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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  • Red streetcar tracks

    A few months ago when I wrote about “Toronto’s great streets” I mentioned that Queens Quay West – while magnificent – has had its share of issues. Cyclists and pedestrians often find themselves battling for space. And drivers are consistently driving in the wrong places.

    Part of the problem, I think, is that the turning radii (among other things) are a bit atypical and unusual compared to the rest of the city. And so if you’re at all in mental autopilot, it can be fairly easy to make a wrong turn. You really have to be paying attention.

    Below is a screenshot from Google Street View showing the foot of Lower Spadina, looking east on Queens Quay West. If you’re making a left turn from the former onto the latter, you need to end up on the left (north) of the streetcar tracks (even though the tracks themselves might be directing you elsewhere).

    There’s lots of signage telling you not to drive onto the tracks, but that hasn’t really been working. So the tracks were recently painted in bright red. You can see what that looks like here. Some people are still getting mixed up, but it’s certainly more noticeable.

    What I am wondering today is whether all of this signage and paint should be considered a symptom of poor design. In other words: Should good design require few instructions? Or, is this simply a normal part of iterative city building?

    What do you think?

  • Limits of housing affordability

    The San Francisco Chronicle recently published an article called, “SF residential projects languish as rising costs force developers to cash out.” It talks about the impact that rising costs (both construction and other) are having on new housing supply. Some developers aren’t building even though may have entitled sites. And that’s because the math doesn’t work, even though we’re in a market with a severe housing shortage.

    Here is an excerpt from the article that talks about the kind of pricing that is needed in order to make a project work:

    Chris Foley, a real estate investor and partner in brokerage firm Polaris Pacific, said that in the current construction environment a condominium developer needs to sell units for at least $1,400 a square foot for a wood-frame building and $1,800 a square for a taller, steel-frame midrise or high-rise. Even in a city where more than 80 percent of the population is priced out of the market, those numbers are a stretch, Foley said.

    San Francisco also has inclusionary zoning, which requires a certain percentage of units in any new development to be priced below market. According to the article, it is 18% for new rental projects and 20% for new condo projects. That’s a cost that needs to be absorbed by the remaining market rate units – so price accordingly. 

    The MIRA tower designed by Studio Gang is currently under construction and has 156 affordable units and 393 market rate units. The market rate pricing looks something like this:

    That’s the case with three buildings rising near the new Transbay Transit Center: Mira, the Avery at 400 Folsom St., and One Steuart Lane, which overlooks the Embarcadero at the foot of Howard Street. Unless there is a remarkable drop in the market, units in all three of those buildings will probably have an average sales price of more than $2,000 a square foot and penthouses could fetch $3,000 or even $4,000 a square foot. A 3,326-square-foot penthouse at 181 Fremont St., which opened last spring, recently sold for $15 million, or $4,500 a square foot.

    Projects being squeezed by rising costs is something that we are also seeing here in Toronto. And I don’t believe that the general public fully appreciates that there are limits to the costs that can be shouldered by new development. And the reason for that is because there are limits to what people can afford to pay for new housing.

    Photo by Jamie Street on Unsplash

  • Friluftsliv (or open air living)

    Johnathon Little (husband) and Zoe Little (wife) recently launched a new housing concept out of the UK called Koto, which is supposedly Finnish for “cozy at home.” 

    (Before Koto, Johnathon worked for Snohetta in Oslo.)

    The goal of the company is to create beautiful, small, and prefabricated houses and cabins that allow people to connect with nature. 

    It is inspired by the Nordic concept Friluftsliv. The literal translation is “open air living” but, more specifically, it is about the benefits of nature on our mental and personal wellbeing.

    Their small cabin has a footprint of 15 square meters and their large cabin has a footprint of 40 square meters. Base prices run from about £33,500 to £63,500. A bathroom is optional.

    The most obvious use case for me is that of a bunkie. For more on Koto, check out their website and Instagram.

    Photos: Koto

  • A more distributed startup geography

    The Economist recently argued that Silicon Valley’s innovation hegemony is waning and that it is a product of two factors: there appears to be more innovation happening elsewhere (good news), but that innovation in general also seems to be harder to achieve (bad news). Here is an excerpt from the article:

    Other cities are rising in relative importance as a result. The Kauffman Foundation, a non-profit group that tracks entrepreneurship, now ranks the Miami-Fort Lauderdale area first for startup activity in America, based on the density of startups and new entrepreneurs. Mr Thiel is moving to Los Angeles, which has a vibrant tech scene. Phoenix and Pittsburgh have become hubs for autonomous vehicles; New York for media startups; London for fintech; Shenzhen for hardware. None of these places can match the Valley on its own; between them, they point to a world in which innovation is more distributed.

    Part of the problem, of course, is rising costs in the Bay Area. Everything from the cost of living to the cost of operating a business. The article cites a recent survey where nearly half of all respondents said they are planning to leave the Bay Area in the next few years. This is up from 34% only two years ago.

    I don’t doubt that rising costs are causing some people to look to other cities, as well as other countries in the case of draconian visa policies. But I am suspect of the claim that we’ve heat peak “innovation” – however you want to define that.

  • Photoblog: Aga Khan Museum

    Today we visited the Aga Khan Museum here in Toronto, which is a museum dedicated to the arts of Islamic civilizations. I had been outside the building before but this was my first time inside and my first time seeing some of the collections.

    Here is the main entrance:

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    Here is a photo looking the opposite way over one of the reflection ponds:

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    The museum was designed by Japanese architect Fumihiko Maki and was completed in 2014. 

    The site area is approximately 70,000 square meters and the building itself is approximately 11,600 square meters. Maki won the Pritzker Prize in 1993.

    Here is the building’s interior courtyard, which was one of my favorite parts:

    image

    The glass is patterned with the Islamic eight pointed star. But since the symbol is typically represented by two overlapping squares, the patterning was placed on two different sides of the double pane glass. Or at least that’s my guess as to why they did it that way.

    Lastly, here is the Bellerive Room:

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    It was designed to be a contemplative room that could, on occasion, also host intimate events and performances. Note the shadows being cast by the screens in front of the windows.

    If you haven’t yet been to the Aga Khan Museum it is worth a visit, even if you just walk the formal gardens surrounding it.

  • Is Tesla the new iPhone?

    image

    Benedict Evans just published a great post on his blog about “Tesla, software and disruption.” I recommend a full read. In it, he tries to answer whether Tesla is really “the new iPhone” and if it will be as disruptive to the car landscape as some/many people think.

    In his line of thinking, electric (as opposed to an ICE vehicle) feels a lot more like a sustaining innovation, rather than a disruptive innovation. In other words, it something that incumbents will be able to incorporate. So it will not change the “basis of competition.”

    The more critical aspect is instead autonomy. Here are two snippets from the piece:

    All of this takes us to autonomy. Electric is compelling but will probably be a commodity, whereas Tesla’s improvements on top of electric may not be commodities but are not necessarily decisive. Autonomy changes the world in profound ways (I wrote about this here), and it’s a fundamentally new technology that doesn’t look at all like a commodity. And Tesla is doing this, too. Sort of.

    In this competition, Tesla’s thesis is that the data it can collect from its cars will give it a crucial advantage. The only reason that anyone is interested in autonomy today is that the emergence of machine learning (ML) in the last 5 years probably gives us a way to make it work. Machine learning, in turn, is about extracting patterns from large amounts of data, and then matching things against those patterns. So how much data do you have?

    But even if we are to all agree that autonomy is the “disruptive innovation”, it is not yet clear who will get there first. Maybe it is Tesla. Maybe it is Waymo. Regardless, many or most people seem to agree that it will arrive in 202x.

    Image: Tesla

  • New Toronto architecture bike tour

    I have a friend visiting from Detroit this weekend. We went to architecture school together at Penn. But unlike me, he decided to become a full fledged architect.

    Not surprisingly, he wants to see some new Toronto architecture while he’s here. I say new because he has seen the classics. So I mapped out a short bike route this morning. It’s more or less a downtown loop that starts in the St. Lawrence.

    First we head west to the Queen Richmond Centre West by Allied Properties REIT (developer) and Sweeny&Co (architect). After that I’d like to show him the main drag of King West and point out two buildings by Saucier + Perrotte Architects and CORE Architects. I don’t think Unzipped Toronto is open yet.

    Next it is north to One Spadina Crescent – home of the Daniels Faculty of Architecture, Landscape, and Design. This is one of if not my favorite new building in the city right now.

    After that I figure we’ll cruise east along the Bloor bike lanes and look up at 1 Bloor East. Then it is back south to check out the River City collection by Urban Capital (developer) and Saucier + Perrotte Architects (they are getting good face time on this tour).

    Then we’ll do what every good new Toronto architecture bike tour should do and end with a drink on a rooftop patio somewhere. Maybe we’ll check out the Broadview Hotel. I like the neon in the lobby bar.

    If I missed anything critical, let me know.

    Photo by Tiffany Nutt on Unsplash

  • How Singapore fixed its housing problem

    There are a number of affordable housing plans being thrown around in Toronto right now given that we have a municipal election coming up this fall. 

    From what I have read, the plans are largely centered around surplus and/or available public land and possibly some subsidies. 

    These subsidies are very important because the money has to come from somewhere. This is often overlooked.

    In light of these debates, I thought I would share a short Bloomberg video that my friend Evgeny shared with me this morning all the way from Tokyo.

    The video is about how Singapore fixed its housing problem. If you can’t see it embedded below, click here.

    [youtube https://www.youtube.com/watch?v=2cjPgNBNeLU?rel=0&w=560&h=315]

    It strikes me as being very Singaporean.

  • Public access at Martin’s Beach

    I just learned about the ongoing legal dispute on Martin’s Beach (south of San Francisco) through this New York Times article. 

    To briefly sum it up, tech billionaire Vinod Khosla bought a 53-acre beachside village known as Martin’s Beach in 2008. On the land is about 47 beach houses, a shop that sold ice cream at one point in its life, and a road that provides the only access to the beach. The road is private, but over the years and before Khosla purchased the property, it provided both parking for and access to the beach. 

    After acquiring the property, the county told Khosla that he had 2 options with respect to the road:

    (1) Keep it open (there’s a gate that controls access). And charge no more than $2 a car for parking, which was the rate charged in 1972.

    (2) Apply for a Coastal Development Permit to change how the access works.

    Khosla opted to do neither and in turn the residents of Martin’s Beach sued him. He’s been in a legal battle ever since. But according to the New York Times, he has about $3 billion sitting in his war chest. For him it is both a matter of principle and a matter of protecting property rights.

    Not surprisingly, tech billionaire fighting to keep people off a public beach makes for a sensational headline in the media. The NY Times argued that every generation has some sort of rich Californian fighting to privatize the waterfront. Khosla is this generation’s “beach villain”.

    But beneath the headlines lies a fascinating legal debate that you can read more about through a blog post that Khosla published earlier this year. For you property lawyers out there, I would be curious to hear your thoughts in the comment section below.

  • Downward pressure on parking supply

    There’s a significant amount of downward pressure on parking supply in most major cities. Part of this has to do with the push toward more sustainable forms of transport, which is, of course, a good thing. But it also has to do with rising construction costs, the fear of obsolescence in the wake of autonomous vehicles, and probably many other factors.

    Developers, ourselves included, have responded by being cautious about the amount of parking being provided and by considering alternative future uses for the parking that is being built. I think it is also obvious that we will continue to see more, rather than less, parking stackers and other more efficient parking solutions.

    So far the cost of parking in dense urban centers has continued to rise. A new parking spot in the core of Toronto priced at $100,000 would not surprise me. And Hong Kong recently set a record for what is allegedly the most expensive parking spot in the world: USD 765,000 or CAD 1 million.

    But what is going to happen going forward?

    Researchers at the Singapore – MIT Alliance for Research and Technology and MIT Senseable City Lab, along with Allianz, have recently tried to quantify what the impact of autonomous vehicles will mean on required parking, and on traffic, in Singapore. The study is called Unparking.

    Today, they estimate the total number of parking spots in Singapore to be around 1,370,000. This is based on minimum parking requirements from the Housing Development Board and on the idea that home-work commuting consumes two parking spots: one at home and one at the office.

    They model four different scenarios, but the last one is based on fully autonomous vehicles and on shared parking spaces. Holding current mobility demands and traffic volumes constant, the demand for parking in this scenario drops by 70%.

    It is possible to reduce the number of parking spaces even further to 85%, but this has a negative impact on traffic congestion in their model. Fewer parking spaces means the autonomous vehicles have to drive around more picking people up. 

    I also don’t know if there was any consideration given to induced demand as a result of the more affordable autonomous vehicles. Demand for transportation services is generally thought to be fairly elastic.

    Whatever the case may be, numbers are made to be questioned. And Singapore is a unique city-state. But ¼ the amount of parking does not seem that far fetched to me.

    Photo by Tobias Jussen on Unsplash