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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  • Toronto re-embraces small-scale retail

    November 15, 2025 · View original

    Good news: If you would like to open a small-scale retail business in Toronto — and you have a property that is residentially zoned on a major street (in one of the approved areas), or you have a corner property on a designated “community street,” or you have a property that abuts a non-residential use such as a park or public school — you may now be allowed to do it, with some restrictions. (Consult your local planner for exact details.)

    This, as we talked about recently, is meaningful progress for Toronto. But as is always the case, it was not easy. Toward the end, local community groups even started using AI slop in an attempt to terrify the public into thinking that this would be a harbinger of littering hoodlums loitering in all of our neighborhoods.

    Thankfully, this city has people like Dan Seljak, Blair Scorgie, and many others — including, of course, the EHON team at the City — who have been instrumental in getting something passed, even if it had to change a little along the way. City building ain’t easy. They should all be proud of what they’ve accomplished. I look forward to seeing what kind of local entrepreneurship this unlocks. Go Toronto.

    Cover photo by Joe Yu on Unsplash

  • A simple framework for thinking about value engineering

    November 14, 2025 · View original

    We all know what value engineering is when it comes to buildings. Generally speaking, it is the process of trying to identify high-cost items with relatively low perceived value. Once you identify these items, you then remove them (if you can), replace them with alternatives, or find other creative solutions. All projects have to do this at one point or another because, well, money doesn’t grow on trees.

    One way to think about this is in terms of the following four-quadrant chart:

    Low-value and low-cost items aren’t expensive, so you will probably just leave them alone. But if you can move them up to the next quadrant, that’s even better.

    High-value and low-cost items are the ideal place to be. One example might be a low-cost material that gets applied in a creative way so as to create high perceived value. This is where design really becomes alpha.

    Low-value and high-cost items are the fertile ground for value engineering exercises. If the perceived value is low, why spend the money on it? Surely there must be other options.

    High-value and high-cost items, on the other hand, require the most thought and debate. How high value is it? Do we really need or want to spend the money on it? One example of this would be the architectural facade lighting at One Delisle. Sadly, it was not free.

    Years ago, the team presented it as a possible value-engineering option. But ultimately, we viewed it as being fundamental to the overall design. Its perceived value was off the charts. I mean, why invest so much in the architecture only to cut the very thing that helps prominently display it? So a decision was made to keep it and, boy, am I glad we did.

    There’s nothing else going up in Toronto like it.

    Cover photo by EJ Yao on Unsplash

  • Toronto isn’t as car-oriented as you might think

    November 13, 2025 · View original

    One of the things that I’ll often hear people say about Toronto is that we’re a car-oriented city with inadequate transit, and that’s why we simply can’t implement things like congestion pricing. Usually it’s accompanied by statements like this: “Sure, I can see how it might work in London or New York, but they have proper transit systems, and we don’t.”

    But is this really fair to say?

    Let’s look at some of the data from the 2022 Transportation Tomorrow Survey.

    For all trips starting and ending in the City of Toronto, people driving themselves around is the dominant mode share at 45.3%. But the transit mode share is not nothing at nearly a quarter of all trips. And if you add up taking transit, walking, cycling (and other forms of micromobility), and taxiing, you get to 42% of all trips within the city. That’s a meaningful number.

    For home-based work trips within the City of Toronto, the split between driving and taking transit becomes dangerously close. (A home-based work trip is a trip within the city that either starts or ends at home and is done for the purpose of work.) Driving sits at 39.4% and transit sits at 37.1%. Add in walking (10.2%), cycling/micromobility (5.8%), and taxiing/ridesharing (1.4%), and non-car forms of mobility dominate when it comes to getting to and from work.

    Looking at all trips to only downtown Toronto, transit once again dominates at 40.4%. Add in the other non-car forms of mobility and we’re up to nearly 75% of all trips.

    The numbers become even more pronounced if we look at only home-based work trips to downtown. In this case, transit ridership increases to 48.7%. Add in the other non-car forms of mobility and we’re now at 80%!

    These are fascinating figures because, let’s say you were considering a congestion charge for motorists driving into downtown Toronto, and that the proceeds of this charge would be used to make impactful investments in transit and other mobility infrastructure. Based on this data, you’d actually be benefiting the greatest number of Torontonians.

    These numbers also help to debunk the objection that people simply have no other option. If you’re coming into downtown Toronto, you have options. The transit exists, and the majority of Torontonians use it.

    I guess Toronto isn’t so car-oriented after all. (The rest of the region is a different story.)

    Charts via the City of Toronto (TTS 2022); cover photo by Aditya Chinchure on Unsplash

  • The causal effects of rising housing costs on fertility

    November 12, 2025 · View original

    Benjamin Couillard is a PhD candidate at the University of Toronto whose research looks at things like residential choice and housing supply. And in this recently published paper, he studies the causal effects of rising housing costs on fertility. Here’s what he found when examining US Census Bureau data:

    > …rising [housing] costs since 1990 are responsible for 11% fewer children, 51% of the total fertility rate decline between the 2000s and 2010s, and 7 percentage points fewer young families in the 2010s. Policy counterfactuals indicate that a supply shift for large units generates 2.3 times more births than an equal-cost shift for small units. This analysis concludes that the supply of housing suitable for families can meaningfully contribute to demographic sustainability.

    Intuitively, it makes sense that rational adults might consider where they would put a child if they had one, or had one more, and consider the cost of this incremental space. Housing is expensive in major urban centers. Perhaps it’s no surprise that Canada, which is known for its broadly unaffordable housing, has fallen into the “ultra-low fertility” category.

    But I think this fertility-housing relationship is an important one to call out when considering appropriate public policies. Housing is often viewed through the lens of what bad things will happen if we build it. That’s why we do shadow studies, force stepbacks, charge development charges (impact fees), and the list goes on.

    What is harder to grasp is what happens when we don’t build new housing. Most — or at least many — seem to agree that not building enough housing hurts overall affordability. But what this study also demonstrates is that not building enough family-sized housing is bad for making babies!

    This has all sorts of socio-economic repercussions, one of which is that a country now has to rely more heavily on immigration in order to offset a shrinking population base. It becomes a larger economic problem. When framed this way, it makes me wonder: why do we tax new family-sized homes the way we do?

    An alternative approach to encourage more infill family housing might be to eliminate development charges, building permit fees, parkland fees, and as many other government fees as possible on all three-bedroom or larger homes. And the reason you would do this is because the economic and demographic cost of not building is even greater.

    Based on the work of Couillard, we know at least one of the outcomes: more babies.

    Cover photo by Lotus Design N Print on Unsplash

  • Does globalization lead to homogenous interior spaces worldwide?

    November 11, 2025 · View original

    Globalization typically reduces local differences. Shake Shack in Toronto is a lot like the Shake Shack in Dubai. But does this also apply to the inside of our homes?

    This is a question that was recently asked by researchers at the MIT Senseable City Lab. And to answer it, they used AI to analyze over 400,000 interior images across 80 global cities. The images were taken from Airbnb, but they did also do a “robustness check” and pull images from Craigslist, Zillow, Zigbang, and Ohou.

    What they discovered was that geography still matters. Local customs persist, and when two cities are close to each other, they tend to share visual similarities — both in terms of the objects that show up and how they look. So much so that their model was able to predict a city with an accuracy of about 45% just by looking at interior photos.

    This is somewhat surprising to me as I thought that Airbnb listings might have skewed toward homogeneity. There can also be an Airbnb aesthetic. But local tastes and traditions still exist. For example, the study found that Turkey seems to place a high level of importance on curtains. Big drapery people over there, apparently.

    At the same time, globalization is doing things. One of their findings was that cities with high flight volumes tend to exhibit more visual similarities. This says something about the value of physical connectivity. We’re, of course, all connected digitally, but apparently that’s not the same as getting on a plane and physically being somewhere.

    “The same, but different” feels like an accurate description. To download a copy of the study, click here.

    Cover photo from the MIT Senseable City Lab

  • How long is too long for a mortgage?

    November 10, 2025 · View original

    The US just announced that they are working on a plan to introduce 50-year mortgages. I don’t know what this plan entails, but my first reaction to the headline was: “Yeah, this is a bad idea.” But then I thought to myself, why is a 50-year amortization period too long? And is there any magic to 25- and 30-year mortgages?

    At the most basic level, you could think of it this way: the average life expectancy of both sexes in America is currently 78.4 years. That means the average American would need to buy a home — with a 50-year mortgage — at 28.4 years old in order to fully pay it off by the time they die. At that point, why not rent?

    A more rigorous analysis of amortization periods would likely involve a myriad of trade-offs related to housing affordability, homeownership rates, asset-price stability, household debt, overall financial risk, and other factors. But the primary feature of a long-ass mortgage is that it’s alleged to make homeownership more attainable.

    The obvious benefit of a 50-year mortgage is that it lowers a borrower’s monthly payment. For example, an $800,000 mortgage at 6% would create the following payments:

    – 25-year amortization: $5,154 per month – 30-year amortization: $4,796 per month – 50-year amortization: $4,211 per month

    But it’s important to keep in mind that this is a synthetic affordability solution. It does not address fundamental constraints such as land use, zoning, construction costs, and the overall supply of new housing. Here’s an excerpt from a speech that Carolyn Rogers, Senior Deputy Governor of the Bank of Canada, delivered last year:

    > “…we need to resist the temptation to try to solve the housing affordability challenge by tinkering too much with the mortgage market… leaning too much on measures that reduce the short-term cost of financing could have long-term impacts on the financial health of households, the mortgage market and the economy.”

    The corollary to these lower monthly payments is that if you can afford a monthly payment of $5,154, you now have the option of taking out a bigger mortgage with a longer amortization period. With a 50-year amortization, that same monthly payment could support a $979,173 mortgage.

    But what increased leverage does is drive up home prices even further, in the same way that lowering interest rates creates upward pressure. Imagine that mortgage rates drop from 6% to 3%. This same $5,154 monthly payment would now carry a $1.6 million mortgage with a 50-year amortization period.

    I’m not an economist and, from what I can tell, there’s no perfect amortization period. But there does appear to be a Goldilocks zone that balances a number of the trade-offs, and it is somewhere between 20-30 years. In fact, as recently as 2008, Canada offered government-backed 40-year mortgages. But then a consensus emerged that they were “really not in the best interest of Canadians.”

    I know that lots of people would love to own a $2 million home. But economic history has shown us that 50-year mortgages are likely to raise home prices for everyone, slow equity build-up for owners, and increase overall financial risk in the system. As Howard Marks once wrote in one of his memos, “There’s no free lunch in economics.”

    Cover photo by Kimson Doan on Unsplash

  • The architectural icons born from Toronto’s last real estate cycle

    November 9, 2025 · View original

    CoStar recently published an article titled “Architectural stars appear on the skyline of Canada’s largest city — Toronto reaches a new level of global reach and ambition.”

    What the article is talking about is a slew of iconic, under-construction projects designed by some of the world’s most celebrated living architects. Namely, Forma by Frank Gehry (Los Angeles), One Delisle by Jeanne Gang (Chicago), KING Toronto by Bjarke Ingels (Copenhagen), as well as a handful of other noteworthy projects by some of the best local firms in Toronto.

    It is no doubt an exciting moment. These are projects that, I think, the world will come to associate with our great city. They will strengthen the global brand of Toronto.

    But let me also state the obvious: These projects are the result of a particular moment in time and a particular point in the last real estate cycle. They wouldn’t exist today, irrespective of our level of ambition.

    This is not to say that this calibre of project won’t exist again in the future — it will. But for right now, these are special and differentiated architectural treasures that truly stand alone, showing us what is possible when we bet on the unknowable future.

  • The great paradox of real estate

    November 8, 2025 · View original

    > [Tweet: The great paradox of real estate.

    When it’s hard to find great deals, it’s easy to find money.

    When it’s hard to find money, it’s easy to find great deals.](https://x.com/seandsweeney/status/1986260956775665693?s=20)

    This tweet by Sean Sweeney is, of course, 100% true. It is also true of markets and investing in general. When everyone feels confident, money becomes available, and then returns fall. There’s too much competition. But when everyone is scared and liquidity dries up, bargains emerge. Now there’s very little competition.

    Warren Buffett has made an entire career out of playing this paradox. It’s his well-known “be greedy when others are fearful” mantra. But in order to do this, you need to be patient, you need to have the resources, and you need to have the right emotional temperament when things are in meltdown.

    I am seeing this first-hand in Toronto real estate. To give just one example, development land is right now worth, oh I don’t know, roughly half of what it was before (a broad generalization).

    There are very good reasons for this. The value of land depends on what you can do with it, and if you can’t do anything with it, then it’s not worth very much. But as soon as you can once again do something with it, and clarity returns to the market, the bargains disappear.

    So to find the “great deals” you have to be willing to wade into areas where most of the market is unwilling to go in the current moment. Put differently, there’s money to be made when you’re right about something that most people think is wrong, or when you’re able to do something that most people can’t do for whatever reason.

    All of this is easier said than done, but I think about Sean’s tweet a lot these days. It’s easy to find reasons to say no right now. But here’s the approach I’m trying my best to take: it’s a great time to be in real estate. In fact, it’s a generational opportunity. And so it’s my job to find the great deals.

    Cover photo by Sean Pollock on Unsplash

  • The problem with unlucky floors

    November 7, 2025 · View original

    In Chinese culture, certain numbers — like 4 — are generally considered unlucky because of how they sound. I don’t speak Mandarin or Cantonese, but as I understand it, 4 sounds similar to “death.” And this is even more the case in Cantonese.

    Four sounds exactly like death, fourteen sounds like “definitely die,” and forty-four is the equivalent of “die, certainly die.” (Please correct me if I’m wrong.) It is for this reason that in certain real estate markets, and in particular Cantonese-speaking markets like Hong Kong, 4-related numbers are often avoided whenever possible.

    This can also be the case in other markets. Before we launched sales for One Delisle, the team made the decision to be mindful of this superstition and skip floors 4, 14, and 44. The result is that the homes on floor 4 became suite 501, 502, 503, and so on, and the building itself went from having 44 floors to 47 floors.

    We did this so that nobody would be buying on the “die, certainly die” floor, and so from a marketing perspective, I think these strategies can make a lot of sense.

    But what I would also say is that, from a development perspective, you should avoid this whenever possible. It adds coordination complexity. What we saw happening early on was that someone would say suite 501, and then you’d have someone else question whether they were talking about the suite on architectural/construction/legal level 5 or the suite on marketing level 5.

    To solve this, we had to be extremely draconian about how levels and suite numbers were allowed to be communicated. Firstly, there’s no such thing as a “legal” suite number. Suite numbers are purely a marketing thing — a number that goes on a front door. The legal description of a condominium suite involves a legal level and a legal unit.

    So what we did was call a meeting and tell everyone the following: Any and all communication regarding suites needs to include the legal level, legal unit, and suite number, and failure to use all three numbers means you will be liable for any mistakes. We then updated the drawings to reflect this nomenclature.

    Building buildings requires some assholes.

    My first boss used to tell me that development is the closest thing to being in the military. Never having been in the military, I can’t say whether this is accurate or not, but it should give you an indication of what it can feel like to build. Sometimes skipping floors is just what you need to do. But if you can avoid it, it’s one less thing you need to be an ass about.

    Cover photo by Christian Lue on Unsplash

  • Speculation is good

    November 6, 2025 · View original

    The word “speculation” usually has negative connotations, especially in the world of finance. That’s why you’ll hear people deride “condo speculators” and talk about things like crypto as being rat poison. Buying something with the sole hope that someone will pay more for it later is viewed as a negative act.

    But is this a fair characterization?

    Speculation is fundamental to how markets work. It happens when people bet on some unknowable future rather than on present fundamentals. This is an important feature because it’s how new technologies and new business models get funded. Without it, we’d only ever fund what is knowable and what already exists.

    This doesn’t mean that speculation won’t lead to failures — by definition it has to. It’s uncharted territory. But consider what speculation has advanced along the way: railway networks, utility infrastructure, the internet, crypto, and AI, among many other things. And in the case of condo speculators, the result was that more, rather than less, housing got built.

    That’s a good thing.

    So I think there’s an argument to be made that we actually need more speculation in Canada. We need more risk taking and we need people betting on the future, even in the face of uncertainty. Because when you do that, eventually you end up creating it.