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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  • Maple Valley? No.

    At this time of year, I am always amazed by the number of mass emails that I receive from unknown people and companies. They have my email address, clearly, and yet I only receive one email a year from them – a happy holidays email. I am not opposed to holiday cheer. I love Christmas. But if you’re looking to build any sort of meaningful rapport with an audience, my sense is that you ought to send more than one email a year.

    In other news, the Economist published an article this past week talking about how Toronto is attracting disaffected (Indian) tech workers from the US and, more particularly, Silicon Valley. It is largely a story of immigration and diversity. But at the end of it, the Economist also reports that some people are now calling Toronto, Maple Valley. Toronto immediately reacted to this moniker – negatively.

    Nobody refers to Toronto as Maple Valley. And these sorts of names are stupid. In the 1990s, the Flatiron District in Manhattan started being called Silicon Alley (at least by some). That name was also stupid. New York is New York. And Toronto is Toronto. If you’re going to assign a nickname, it should not be derivative. And in the case of Toronto, you probably also want to avoid kitschy Canadian stereotypes.

  • US cities with the highest construction costs

    BuildZoom, which is a tool to help people find local contractors, recently looked at construction costs across the US.

    Here is their 30-city average index running from 1950 to roughly today:

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    Here is a chart showing the most and least expensive cities (that is, the cities that deviate the most from their 30-city average):

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    And here is a chart that compares labor cost appreciation to material costs:

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    Labor costs account for the bulk of the geographic variation in construction costs and the most expensive cities to build in also tend to have the highest median home prices.

    The way to read the above chart is that any city with a y-axis value greater than 1 means that labor costs have appreciated faster than material costs from 2008 to 2017.

    In the case of San Francisco, labor costs have appreciated 32.8% (> 1.3) faster than material costs. 

    Part of this likely has to do with the fact that San Francisco is an expensive city in which to live. People have to be paid more if they’re going to work there.

    Full blog post from BuildZoom, here.

  • Fixing the MTA

    Fred Wilson wrote a great post on his blog today about New York City’s “transit mess.” 

    In it he talks about congestion pricing (which, as you all know, I support); the mess that is the Metropolitan Transportation Authority (MTA); and this 37-page report on how to improve the MTA.

    Here is an excerpt from his post that I liked, but that won’t be popular with everyone:

    That is an idea [congestion pricing] that has been proposed a number of times over the years, most notably by Mayor Bloomberg during his tenure. It is a good idea and long overdue. A dense urban environment should have excellent mass transit and incentives to use it and should have disincentives to drive cars. Taxing cars in Manhattan and using the revenues to maintain and improve our subways seems like an obvious thing to do.

    I would encourage you to give his post a read. The New York Times also reported on this topic (and the above recommendations) this week. They called it, 7 ways to fix the MTA (which needs a $60 billion overhaul).

    Photo by Joren on Unsplash 

  • Boring Company ran a Tesla through its test tunnel

    This week Elon Musk’s Boring Company ran a Tesla through its 1.14 mile-long test tunnel in Hawthorne, California. This was accomplished by using a set of tracking wheels that Elon said, “turns a car into a rail-guided train & back again.” Apparently it is safe up to 150 miles per hour. Here is a video from yesterday’s unveiling (click here if you can’t see it below):

    [youtube https://www.youtube.com/watch?v=WQn-D-i5lyM&w=560&h=315]

    Some, or perhaps many, are skeptical of how this could work at scale in a dense urban environment. The company is imagining a world where every house or office building has one of these lifts (shown in the video) in their garage or basement. But there’s no question it is very cool and apparently this test tunnel only cost about $10 million per mile to dig. That’s progress in and of itself.

  • Toronto condo market outlook

    BNN Bloomberg just published this article on the Toronto condo market. It is based on a roundtable discussion that was held at their Toronto office last week with Jim Ritchie of Tridel, Jared Menkes of Menkes Developments, Shamez Virani of CentreCourt, and Jane Renwick of Diamond Kilmer Developments.

    The overarching theme is that, after a couple of frenetic record setting years, the market should settle down in 2019, which is likely a good thing. Hopefully that will also temper construction cost inflation. We have been seeing double digit increases over the last few years (hence some of the cancelled projects).

    But as Jared points out, the fundamentals here are still strong and there are a number of supply constraints creating upward pressure on pricing:

    Jared Menkes, executive vice president of high-rise residential at Menkes Developments was unwavering for the future. “There’s a lot of red tape that’s slowing down bringing more product to market,” Menkes said. “I promise you, pricing is going up.”

    For the rest of the article, click here.

  • Blue lights on train platforms

    Sadly, Japan has one of the higher suicide rates in the world. According to the World Health Organization, the rate from 2000 to 2016 was about 18.5 deaths per 100,000. The only country in Asia with a higher rate is South Korea. They are at 26.9 deaths per 100,000 (an alarming figure). For comparison, Canada and the US are at 12.5 and 15.3, respectively, which also seem rather high to me.

    I was intrigued to learn today that one of the ways that Japan has been trying to combat this high figure is by installing blue LED lamps on some of its railway platforms. Blue lights have been proven to have a calming effect (compared to white light). And since jumping in front of a train is unfortunately a common suicide method, blue lights were thought to maybe be a cost effective alternative to platform screen doors.

    The first blue station lights were installed on Tokyo’s Yamanote line in 2009. And according to this 2013 study – which looked at the possible impact across 71 train stations in Japan – the introduction of blue lights actually resulted in an 84% decrease in the number of suicides. Further studies also showed that there were no corresponding increases at other non-blue light stations. 

    It is an interesting example of “nudge theory”, but does it get at the root of the problem?

    Photo by Athena Lam on Unsplash

  • Average January temperatures by global city

    In Edward Glaeser’s book, Triumph of the City, he argues that the average temperature in January is the single best variable to predict which U.S. cities have grown the most over the last century. Indeed, from July 2015 to July 2016, 10 of the 15 fastest growing large metro areas in the U.S. were in the south. Follow the sun and sprawl.

    Given this phenomenon, I thought it would be interesting to look at the world’s most influential cities (i.e. global cities) through this lens. Because let’s face it, New York and London aren’t all that warm in January. 

    Below are the top 25 global cities (taken from A.T. Kearney’s 2018 Global Cities Report), along with their average January temperature (taken from here). Note, there are two rankings. On the left is their global cities index. And on the right is their global cities outlook, which evaluates current potential. Cities that improved their economics & governance made the biggest leap on the right.

    image

    First of all, it’s interesting to see San Francisco jump so significantly in their outlook ranking. This has everything to do with tech and innovation. It’s also important to note that a handful of the above cities are located in the southern hemisphere, so “average January temperature” doesn’t mean the same thing (probably should have normalized to their winter).

    Montreal wins the award for the coldest city in this ranking. And there’s really only one city, Singapore, with a tropical climate. Though there are others, such as Hong Kong and Sydney, that would fall under subtropical. All of this isn’t enough for us to start inferring anything, but perhaps colder and more temperate climates aren’t such a bad thing for economic growth.

  • The new studio geography

    If any of you have gone to architecture school (or know someone who went to architecture school), you’ll know that everything revolves around something called studio. Studio – that’s really all you need to say – is worth many multiples of your other classes and consumes an even greater multiple of your time. What time will you be in studio? How’s studio going? I was in studio really late last night. This is how the conversations go.

    So I was intrigued by Seth Godin’s post this morning comparing “working in a studio” to working in a factory. The latter, he says, relies on compliance: “More compliance leads to more profits. Do what you’re told, faster and cheaper, repeat.” And this was very much the narrative of the 20th century and was the model that empowered small-town America to thrive (see yesterday’s post).

    However, the studio is different. Here is how Godin defines it:

    The studio, on the other hand, is about initiative. Creativity, sure, but mostly the initiative to make a new thing, a better thing, a process that leads to better.

    It’s peer to peer. The hierarchy is mostly gone, because the tasks can be outsourced. So all that’s left is leadership.

    Initiative plus responsibility. Authority is far less important, as are the traditional measures of productivity.

    It is not difficult to tell the two apart, which is how Godin ends his post. But it is worth noting that the studio model also thrives in a different kind of geography, compared to the factory model. So not only is the studio itself a different place, it also wants to situate itself in a different kind of place. So in a way, what we are seeing today is the new studio geography.

  • Cities are labor markets

    Eduardo Porter recently published this piece in the New York Times on the “relentless economic decline” of small-town rural America. We often talk about rising income inequality, but the greater concern is the alarming rate of joblessness in many of these communities. Earning less than others is not as bad as earning nothing.

    I think the below map from the article, depicting population density by county, starts to show how uneven the economic landscape is across the US. Porter puts it this way: “This is the inescapable reality of agglomeration, one of the most powerful forces shaping the American economy over the last three decades.”

    image

    But, of course, we don’t really have a solution to this problem. Some are suggesting employment subsidies, such as the earned-income tax credit. While others are suggesting that we need to make it easier to build in the large blue spikes shown above. That way we’ll be able to more affordably accommodate the people who will ultimately need to move from rural to urban.

    While this latter suggestion may seem grim for small-town America, it is perhaps a reminder of what cities really are at their core: Cities are labor markets. They are the places where people come to get a job and make money.

  • One Delisle unanimously supported at Design Review Panel

    One Delisle was at the City of Toronto’s Design Review Panel today where it received unanimous support. For those of you who may not be familiar with the process, at the end of every DRP session the panel members – who are all independent design professionals – vote on the project. They can support it, support it with conditions, or they can not support it and send it back for a redesign. One Delisle received 100% support.

    There were a number of positive comments around the need for more projects like this, and for better design in general, here in Toronto. That was really nice to hear. I also liked the comment that One Delisle feels like a tall building that one might find in London. And since every tall building in London has an endearing nickname – Gherkin, Walkie-Talkie, Cheese Grater, and so on – this too deserves one. 

    So let’s find a name. I have one in mind, but I’d love to hear from you in the comment section below.