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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  • Driving distance between two adjacent homes

    I came across this tweet by Sean Galbraith last night. You will probably need to click through to see the full extent of the photos. It is a series of images showing two back-to-back houses. The lands touch one another. But if you were to drive from one house to the other, it would take you about 18 minutes because of the area’s road network. Approximately 7.1 miles.

    This, of course, is far from urban. It would take over two hours to walk this same distance (assuming an average walking speed of 1 mile every 18 minutes). If you’re an urbanist, this is surely galling to you. But I think it’s also important to remember that this is, at least partially, a result of a consumer preference for dead end streets that limit through traffic.

  • Average living space per person in Hong Kong

    This recent NY Times article — which makes the case that the current protests in Hong Kong are at least partially a result of inequality — has a pair of interesting diagrams that speak to the city’s tight housing market.

    The first compares average living space per person in Hong Kong to Paris and New York City. New York City appears palatial compared to the illegally subdivided apartments that are discussed in the article.

    The second looks at housing affordability as a multiple of median household income. Hong Kong is over 20x. I am curious what median incomes were used for each of the cities. A small denominator makes the multiples look worse.

    In this chart, New York also includes the entire metropolitan area, which would help to improve its affordability ranking. So one could argue that this isn’t really a fair comparison.

    At the same time, none of this changes the fact that Hong Kong has some of, if not, the most expensive housing in the world.

    Images: NY Times

  • Toronto approves city-wide expansion of laneway suites

    This a big month for laneway (housing) advocates in Toronto. Last week, City Council voted in favor of expanding the policy provisions for laneway suites to all Neighbourhoods within the city. (Neighbourhood is a defined term in the city’s Official Plan.)

    Previously, the policies — which allow laneway suites to be built as-of-right — only applied to the Toronto & East York Districts. Here’s a copy of the recent staff report in case you would like more information.

    On Monday, my friend Alex Sharpe (of Lanescape) was on BNN Bloomberg talking about why this is a good thing for the city. Alex and the rest of the team at Lanescape have been instrumental in these policy changes.

    If you’re a Toronto homeowner with a property that fronts onto a laneway, I would encourage you to consider this opportunity. It’s a way to increase the value of your home and it’s a way to create more rental housing in this city.

  • Smart home market penetration in Canada and the US

    Here are the results of a Global Consumer Survey that was conducted in Canada this year (2019) and that asked respondents whether or not they own a smart home device. That is, a device that can be controlled via a smartphone / internet connection.

    Even with all of the concerns around privacy, virtual assistants (such as Amazon Alexa and Google Home) appear to be the most popular device with Canadians. Next are connected speakers and smart thermostats.

    The vast majority of respondents (68%) stated that they don’t own any smart home device. However, if you look at the trend lines for Canadian household penetration in the “smart home market,” this is naturally changing:

    Curiously, there appears to be a household penetration rate spread between Canada and the US, with the US exhibiting meaningfully higher numbers. Here is the US chart:

    Based on these charts, the lowest penetration rate appears to be for “energy management” devices, which would include anything that helps households reduce energy consumption. The rates are the lowest in the case of both Canada and the US.

    This is a bit unfortunate given that energy management is an important one. But it’s also one that isn’t best addressed with only a few smart devices. It should involve a more holistic approach to the way in which we design and build homes.

    All charts and data taken from Statista.

  • The Information Age: Tech & the S&P 500

    The below chart from this morning’s Wall Street Journal is perhaps a good example of our ongoing transformation from an industrial economy to an information economy. Just four stocks — namely Microsoft, Apple, Amazon, and Facebook — have accounted for 19% of the S&P 500’s total return this year. All of them are “tech.”

    And this is not new to 2019. Similar contributions were made by tech last year and in 2018. I have been used to hearing about the 4 horsemen of tech. But apparently there’s even now something called the “FAANG stocks,” which refers to Facebook, Amazon, Apple, Netflix, and Google (Alphabet).

    This shift is, of course, one of the reasons why every city is trying to establish a strong tech ecosystem. I saw that first-hand in Lisbon this past week. And frankly I think the city has many of the same characteristics that made Berlin a great place for tech. It’s affordable. It’s filled with young and smart people. And it’s a fun place to be.

    There’s a reason that Lisbon now hosts the annual Web Summit, which is generally considered to be the largest tech conference in the world. (The North American offshoot, called Collision, relocated to Toronto this year in order to be in a more global city.)

    Portugal only has a population of about 10 million people. There are some 3 million people in the metropolitan area of Lisbon. But that doesn’t really matter because most startups today are immediately targeting a global customer base.

    I learned more about Portugal and Spain’s colonial pasts on this trip and I found it fascinating. In many ways, it was the start of globalization. But that was the Age of Discovery. Those centuries are over and done with. Our century is the Information Age. The above chart is part of that story.

  • Supply is up and rents are down in Sydney

    The Sydney Morning Herald recently reported that an oversupply of apartments has started to put downward pressure on rents and upward pressure on vacancy rates in the city. Here are a few excerpts from the article:

    Sydney is in the grip of an apartment building boom, with 30,880 multi-unit dwellings built last year, a record for any Australian city. There were 16 multi-unit projects finished in the first three months of 2019, adding another 1948 units.

    These numbers are flowing through Domain.com.au, where 17,500 units were listed for rent in June 2017, and ballooned to 32,680 listings in June 2019. The result has been landlords asking for $25 a week less median rent than last year.

    Sydney-wide rental vacancy rates have almost doubled from 1.7 per cent 2017 to 3.2 per cent this year. But on the upper and lower north shore, in the hills district and Sydney CBD, apartments are sitting vacant at more than twice this rate, SQM data shows.

    The narrative here is that you can build your way to lower rents. Make supply exceed demand, and this is what will happen.

    But in this case, something else has also impacted the demand curve: China.

    Beijing has made it harder to get money out of the country in recent years and their overall economy has slowed. China’s economy is thought to be growing at its slowest rate since 1992 (which is when the country started official record keeping).

    The above article suggests that about 80% of new construction apartments in Sydney were sold to investors over the last few years. More than a few were probably Chinese. Though I have no idea if that is an accurate number.

    What is unclear, to me, is whether this doubling of rental listings over the last two years is a result of previously bought supply simply making its way through the system, or if current market conditions have encouraged more owners to put their units up for rent.

    Whatever the case may be, supply is up and apartment rents appear to be coming off slightly in Sydney.

  • Sunset in Malaga

    Here are a few photos from last night’s sunset here in Malaga. (All unedited and straight from my iPhone.) It was one of the most beautiful sunsets that I have ever seen and seemed to go on for hours. But of course, the photos don’t come close to doing it justice.

  • Out of office: Malaga

    The above photo was taken on a walk up to the Castillo de Gibralfaro in Malaga, Spain. It was built by the Moors during their occupation of the Iberian Peninsula in the Middle Ages.

    It is located on Mount Gibralfaro (~130m up) in the center of the city, overlooking the historic core, the waterfront, and its lower elevation sibling — the Alcazaba (or citadel).

    In the Middle Ages, this is what it meant for a city to be defensible. High ground. Formidable double walls. And places to shoot from.

    Thankfully, today, I think one could easily argue that “urban defensibility” tends to instead rely on things like knowledge, innovation, and diversity.

    Here are a couple of photos from inside the fortress. It is always amazing to see what labor was able to build without the technologies that we have today.

    Portions of it were built using a very elegant and elongated brick. Above is the bar area at the top. Presumably this was a later addition, though, supposedly the Moors did make and sell wine from the Andalucia region.

    If you ever find yourself in Malaga, this complex is a must visit.

  • Lisbon’s kiosks anchor public life

    One of my favorite things about Lisbon is the way in which life seems to happen publicly right on the street and in public squares. Its kiosks (or quiosque), like the one you see pictured above, play a major role in that.

    They are tiny; usually only run by one person. But they embody old world charm; usually with a dark green finish and some wrought iron flourishes.

    Supposedly these street anchors fell away during Portugal’s authoritarian period (Estado Novo), as there was concern that this sort of urban fraternizing might lead to new, potentially radical, ideas. (That’s usually a feature of cities.)

    Thankfully, Lisbon’s kiosks have returned and they’re as charming as ever. I like to think that city builders can workaround any type of climate. But the weather here certainly helps this public life. Lisbon is one of the sunniest cities in Europe.

  • My first dockless scooter ride

    I now know what all the fuss is about. Yesterday I rode a dockless (Lime) scooter for the first time. I took in lieu of an Uber in order to get to the Museum of Art, Architecture, and Technology (MAAT) on Lisbon’s waterfront.

    Here’s another photo from my ride:

    We don’t have these scooters in Toronto, but I understand they are imminent. And now that I’ve used one — and learned how shockingly fun they are — I can see why they are proliferating across so many cities.

    They’re a solution to the last mile problem, but they’re also fast enough (20 km/h) that they can be a substitute for other forms of urban mobility, as was the case for me yesterday. I can also see myself using one to get to the office when I would rather not sweat through my suit.

    Of course, there is the much talked about problem of scooters as urban litter. It’s a real thing and I am seeing that firsthand here in Lisbon. Because they are dockless, people leave them anywhere and everywhere. At the same time, part of what makes them so convenient is that, well, you can leave them anywhere and everywhere.

    I’m confident there’s a tidier solution that doesn’t involve fixed docking stations. Geofencing, perhaps? Cars are “dockless” and we’ve sort of figured that out. Many cities are already working on and experimenting with different solutions. Here’s an example from Tel Aviv. I have also noticed a natural clustering effect.

    I’m not sure how good of a business they will prove to be. The barriers to entry seem fairly low right now. You just need some Chinese scooters and an app, which is why I am noticing so many competing companies. But as the market matures, increased regulation could change this.

    We are going through a period of growing pains and it’s not particularly elegant. However, I believe we’ll get there. So I am looking forward to riding these scooters when they do finally land in Toronto.