (or continue) its ascent upwards.

If on the other hand, one were to just stop developing new housing, then the neighborhood would remain stable and static and the fear of gentrification would simply go away. But the flaw in this line of thinking is that it assumes no infill development equals some sort of urban homeostasis.

Cities are constantly changing. The reality is that what we are talking about, particularly in the case of low-rise single-family areas, is that we want the physical character of neighborhoods to remain more or less the same. But what happens on the inside is whatever.

Here’s an example:

What you are seeing here are 4 electricity meters, meaning that at some point this structure housed 4 separate homes. But 3 of the 4 meters have now been removed, which presumably means that this structure has been converted (probably back) to a single-family home. So this is 4 homes being reduced to 1.

I don’t know what this place looks like on the outside, but I’m going to guess that not much has changed in terms of its physical character. It probably looks about the same. But this is still gentrification; it is still an example of a neighborhood moving upmarket.

The irony is that we tend to be generally okay with this change. We are okay with reducing the number of homes in a neighborhood so long as it happens in a largely inconspicuous and convenient way. But what we are (sometimes) not okay with is increasing the number of homes in a neighborhood. Apparently that creates too much pressure on the existing housing stock.

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The next hot thing

When I was in grad school at Penn I was active in two clubs: the real estate club and some tech/entrepreneurship club (I can’t remember the exact name). These were two areas that I was interested in and so I wanted to hang out with people who were also interested in these things and I wanted to hear from experienced people who were active in these fields.

At that time, which was before the Great Recession, the real estate club was bigger and more active than the tech club. I think it was something like 3 to 1. But I remember one of my professors telling me that participation across the various clubs generally ebbs and flows. Before the dot-com bubble, the tech club was where you wanted to be. But that asset bubble had burst, and so people had moved onto real estate, which, at that time, was in the midst of creating its own asset bubble.

What we students were effectively doing — by way of deciding where to spend our time — was chasing the next hot thing. They were chasing where they thought they’d be able to make the most money coming out of school. There is, of course, nothing wrong with this. The pursuit of profit is fundamental to capitalism. But at the same time, I think it’s crucially important to have some conviction.

Right now we are going through another cycle. Real estate was hot last year and it is not right now. Tech was hot last year and it is not right now. NFTs were hot last year and they are not right now. The list goes on. But if you like these things and if you have some conviction, is it really the time to move onto the next club? You may find the opposite to be true. Now is actually the time to ramp up participation.

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Families in multi-family buildings

There is an ongoing debate in Toronto, and many other North American cities, about how to encourage more families to live in multi-family buildings. And here that has generally translated into (1) mandating a certain number of larger family-sized suites and (2) creating design guidelines to better equip both suites and buildings for families.

But what we often ignore is the very real economic reality of buying a large family-sized suite. If you look at the latest Q3-2022 data from Urbanation, the average price of a new condominium in the entire Greater Toronto Area right now is about $1,427 psf.

So if assume that a good family-sized suite is, oh I don’t know, 1,200 sf, the average price would be about $1.7mm, before you add in any parking (if necessary).

If this is too big and you can get away with something more similar to a post-war bungalow — let’s say 900 sf — you’re still at nearly $1.3mm, again before any parking. At these sorts of prices, you have a few options, particularly if you’re willing to sprawl outward. And I think it’s important to recognize this.

The other hurdle remains our industry’s requirement to pre-sell suites in order to obtain financing and start construction. What this effectively means is that you need buyers who can say to themselves, “I’m probably going to need a family-sized suite for the 1.4 kids I may have in 4-5 years.” This isn’t for everyone.

So if we are truly serious about encouraging more families in multi-family buildings (which is an obviously good idea), I think it can’t just be viewed as a design problem and/or the result of greedy developers who just want to profit maximize by building smaller suites. We need to be looking at both the cost structure behind these homes and new ways to finance them.

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Are multi-way boulevards at least part of the answer?

This short video by City Beautiful makes the case for multi-way boulevards. The way to generally think about a multi-way boulevard is that it is a really big street that has been subdivided into areas that move cars relatively quickly and into areas that are a bit more conducive to calmer traffic and doing things like cycling and walking. More specifically, they are streets that have local access lanes on either side.

And in this video, it is proposed as a possible fix for two kinds of situations: (1) as a solution for what to do when you take down an elevated highway and (2) as a solution for retrofitting suburban arterial roads. I thought this would be a good video to share given that I can think of an elevated highway that should come down and because I have written before about how challenging it can be to change streets after they’ve been built. They tend to be pretty sticky.

But beyond this, it’s also a good primer on how suburban transportation approaches are highly effective at making cities that you can’t walk around in.

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World’s largest 3D-printed community

I’m not sure how I missed this before, but ground has just been broken on what is being called “the world’s largest 3D-printed community.” Co-designed by ICON and Bjarke Ingels Group and “implemented” by Lennar, the community, which is located north of Austin, Texas, will consist of 100 homes ranging from 1,500 to 2,100 square feet. There are 8 different floor plans and 24 different elevations to choose from. Each home will also come with rooftop solar panels.

Here’s a short description on how the overall construction process is working:

To automate the manufacturing of homes ICON is using its Vulcan robotic construction system, a large, transportable printer that can be used in tandem with Magma, a cement mixing machine. The homes are being constructed out of Lavacrete, a durable-concrete polymer added in layers to form the structure’s facade and foundation by Vulcan. Their design blends Texas ranch vernacular with sustainable technology, providing a model for the future of large-scale 3D construction. The residences will adhere to a common design, featuring metal roofs, concrete floors, and distinct curvilinear and rib-textured concrete walls, which are the product of 3D printing.

It is quite a different looking construction site:

Now, there is certainly a conversation to be had about what these machines are building as a housing typology: This is still suburban sprawl, regardless of how the homes are being made and if there are solar panels on the roof. But if you ignore all of this for a minute, there is obviously something pretty incredible about 3D printing being able to now deliver stuff at the scale of a suburban housing project. It represents a fundamental change in how we build, in an industry that has a long history of changing very little.

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Bill 23 is more homes built faster

The government of Ontario is trying to encourage the construction of a lot of new housing over the next 10 years. More specifically, the plan is for 1.5 million new homes from now until 2033. To have a chance at hitting this target, the province has rightly recognized that some things will need to change around here and so they’ve been busy coming up with legislative changes such as Bill 23 (the More Homes Built Faster Act, 2022).

The Bill is really long, so I personally appreciate it when the act name itself does a good job of summarizing what it’s all about: more homes, built faster. But if you’d like to read the entire thing, you can do that over here. I also attended a breakfast this morning — put on by Goodmans — that provided a great summary of the key points. I took all of my notes on Twitter through a live stream, so if you’d like something more digestible, click here.

At a very high level, I would say that there are some obviously good changes in the Bill and some other things that will need refinement, such as the proposed changes around third-party appeals. The devil is in the details. And that was actually one of the key takeaways from the breakfast: This government is not afraid of being bold, moving quickly, and then working iteratively with stakeholders. It’s a less typical approach for government, but done is better than perfect, right?

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Distributed Japanese capsules

Japanese Metabolism was a post-war architectural movement that was based around the idea that cities and buildings should be able to grow and transform just like other organisms. There are other elements to the movement, but this was at its core. And perhaps the best example of the Metabolism movement was the Nakagin Capsule Tower in Tokyo (pictured above).

Constructed between 1970 and 1972, the 13-storey tower consisted of two structural elements and 140 self-contained / prefabricated capsules that were hung off the building’s cores.

The original intent was that these capsules could be removed and replaced over time and that the building could evolve just like any other organism might. But that never really happened and, coming on the end, only about 30 of the 140 capsules were apparently still being lived in, with the others being used for various purposes, such as storage, or not at all.

And so after a whole lot of debate, the building was disassembled earlier this year, which isn’t quite the same as a straight demolition. The pods were removed and then the core came down.

But a number of the pods have been salvaged. The architect’s family took 4 pods and created an Airbnb retreat a few hours outside of Tokyo. And a longtime resident in the building decided to quit his job, acquire 23 of the capsules, and dedicate his life to now getting these things into museums and other commercial settings.

I don’t feel like it’s my place to comment on whether disassembling the tower was a good idea or not. But I do think there’s something poetic about an icon of Metabolism having its capsules removed, restored, and then sprinkled around various places. Wasn’t that always kind of the intent?

Photo by Roman Davydko on Unsplash

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Bikes and property in Paris

I have been reading Fred Wilson’s blog for over a decade now (and he has been blogging for almost two decades). A lot of the time it is about venture capital and tech, but similar to what I do here, it can be about almost anything. Today he wrote about the two weeks that he just spent in Paris with his wife (the Gotham Gal). And the post covers everything from real estate to relationship advice. But here are two points that will be particularly relevant to what we usually talk about around here:

  • Paris has done an excellent job of prioritizing cycling and building a ton of new lanes over the last number of years. We know this. But another good point that Fred makes is that Paris has allowed competition in their micro-mobility ecosystem. It started with Velib, but now you can also use Dott and Lime. The last time I was in Paris I used Lime bikes and scooters, mostly because I already had the app and because they were everywhere. Competition is good and Toronto should probably allow the same. Our bike share system — specifically the mobile app — is incredibly cumbersome to use, and the last time I checked most of the e-bikes were consistently out of service. Let’s see if someone else can do a better job. We should, of course, also add scooters to the mix while we’re at it.
  • Next, Fred describes Paris’ real estate market as being more “stable.” And by this he means that, for whatever reason, values and rents seem to be more moderated. This has some benefits. Restaurants and other retail businesses seem to stick around for decades, whereas according to Fred, “it’s hard to find a shopping street in Manhattan that doesn’t have multiple vacant stores”. I’m not exactly sure why this is the case in Paris (assuming it is). I don’t believe that they have any sort of vacant store tax. Though they do have a tax on unoccupied homes. Maybe this is just what happens when you’re a little less capitalistic. (This is me deliberately avoiding the term socialism.)

If any of you have more insight into the real estate market in Paris, I would love to hear from you in the comment section below.

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Two multi-family booms

Here is an interesting chart, from Mike Moffat, that looks at housing completions — both ownership and rental — in the province of Ontario. The way to read this chart is that, for each date, you are looking at completions for the previous 10 years. (It says 12, but that seems to be a mistake.) For example, Q4-1964, which is the start of this chart, equals all homes built between Q1-1955 and Q4-1964.

Three things will probably immediately stand out to you:

  1. We built a lot of multi-family housing in the 1960s and 1970s. In fact, we built more than we’re building right now and that wasn’t just the case in Toronto and Ontario. In Canada as a whole, the majority of building permits (60%) issued between 1962 and 1973 were for multi-family buildings. More specifically though, this was a rental apartment boom, as opposed to a condominium boom.
  2. We then said: “Nah, let’s not build so many apartments anymore. Let’s go back to building more single-family houses.”
  3. And that’s what we did — by a fairly wide margin — until the early 2000s when the next great multi-family boom started to take hold. This time, though, it developed into a condominium boom.

Both multi-family booms have mirrored periods of overall economic expansion. But you also need to look at what government was doing. In the 1960s and 1970s we made it attractive to build rental housing (whereas today it’s a very challenging asset class to underwrite). And then more recently, we decided that much of our growth should happen in existing built-up urban areas. That generally means more multi.

But multi-family is a fairly broad term. Are we talking about 4-storey walk-ups or are we talking about 40-storey tall buildings? For those of you who are able to look through this chart to what’s happening in the market, you’ll know that we are far more effective at the latter. We have a lot of work to do when it comes to the in-between housing scales.