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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  • Swiss running brand On opens NYC flagship

    Swiss running brand On recently opened up a new flagship store in NYC’s NoHo district. It was designed by the Swedish architect and designer Andreas Bozarth Fornell (whose firm is called Specific Generic), and I think it’s a good example of the whole push toward “experiential retail.” Before Zappos there was a belief that nobody was prepared to buy shoes online. Surely shoes are something that you need to try on to make sure that they fit properly. But then Zappos and Tony Hsieh came along and decided to offer free returns so that you could just order a few different sizes to try on at home and return the ones that don’t fit. And then just like magic, we’re now living in a world where I myself couldn’t tell you the last time I bought a pair of shoes offline.

    What is obvious at this point is that people will buy pretty much anything online — everything from boats and real estate to shoes and tires — and so, in many cases, the physical retail experience needs to be exactly that — an experience. Something special. What On has done with their flagship store in NYC is try and create a space that, among other things, tells their brand story, acts as a hub for the local running community, and offers up a unique technological experience that is likely pretty difficult to replicate online. One of the key features is a “magic wall” that analyses your technique and scans your feet as you run past it (pictured below). The invisible foot scanner is supposed to help you find the perfect shoe size, accurate to within 1.25mm.

    If you’re a serious runner, I could imagine this being a pretty appealing in-store experience. (And if you’re not a runner, I guess you could just take a selfie in front of the magic wall. People seem to like pink walls). Whatever the case may be, I think On has done a great job trying to rethink the retail experience around its brand story and philosophy. But it leads me to a bunch of questions. Which brands and/or products are suitable for a new retail experience? (Does toilet paper, for example, want a new high-tech warehouse space in NoHo?) Assuming we continue down this path toward experiences, does this ultimately lead to less retail space per capita? Probably. And if we’re destined for less space, what does that ultimately mean for the ground floor experience of our cities? What should these spaces become? How does street life evolve?

    Cities aren’t going anywhere. But change is inevitable.

    Images: On

  • Economies of agglomeration in London

    The Financial Times is running a series right now on the future of the City of London. In their latest article, they looked at “How London grew into a financial powerhouse,” while at the same time comparing it to other global financial centers. It’s interesting to see how much of a banner year this was for companies going public. Companies listing on the Nasdaq and the NYSE raised a record $150 billion in 2020. This is compared to about $6 billion raised in London (both the London Stock Exchange and AIM). But what I really want to draw your attention to are the below maps from FT showing the clustering of banks, hedge funds, asset managers, insurers, and professional services firms in London. This is what urban agglomeration economies look like.

  • The history of humankind’s greatest invention

    A number of people emailed me this past weekend saying that they appreciated the recent book recommendation — something to read over the holidays. So here’s another one: Metropolis — A History of the City, Humankind’s Greatest Invention.

    Right now is probably the ideal time to read a book about the history of cities because it’s a reminder of just how resilient cities are in the face of adversity. Even ones that have been utterly wiped out because of war or some other catastrophe have managed to successfully rebuild.

    If you’d like to buy a copy, you can do that over here. This book was also featured in part two of a “book club” that The Urbanist is running on its radio show right now. So if you’d like to take it for a 30-minute spin instead, click here.

  • Building cool things is not as easy as it may seem

    There was a good discussion on Twitter this morning about small-scale commercial uses in residential neighborhoods, like the coffee shop shown above on Shaw Street. In most residential neighborhoods in Toronto, this kind of commercial activity is not permitted if you were to try and initiate it today. The small convenience stores and bodegas that remain are often legal non-conforming uses. And while generally considered desirable in their current confirm, if you were to try and make a change, you could get caught in some municipal red tape where your grandfathered status suddenly no longer applies.

    That is exactly what happened in the case of the above coffee shop and, from the discussions that happened on Twitter this morning, it is a problem that is not unique to Toronto. Alex Bozikovic wrote about this coffee shop and this project in the Globe and Mail over seven years ago. Getting it approved and built was no easy task. And my friend Jeremiah Shamess — who renovated a similar and formerly commercial corner building in the area — ran into the exact same challenges.

    But let’s consider the other side of this argument for a minute. It’s easy to look at a great and well-designed neighborhood coffee shop like this one and say to yourself that it is obviously a desirable use and that we should be encouraging more of them in our residential neighborhoods. But what if it was a noisy late-night bar, a nail salon, or a massage parlor? Would your opinion change? Would it change if you were an immediate neighbor? It is perhaps easy to see why the fear of the things we don’t want has led us to sterilize our neighborhoods to the point where we no longer allow the things that we may in fact want.

    And herein lies the immense frustration that many of us have with our land use policies. There are countless examples of obviously desirable uses and built forms that are exceedingly difficult to execute on because of the barriers that we ourselves have put in place. Whether it’s a cool neighborhood coffee shop or new affordable housing, there are far too many examples of these sorts of projects being stuck in some kind of planning ether — sometimes for decades. We say and know that we want these things, but then it is frequently the case that we can’t get out of the way so that they can actually happen.

  • Where people are moving in the US

    Another day, another set of announcements about large companies and rich people moving to lower cost US states. Yesterday it was announced that Oracle will move its corporate headquarters from Silicon Valley to Austin, Texas. (If you remember, Elon Musk also recently announced that he had moved himself to Austin from California.) The company has said that the move puts Oracle in the best position to grow and to give its employees greater flexibility about where and how they work.

    While these sorts of moves are making headlines right now, it’s important to keep in mind that this is not necessarily a new phenomenon. In fact, depending on how you look at it, you could argue that these headlines are a lagging indicator for trends that have been underway for some time. Below is a chart from New Geography showing the top 50 state-to-state moves last year. Number one is the move from California to Texas with 45,172 net movers. And number two is the move from New York to Florida with 38,512 net movers.

    According to New Geography, California saw a net domestic migration loss of 912,000 people from 2010 to 2019. And the most popular receiving states are what you would expect: Florida (1,230,000 people) and Texas (1,146,000 people). A big part of this story obviously has to do with housing affordability and the search for an overall lower cost of living. As well, since companies are always in need of young and smart talent, it makes since for them to locate in places where young and smart people want to live.

    But urbanists like Richard Florida have also pointed out at this relocation of companies could be a leading indicator for something else: the decline of innovation in America. Here, he argues that in the nascent stages of a new invention, there tends to be a tight clustering phenomenon. Think steel in Pittsburgh, cars in Detroit, and computing in Silicon Valley. However, as the industry matures, the tendency to centralize seems to decline and companies then start moving around.

    I’m not yet convinced that this is what’s happening. Because there seems to be a pile on happening in specific cities like Austin (which, by the way, I hear is terrific). Even before this pandemic, there was a growing sense (from the outside, mind you) that the Bay Area had simply gotten too expensive, both for individuals and for companies. It would seem that when you greatly restrict the supply of new housing and make it unattainable for many, people go find housing somewhere else. Sometimes in other states.

    Photo by Tomek Baginski on Unsplash

  • The 99% Invisible City

    Roman Mars and Kurt Kohlstedt of the 99% Invisible podcast have a recent book out that is all about cities. True to their radio show, it is about the often-overlooked design choices that have shaped and continue to shape our cities. Everything from why jersey barriers are curved the way that they are to how roadway centerlines came to be. The book is called The 99% Invisible City: A Field Guide to the Hidden World of Everyday Design. And in some ways, it is what I try and do on this blog every day; look a little deeper and look at things — often cities — from a slightly different perspective (though I am no Roman Mars). So I think that many of you will appreciate this book. If you’d like to learn a bit more about it, here’s a recent interview that Roman did with StreetsBlog.

  • Condo transaction volumes in Miami-Dade county are up 61.4% year-over-year

    This pandemic seems to have been good for real estate located in places that people like to spend time in, but maybe had to limit their time there in the past because of things they had to do like, you know, work in an office. This includes everywhere from “cottage country” outside of Toronto to sunny destinations like Miami.

    Here are some figures that I came across for South Florida via Analytics Miami. Comparing November 2020 to a year prior, condo transaction volumes in Miami-Dade country are, interestingly, up 4.3% for condos less than $1 million and up 61.4% for condos worth more than $1 million.

    Somewhat similarly, single family home transaction volumes in Miami-Dade county (for the same time period) are down 5.2% for houses worth less than $1 million and up 100% for houses worth more than $1 million.

    Sometimes you see a decline like this (the -5.2%) because there simply aren’t enough houses on the market for less than $1 million. But it could also be that more rich people are looking for expensive properties in Miami compared to last year.

    As you may have gathered from here and here and here, I’m not all that bullish on the permanency of this whole working from home thing. But there’s no denying that there’s a very clear trend around people moving to places that are warmer. This was happening well before COVID-19.

    There is also some evidence that rich people are starting (continuing?) to eschew high tax states like California for lower tax states like Florida and Texas. I don’t have the data to be able to comment on how meaningful this trend is, but, for whatever it’s worth, apparently Elon Musk just moved to Austin.

    Photo by aurora.kreativ on Unsplash

  • How not to build missing middle housing

    Here is a good example of why “missing middle” housing is so challenging to build in Toronto, despite everyone talking about how great it would be if only we could build more of it.

    It’s the story of a minor variance application that was asking to sever a 50-foot lot at 2165 Gerrard Street East so that two semi-detached buildings and two laneway suites could be built. It would have added 10 family-sized rental units to a site that is on a streetcar line and that is within walking distance of both the subway and regional rail. And yet the consent to sever was denied.

    How come you ask?

    “I don’t believe dividing the property is in the best interest of the community,” said committee member Carl Knipfel, himself an architect and planner who complimented the beauty of the existing house and critiqued the design of the new buildings. “What is proposed is too dense … I really have serious concerns as to where this consent may lead us.”

    The last sentence is the best part.

    The article then goes on to argue that this is really all about the supremacy of single family homes and the desire to keep renters out of these neighborhoods. (Hey Airbnb, it’s not just short-term rentals that people have a problem with; it’s also long-term rentals.)

    The kicker, for Mr. Galbraith [the project’s planner], is he knows if he wanted to sever the lot for two single-family homes he could get that permission without delay and likely also get permission to build more than local zoning allows.

    “I can get variances for a one-unit McMansion every day of the week,” he said. “Lot coverage variances are very common; you want to take a bungalow down and make some big ugly house with a weird roof and a high first floor? You see those all over East York and Etobicoke.”

    If missing middle-type housing is “too dense” for sites that are endowed with every form of fixed rail transit that we have available in this city, then your guess is as good as mind as to where the hell it’s supposed to go. It’s time to grow up Toronto.

  • The maker’s schedule

    Four years ago I wrote about a great essay that Paul Graham had published way back in 2009 about two different kinds of schedules: the manager’s schedule and the maker’s schedule. Put differently, the manager’s schedule is one of command. It is for bosses to drop in for 15, 30, or 60 minutes at a time, say a bunch of things, and then jump to the next meeting.

    The maker’s schedule, on the other hand, is one of doing, whether that be programming or working on an excel model. And the reality is that you can’t make or do much with only 15, 30, or 60 minutes. To make anything of real substance you need longer uninterrupted blocks of time. You need time to get into the zone.

    I’m reminded of this dichotomy now, more than ever, because of video conferencing. It has never been easier to overload a calendar with meetings. Consequently, it has never been easier to screw up a maker’s schedule.

  • I want an expensive condo

    The Globe and Mail published this headline today: “Developers building more small condos, despite people clamoring for more space.” It’s behind a paywall and so some of you may not have read it. But the data looks something like this. Of all the new condo project launches that happened this year in Toronto, studios and one-bedroom suites accounted for 61% of all new inventory, according to Urbanation. This is a higher percentage than what the market saw in 2019 and 2018, and this is despite the fact that many/most people are still working from home and would probably appreciate a bit more space.

    The short answer as to why this is happening is affordability. For years I have been clamoring for a dual aspect oceanfront penthouse on Miami Beach, but that time hasn’t come for me yet. Things cost money. And the downward pressure on unit sizes is a direct result of developers trying to ensure that their inventory is within the reach reach of buyers (there’s a sweet spot somewhere in the range of $500-700k right now). Developers are heavily incentivized to build what sells and rents, both quickly and at the highest price. That tends to be smaller units, especially early on.

    Where this goes in the future is anybody’s guess. But with the dramatic price increases that we have seen on the low-rise side of the market, I suspect that we’ll see a subsequent surge in demand for condos — maybe even larger condos.