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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  • The neighborhood of the future

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    Daniel Doctoroff (chairman and CEO of Sidewalk Labs and former deputy mayor of New York City) and Eric Schmidt (executive chairman of Alphabet and former CEO of Google) recently contributed a piece to the Globe and Mail about “why Toronto is the ideal place to build a neighborhood of the future.” 

    It’s about the partnership they working on with Waterfront Toronto. I wrote about that announcement, here.

    Here is an excerpt from the Globe article:

    “The eastern waterfront will be a place where residents, companies, startups and local organizations can advance new ideas for improving city life. It’s where a self-driving test shuttle will take its first steps toward becoming a next-generation transit system that’s cheaper, safer and more convenient than private car-ownership. It’s where new insights into advanced construction methods will start to reveal a path toward more affordable housing development. It’s where explorations into renewable energy and sustainable building designs will show promise toward becoming a climate-positive blueprint for cities around the world.”

    These are some of the first details that I have heard about their vision for Toronto’s eastern waterfront. 

    Some of you are probably worried – after reading the above excerpt – that by focusing on self-driving vehicles, we are setting ourselves up to repeat our previous mistakes. But if self-driving vehicles are destined to become a reality (and it certainly feels that way), it is critical that we understand their impact and how they might best dovetail with the public transit systems we already have in place.

    I am thrilled that all of this will be happening right here on our doorstep.

    Photo by Brxxto on Unsplash

  • 10x the scale

    Below is a chart from Benedict Evans comparing annual revenue from the Wintel era (Microsoft + Intel) to the current GAFA era (Google, Apple, Facebook, and Amazon). 

    His argument is that, today, “the scale of tech winners” is about 10x what it was during the previous cycle.

    And here is a chart, from that same post, showing how the internet ate print ads when it comes to global revenue:

    A lot of this has to do with the unprecedented growth of smartphones and the sheer number of people who came and are coming online. Mobile is 10x the PC market.

    But the other interesting narrative from the post is the argument that these companies (GAFA) have learned from previous generations just how aggressive you need to be to survive.

    The shift to mobile posed a structural threat to Facebook. At the time of its IPO, there were serious doubts as to whether the company would be able to pull off this transition.

    Which is why the founder went out and spent 10% of the company to acquire companies that would help with this transition and ensure its survival. That seems to have worked.

    In the words of Andrew Grove: “Only the paranoid survive.“ And in today’s tech world, the rewards for surviving are that much bigger.

  • Supply-side toolkit for greater housing affordability

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    McKinsey Global Institute just published a “supply-side toolkit” for cities struggling with housing affordability. This seems to be every successful city.

    The article includes a long list of potential tools. Some of them you may agree with. And others you may disagree with. But I am sure that many of them will be familiar to you. One of the tools in the toolkit is accessory dwelling units.

    Of course, the overarching theme is that housing supply has not and is not keeping pace with housing demand:

    California, for instance, added 544,000 households but only 467,000 net housing units from 2009 to 2014. Its cumulative housing shortfall has expanded to two million units.

    Another one of the tools in the toolkit is “overcoming NIMBYism.” Here is an excerpt:

    People who come to a city to work need to be able to find an affordable place to live there. But the voices of existing homeowners who want to preserve the status quo often drown out those of newcomers, young adults, low-income service workers, and renters who need more housing. After a 2009 audit found that neighborhood councils were not representative of the city’s broader population, Seattle replaced these bodies with a central Community Involvement Commission that includes mayoral and council appointees chosen to represent a broader set of stakeholders.

    I am intrigued by Seattle’s move to create a central body and a new approach to public engagement – one that moves away from local district-councils. However, it appears that this Community Involvement Commission is still very much in its infancy.

    If any of you are familiar with the Seattle market, I would be curious to hear your thoughts on it in the comment section below. I am, however, going to spend some time reading up on it.

    For the full toolkit, click here.

    Photo by Sarah Brink on Unsplash

  • Photoblog: 15 Union Square West

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    I took the above photo this afternoon. The building on the left is 15 Union Square West in New York City. 

    It’s a re-cladding of a late 19th century building that was originally constructed for Tiffany & Company. The building’s original cast-iron arches were preserved and set behind new black framed, double insulated, laminated glass panels. 

    The arches aren’t that noticeable during the day, but at night they can really stand out. Click here for a few other photos and to see what that looks like.

    Front Inc. designed the framing systems. If you aren’t familiar with Front, you should check them out. They are a leading design and facade consultancy.

  • Secrets of the German economy

    I just got off a flight where I spent an hour listening to this podcast: What Are the Secrets of the German Economy — and Should We Steal Them?

    One of the key themes is that Germany has a “stakeholder economy”, rather than a “shareholder economy”, which is one way to describe the Anglo-Saxon model.

    There’s also a lot of discussion around cities and spatial economics. 

    For instance, there’s an argument that WW2 forced a decentralization of the German economy. Germany is one of the rare examples where a country’s busiest airport (Frankfurt) is not located in the country’s biggest city (Berlin).

    Thanks Daniel for passing this podcast along. I enjoyed it.

  • Adelaide cycle tracks

    Earlier this week I was on Adelaide Street (Toronto) for a morning meeting. This is further north than my typical routine.

    For those of you not familiar with Toronto, Adelaide is a one-way street with separated bikes lanes. These “cycle tracks” were installed as part of a pilot project that launched back in summer 2014. As I’m sure you can imagine, they were highly controversial at the time. Many heated debates.

    But if you stand on Adelaide Street during the morning rush, as I did earlier this week, I think you would be amazed to see just how widely used these lanes actually are. Here’s a video of Adelaide (just east of Spadina) in action. It is by Gil Meslin and was filmed sometime between 840 and 855am on a weekday.

    However, I will say that I was far more impressed by the volume of bikes I saw in person. I wish I took a picture. They easily outnumbered the cars when I was there, which speaks to the latent demand for this sort of infrastructure. I can’t imagine a faster way to get across downtown in the morning.

    So if you haven’t already, check out Adelaide (or Richmond Street, which is also part of the cycle tracks program).

  • Attention = money; why the attention economy is broken

    “…the path to profit is to manufacture attention more cheaply than what you get paid for it.” –Ev Williams

    A big part of our economy is centered around attention. Some would argue we are living in a de facto attention economy. That is now our scarce resource. There are only so many waking hours in a day and every company and social media platform is fighting for their sliver of your attention.

    However, the irony of the attention economy is that, while it has gotten easier to make and share “content” with the world, the quality of that content matters less than the attention it garners. Because that’s what the system rewards. Whatever you may think about Trump, he has mastered the art of attracting attention.

    Ev Williams – co-founder of Twitter and CEO of Medium – recently wrote a piece on this topic called: Words still matter. It is very much about the mission driving his publishing platform, Medium. Here is an excerpt:

    It’s not that there aren’t journalists, publishers, and thinkers doing great work and putting it out there. But the realities of the attention economy are very tough for those who create things designed for anything but the widest possible (i.e., lowest-common-denominator) audience. For ad-driven sites, the revenue per reader has been dropping for years (while the experience worsens and privacy disintegrates), leaving little room for research, fact checking, or polish… let alone nuance or complexity. The system demands quantity. It demands speed. And it demands little else — except our clicks.

    Their solution is the Medium Partner Program. It is an “open paywall” that allows publishers of great content to lock some of their best content behind a paywall. Their view is that to fix the attention economy, we need to move beyond ad-supported lowest-common-denominator content. 

    This not entirely novel, but they are calling themselves the first “open paywall” platform. I would be curious to hear your thoughts about this in the comment section below. I’ve had a few people suggest to me that I employ a similar approach for this blog. I’m not convinced.

  • Empowering food truck entrepreneurs

    When I lived in Philadelphia I survived on food truck food. My go-tos were an egg and cheese breakfast sandwich for $2.50, a bowl of spaghetti for $4.50, and a pretty substantial chicken burrito for somewhere around $5 or $6. The food was good. It was filling. And it was all priced perfectly for a poor student, which I was at the time.

    I still remember when Renzo Piano came to the University to talk about potentially renovating the design school. Somebody stood up and asked if he had considered the placement of food trucks in his plans. Piano responded by saying: “I am Italian. Don’t worry. I will provide for the food.” This is how ingrained food trucks were and are in the culture of the city.

    The other great thing about these food trucks is that they are a low-cost way of starting your own culinary business. Many were run by immigrants. And some of these “trucks” were so small that I used to have to duck in order to make my way to the concession window. There was nothing fancy about them. But they worked.

    These days I don’t really eat at food trucks anymore. They are not as widespread here in Toronto as they are in Philly. I also find them expensive and the portions are usually so small that you have to order 2 or 3 things. They feel like the anti-food truck.

    I appreciate that there’s a growing market for trendy and “gourmet.” But there’s value in low-cost options and in lowering the barriers to entry for aspiring food entrepreneurs. There are numerous examples of humble food trucks growing into full fledged restaurants. Let’s encourage more of that.

  • How to revive the American Heartland

    “Every unemployed American is a failure of entrepreneurial imagination.” -Edward Glaeser

    At the end of September, economist Edward Glaeser returned to the Manhattan Institute to deliver the 2017 James Q. Wilson Lecture. If you’re a regular reader of this blog, you may remember that he was there in 2016 and delivered a presentation called “The End of Work.” 

    This year’s talk continues that theme, but focuses on joblessness and economic stagnation in the US Heartland. 

    The solutions he puts forward are based on a very simple economic model for growth that he refers to as “rules and schools.” Simply put: The rules of a place need to support business and entrepreneurship and the people need to be educated.

    One example he gives is of a woman in Detroit who was trying to start a food truck business but had to wait 18 months for a permit. There’s no reason that should happen. He blames the insider restaurant lobby for working to keep competition at bay. The rules are bad. We have similar problems here in Toronto with our food trucks. I think it’s wrong.

    He also pokes fun at the Bilbao effect. Yes, Frank Gehry created a beautiful piece of architecture. But did it lower the unemployment rate?

    The last thing I’ll mention are his comments regarding Amazon HQ2 because I like how he frames it. 

    Firstly, Amazon is going select a city that doesn’t need Amazon. It’s going to go where there’s already abundant human capital. 

    Secondly, “smokestack chasing” is not the right economic development strategy. The key questions should be: How will this benefit our human capital and how many new firms could it create?

    If you have an hour, check out Ed Glaeser’s talk. If you can’t see it below, click here.

    [youtube https://www.youtube.com/watch?v=e8LvHpRCUYk?rel=0&w=560&h=315]

  • Canada’s 1%

    The Globe and Mail recently published an article about Canada’s highest paid workers. It uses census data spanning 2005 to 2015.

    There’s a feature that allows you to enter your before tax income, your location, and your gender to see how you compare to “the 1 percent.”

    But in case you don’t feel like doing that, here’s the minimum income required to be in the top 1 percent as of 2015 for each province/territory:

    And here are the communities where the 1% saw the biggest pay increases:

    The data certainly underscores how important commodities have been for growing individual incomes. Alberta, Newfoundland, and Saskatchewan are resource-rich provinces.

    However, the above data doesn’t capture the collapse of oil prices in 2014. So it would be important to also consider what this data looks like outside of a commodities boom.

    Charts: The Globe and Mail