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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  • Multiple representation

    house by Edoardo Panella on 500px.com

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    If you’ve ever bought a property, you might be familiar with something called “multiple representation.” It’s when one real estate agent represents both the seller and the buyer for a particular transaction. It may also be called “dual agency.”

    The reason this can happen is because, here in North America at least, real estate sales are typically done with two agents: a seller’s agent and a buyer’s agent. The real estate commissions are (directly) paid by the seller to the listing brokerage, but it’s usually split between both brokerages and agents involved in the transaction.

    However, if you’re an agent-less buyer and you happen to come across a property that you like on your own (perhaps by browsing around online), the selling agent will likely ask you to also sign a representation agreement with them. And that means entering the world of “multiple representation.”

    Here’s some of the wording that the Ontario Real Estate Association uses:

    MULTIPLE REPRESENTATION: The Listing Brokerage has entered into a Buyer Representation Agreement with the Buyer and represents
    the interests of the Seller and the Buyer, with their consent, for this transaction. The Listing Brokerage must be impartial and equally protect
    the interests of the Seller and the Buyer in this transaction. The Listing Brokerage has a duty of full disclosure to both the Seller and the Buyer,
    including a requirement to disclose all factual information about the property known to the Listing Brokerage.

    But I don’t understand how this can work.

    You now have a sole agent that is supposed to act as a neutral facilitator between (1) a party that is paying them all of their salary for the transaction (and which increases as the selling price goes up) and (2) a party that just came off the street (and where there’s no preexisting relationship).

    That’s why multiple representation scenarios always make me uncomfortable. Real estate already has too many information asymmetries for my liking and this feels like a conflict of interest in almost all of the cases. I guess that’s why they are not allowed in many states in the US.

  • Guest Post: How We Changed Toronto

    This past summer I participated in a Jane’s Walk here in Toronto, where I was the only speaker to advocate for removing the eastern portion of the Gardiner Expressway.

    After my short talk I was feeling a bit like the black sheep of the group. Either nobody felt the same way as me, or nobody was willing to speak up. Most of the other people there seemed more enamoured by architect Les Klein’s “Green Ribbon” proposal.

    But as I put down the megaphone and began walking to the next stop, a man came up to me. Truthfully, I didn’t know who he was at first, but he reassured me that it was the right thing to do. The Gardiner East should come down.

    Eventually he gave me his business card. On the front it said: John Sewell. And as soon as I saw that I said out loud: “I know this name!”

    John Sewell was a member of Toronto City Council from 1969 to 1984 and was Mayor of Toronto from 1979-1980. Today, he is a Toronto activist and has written dozens of books, mostly relating to urban issues.

    His latest book, released last month, is called: “How We Changed Toronto – The inside story of twelve creative, tumultuous years in civic life, 1969-1980.”

    And today I’m delighted to share a guest post that he has written for Architect This City. The focus of his post below is on the importance of community participation in the planning process and how it was used in this city in the 1970s.

    If you’re a developer, this post might scare you. I think there’s often the perception that communities will generally oppose any sort of development. But there are developers in this city, such as Westbank, which have been taking a more proactive approach to community consultations. And it appears to be working for them. So maybe this is something we should be talking about.

    If you have any thoughts on this, let’s have a discussion in the comment section below. I hope you enjoy the guest post. Thank you again, John.

    _________________________________

    Transportation plans, redevelopment schemes, urban expansion: municipalities address big issues like these in several different ways. A staff report can be requested; consultants can be called in; a competition can be held.

    The device used most successfully by Toronto City Council in the 1970s was a committee of citizens working directly with city staff and council members. It produced enormously successful results, as I recount in my new book `How We Changed Toronto’, but sadly it is rarely used in the 21st century.

    In 1970 City Council appointed a working committee of local residents and several councillors to create a new plan for the Trefann Court Urban Renewal Area, a neighbourhood that had been fighting the city’s plan of demolition for half a dozen years. With the help of a city planner hired specifically for this task, a new plan satisfactory to the different factions in Trefann was hammered out within a few years, then successfully implemented.

    In 1973, when the new Council pondered how to rethink a downtown designated for more office towers, it appointed the Core Area Task Force, a body of community representatives and developers, to give direction to city planners as a new approach to the downtown was devised. The result was the remarkable Central Area Plan which encouraged housing downtown and mixed uses, put an end to windy plazas, and generally created an environment that was active and felt comfortable to anyone on foot.

    In 1974, as Council faced the problem of how it would redevelop 45 acres of wasteland on the edge of the downtown, it appointed a working committee of concerned residents and councillors to give direction to city staff. It’s fair to say that no one had a good idea of how the site should be developed, but the working committee and city staff conceived a brilliant plan which was quickly executed – the first new building was under construction within two years of the working committee being established – and the neighbourhood, now known as St. Lawrence, remains one of the great successes of the latter half of the 20th century.

    From the 1980s onward, City Council has touted the idea of citizen participation, but confined that activity to public hearings on decisions recommended by staff. That generally is the practice today, although open houses have been added, as though showing people plans and getting informal comments is a good way of involving people.

    What’s lost in public hearings and open houses is the creativity that a group of committed, diverse individuals can bring to a problem when they meet together over a number of weeks and months. The members of the group know the local scene but they aren’t experts, so they must be advised by planners and other professionals about the issues they should address, the pitfalls of some options, and the trade-offs available before decisions are taken. It is an open ended process fueled by debates about different opinions, but held together by a common purpose and the realization that those around the table are playing an important role in shaping the direction of the city.

    The working committee that started meeting in Trefann had no clear idea in advance of what the plan it finally arrived at would look like. It was the same with the Central Area Plan, the St. Lawrence community, and the other processes in the 1970s which I touch on in the book. The process that the politicians, staff and residents committed themselves to made all the difference.

    One reason this kind of process is not employed much today is because too many elected figures take an ideological approach. They think they have the answers which they have been elected to implement, rather than to establish ways in which many more minds can be involved in seeking results which are widely agreed on.

    As well, city staff are not seen as independent professional advisors serving the public at large, but as a part of a corps serving the mayor and city councillors. In the 1970s in Toronto there was a clear separation between the politicians and the administration, and there were frequent (and welcome) debates on the floor of City Council between the two factions. Both were there to serve the public although they might have different ideas of how that should be done. This kind of tension was seen as entirely appropriate.

    In Toronto (and probably other cities) the situation is now even more complicated as councillors see themselves not as public servants for a few years, but rather as individuals with a lifetime commitment to holding public office. Too many members of Toronto City Council have been there for more than 15 years, and they fear that taking a principled stand on an important issue might result in the worst of all possible outcomes, their defeat. They decide not to take on the big issues.

    Toronto is currently facing significant problems.  The downtown is being overrun with new tall condo towers, for which the city does not have the infrastructure, and the new housing is not designed to meet the needs of future residents. It is the perfect opportunity for a new look at the Central Area Plan, using the same mechanisms as in the 1970s: a holding bylaw so the new plan won’t be pre-empted by development applications; a citizen-led task force including some councillors, advised by city staff. Who knows what brilliant plan an open ended process can recommend?

    Another problem is money. Toronto does not have enough money to upgrade its transit system or repair the affordable housing it owns, let alone build the new affordable housing it needs. The demands of the mayor that other governments should pay are understandably disregarded. It is time that the city had its own revenue sources, and what better than a citizen led initiative to point the way?

    It’s the same with a plan to build the affordable housing the city needs, to ensure development activity enlivens the near suburbs, to put some restraint on the continued low density subdivisions which are being unrolled far beyond the city’s borders, to restructure the megacity into something which works for the different communities within the city. These challenges all need strong citizen driven processes.

    As I recount in `How We Changed Toronto’, the 1970s really did change Toronto for the better. The city has been coasting ever since on those successes. It is time for renewal, and using the successful mechanisms from forty years ago is something worth doing.

    -John Sewell

  • City building jobs

    I get a lot of emails from readers of this blog. I try my best to answer every single one of them, but sometimes I fall behind and fail spectacularly at that. (The snooze feature in Mailbox and Google Inbox is one of the best inventions ever.)

    One of the most common emails I receive is about careers. Sometimes it’s someone looking for a new job or for advice on how to break into the industry (usually real estate development). And sometimes it’s an employer (or recruiter) with a role they need filled. 

    It’s hard to match up supply and demand when they arrive in my inbox on an ad hoc basis like this, but I have been thinking about ways I might be able to help these people out.

    So today I thought I would try something new. If you have a relevant job listing that you’d like me to distribute to the ATC community (something in architecture, planning, real estate, tech, and so on), email it to me at b@brandondonnelly. 

    If I get enough high quality listings, I’ll send them out in my newsletter. And if everyone finds it valuable, I may make it a regular feature.

  • Foursquare uses their global foot traffic data to accurately predict iPhone sales

    I am a fan and long time user of Foursquare – now known as both Foursquare and Swarm.

    Foursquare has struggled against competitors such as Yelp.com when it comes to local business recommendations. And I have less than 100 friends on my Swarm. It doesn’t seem to be that popular here in Toronto.

    But I’ve always loved the data collection aspect of Foursquare / Swarm. Even though most people don’t seem to care about that. When I check-in somewhere, such as the gym, it’ll tell me how many weeks in a row I’ve been there, whether it’s a new personal record, who else is nearby, and a host of other things.

    I’ve always felt like there was so much potential in all of the data it was collecting.

    Well the company is starting to make better use of that data. Recently they used their foot traffic data at Apple stores (I am assuming this goes beyond just check-in data) to predict the number of iPhones that Apple was going to sell globally following the launch of the 6s and 6s Plus.

    They predicted between 13 to 15 million handsets and it turns out they were right:

    This validates the accuracy of our prediction and while we’re proud of the result, we certainly aren’t surprised. Foursquare’s data is essentially the world’s biggest panel of foot traffic data — we have the best sense of the trends and patterns of the movement of people and their phones around the world.

    This is powerful stuff. If there were a way for me to be bullish on Foursquare beyond just writing this post, I would be.

  • We are all selfish bastards

    cyclist on bike lane by Axel Bueckert on 500px.com

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    We are all selfish bastards when it comes to sharing road space and public space.

    When we drive, we complain about pedestrians jumping out in front of us, crazy cyclists who get in our way, and under-utilized bike lanes that are taking away valuable driving space and creating traffic jams.

    When we take surface transit (such as buses and streetcars), we want all the cars out of the way so that we can move more efficiently. And we complain about drivers who don’t stop to let us off and on when the streetcar doors open. (Toronto specific reference.)

    When we cycle, we complain about cars parked in the bike lanes, people who don’t look before changing lanes or opening their car doors, and drivers who honk at you because they just want you off the road and onto the sidewalk.

    And when we walk, we complain about cyclists who ride on the sidewalk (they should be on the road!), cars that don’t stop to let us go, and slow walking groups who linearly block the entire sidewalk so you can’t pass.

    We are never happy. And we automatically assume that we could do it better. (I know I’m guilty of this.)

    But here are a few things to consider the next time you’re flipping the bird to someone on the streets. Here are a few things that we do know about urban mobility.

    There is an unprecedented number of condominiums in the development pipeline right now in Toronto. For argument’s sake, let’s assume 75,000 condominium suites – many of which will be built in central areas of the city.

    At a parking ratio of 0.6 stalls per unit, which isn’t an unreasonable assumption today, that’s 45,000 new parking spots and potentially 45,000 new cars in the city. 

    If you think that 45,000 new cars will be able to get fully absorbed into the core and somehow move around in an unfettered way, then I believe you are mistaken. 

    If you think that there’s something that can be done to magically expand road capacity to handle all of these additional cars in the city, then I believe you are mistaken.

    And if you think that adding a bike lane is the only reason you are currently stuck in traffic, then I believe you are missing the bigger picture.

    Over a decade ago, we made a decision in this region to encourage building up, instead of building out. And along with that decision came a necessary rethink of how we get around. That transition is what we are living through right now.

    The other thing we know is that the 4 modes of mobility that I started this post with are ordered from least sustainable to most sustainable. 

    Electric self-driving vehicles will reduce the impacts of driving, but it will also transform it into something that feels more like transit and less like the driving we know today. That will be a very good thing.

    But I’m not yet convinced that it will solve all of our problems. To do that I think we will need to adopt a much more balanced and unselfish view of what it takes to move around a city. That, of course, isn’t always easy.

  • Why we should fight the divided city

    No man

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    There has been and continues to be many divided cities around the world.

    Berlin had the Berlin Wall. 

    Northern Ireland (mostly Belfast) has its Peace Walls that still separate Protestant loyalists and Catholic republicans from each other. 

    Beirut had the Green Line, which separated the predominately Muslim side in the west from the predominantly Christian side in the east during the Lebanese Civil War. And I understand this is still the case today.

    Detroit has 8 Mile Road, which is a psychological barrier rather than a physical one, but one that still sharply separates whites (blue dots, below) and blacks (green dots, below). The image below is from Wired Magazine.

    image

    And even here in Toronto you could say that we’ve become a divided city, albeit without the civil wars or race riots that have plagued the other cities listed above. Our voting patterns suggest a real urban-suburban divide and the many ethnic groups in this city continue to concentrate themselves in specific areas.

    I’ve been thinking about this phenomenon in the context of a recent article I read talking about closed vs. open social networks. The article was talking about career success, but I think the lessons are also transferrable to cities.

    The argument made in the article is that people who are able to position themselves in open networks – that is, become the connector between diverse kinds of social groups – are more likely to succeed than people who position themselves in closed networks where they are only surrounded by people they already know and by people who are similar to themselves.

    And the reason for this is because people in open networks end up getting exposed to a broader set of viewpoints and ideas. They get a more accurate view of the world and they are able to problem solve better than those who may be coming at it from a more myopic or singular perspective.

    But the challenge with open networks, is that there seems to be an innate human tendency towards closed networks. We love what is familiar. We love what is comfortable to us. In other words, we are attracted to people that are similar to ourselves. This is known as homophily.

    So it’s not surprising that we tend to cluster ourselves in cities. Yes, there are economic benefits to doing so (known as agglomeration economies), but there’s also a certain feeling of solidarity that comes from being around other people with the same view of the world. There’s no tension because everyone has the same beliefs, whether that be religion or politics or sports or what to eat.

    But just like there’s an argument to be made that successful people should try and resist the pull towards closed networks, I think there’s also an argument to be made that successful cities should try and resist the pull towards closed and divided cities.

    That’s why some people believe that tolerance is a critical ingredient to fostering creativity in cities.

  • Blogging as city building

    This past week I received 2 separate invitations to talk at events about blogging as a form of city building.

    The first is a Pecha Kucha talk being held here in Toronto on Tuesday, October 20th, 2015. If you’ve never heard of the Pecha Kucha movement, it’s basically all about rapid fire presentations. Each person gets 20 slides and 20 seconds for each one. 

    Here are the details for the upcoming Toronto event:

    image

    The second event is being held in Ottawa in the new year. I’ll write more on that closer to the date when I have more information to share.

    I haven’t yet figured out exactly what I’m going to talk about at each event, but I am starting to think about a few things.

    When I started writing this blog, it was intended simply as an outlet for my own city-related – and also personal – thoughts. Ultimately, the blog evolved into having its own mission, which is to promote the building of beautiful, sustainable, and globally competitive cities. And so clearly in my mind blogging was and is in fact a form of city building.

    But writing is vastly different than the kind of city building I do for a living. During the day I worry about things like rental rates, building setbacks, bulkhead locations, parking counts, and a bunch of other fun stuff.

    The two are certainly related, but the latter feels a lot more tangible. The result is spaces that people will occupy and buildings that will have some sort of impact on the overall built environment.

    But as you all know, city building is a lot more than just bricks-and-mortar. It is political. It is emotional. It is subjective. It is ego-driven. And it is so many other things. Because of this, words do have a role to play in shaping the cities we live in. And hopefully my words are having some kind of positive impact.

    At the same time, I see myself as simply part of a larger set of trends that are happening in both city building, as well as in many other sectors. Trends around transparency, decentralization, and the democratization of information.

    Technology today allows us to connect at zero marginal cost. And that is empowering people like me to self-publish, people to crowdfund real estate development projects, people to crowdsource community feedback for projects, and to do many other exciting things that weren’t possible before. Without this blog, most of you reading this right now would have absolutely no idea who I am.

    So I guess I kind of do know what I’m going to talk about.

  • The world’s top 23 financial centres (after London and New York, of course)

    The 2015 edition of The Global Financial Centres Index (GFCI) was just released last month. It is often used as one of the sources for ranking financial centres.

    The index – which is now in its 18th edition – is created using two main ingredients. The first is an analysis of 5 broad areas of competitiveness: 1) business environment, 2) financial sector development, 3) infrastructure, 4) human capital, and 5) reputational & general factors. And the second is an online survey given to financial services professionals. The 2015 edition includes responses from 3,194 professionals.

    Below are the top 25 financial centres in the world according to the GFCI (the full list has 84 cities).

    image

    Here are a couple of things to note from this year’s index: 

    London has overtaken New York for the top spot – but both remain more or less at parity if you dig into the numbers. 

    Dublin is performing particularly well in Western Europe.

    The leading centre in Eastern Europe is Warsaw (38th), with Istanbul just behind it.

    Toronto is now second in North America, only to New York.

    Sao Paulo remains the top Latin American centre.

    And, Los Angeles (49th) and Liechtenstein (60th) join as new entrants this year.

    If you’d like to see the full report and ranking, click here.

  • Why can’t cities reach equilibrium?

    The October issue of The New Yorker has an interesting piece called: Naked Cities – The death and life of urban America.

    I find the article ends up rambling a bit, but I like the idea presented right at the beginning. The idea that cities can never really find equilibrium. They’re either dying, or victims of their own success.

    Here’s that paragraph:

    Cities can’t win. When they do well, people resent them as citadels of inequality; when they do badly, they are cesspools of hopelessness. In the seventies and eighties, the seemingly permanent urban crisis became the verdict that American civilization had passed on itself. Forty years later, cities mostly thrive, crime has been in vertiginous decline, the young cluster together in old neighborhoods, drinking more espresso per capita in Seattle than in Naples, while in San Francisco the demand for inner-city housing is so keen that one-bedroom apartments become scenes of civic conflict—and so big cities turn into hateful centers of self-absorbed privilege. We oscillate between “Taxi Driver” and “The Bonfire of the Vanities” without arriving at a stable picture of something in between.

    I like this because there’s truth to it. But at the end of day, this is just one of the many challenges facing great city building. 

    To solve the problem of affordable housing you could just be a city in decline. But that’s not much fun. So the better option, however difficult it may be, is to figure out how to manage the negative externalities associated with winning.

  • The future of housing in Toronto

    On Monday evening I gave a 45 minute talk at the Rotman School to a delegation of about 70 people from Portland. The talk was about Toronto housing, but more specifically about the history and possible future of high-rise housing in this city. 

    Thanks to everyone who commented on my lead-up post over the weekend. It was really helpful to hear what other people in this city (as well as people not from this city) are thinking. Many of the comments also echoed my own beliefs.

    The narrative I told in my presentation was about two significant, yet very different, periods of time when Toronto built more high-rise than low-rise housing. The first was our post-war suburban slab tower boom. And the second, which we are currently living through, is really the outcome of the Places to Grow Act (2005).

    But as I mentioned over the weekend, the really interesting question is: what’s next?

    In my view, what we are seeing today is fundamentally different than what we saw in the post-war years. Despite the fact that we were building towers then and we are also building towers now (albeit much taller ones), the ideology behind them has changed. It has gone from suburban to urban.

    Toronto’s post-war towers were built upon a particular dream. The dream of getting in your car, escaping the decay of the city, whisking up the Don Valley Parkway (nobody whisks on the DVP), and being rejuvenated by all the light, air, and green space afforded to you in your Ville Radieuse.

    But it turns out that people of means didn’t want that back then. They wanted a suburban house. That was the dream.

    Today, however, cities are back in vogue. 

    Companies are moving into city centers to compete for the best talent. Retailers are moving downtown to capture disposable income. And the most pressing problems are no longer about decay and urban blight, they are about housing affordability, gentrification, and too many rich people pushing out the poor.

    The narrative has changed.

    So in the context of Toronto, I feel as if we are at an inflection point when it comes to housing. The multi-family dream may not have stuck decades ago, but I believe it will stick for many, though not all, today. And this will happen for a variety of reasons ranging from sheer preference to sheer necessity. The alternative is no longer an affordable bungalow on a 50′ x 150′ lot that happens to be 10 minutes from the subway.

    But as a result of this shift, I also think a number of other things will happen. 

    Eventually, Toronto will look to loosen some of the land use restrictions on its single family neighborhoods. This could mean “gentle” low-rise intensification (new planning buzzword, take note), as well as the acceptance of laneway or accessory dwelling housing. This won’t be popular, as one person said in the comments over the weekend, but eventually the pressures will become too great.

    At the same time, I think we’ll be brought full circle with respect to our suburban towers. The suburban ideals in place at the time means that many of these tower communities have relatively low densities. That represents a tremendous opportunity for this city and it’s only a matter of time before we truly figure out how to unlock them.

    But for all the change and disruption that’s happening in Toronto, I think it’s also worth saying that those of us who live here should consider ourselves a lucky bunch.

    One of the things I actually asked the delegation from Portland was, what struck you the most when you arrived in Toronto? The response I got was: its vibrancy. 

    Everywhere you walk downtown, they said, people are on the streets – walking, cycling, and hanging out. In fact, some said it’s almost hard to remember which street is which because every street seems to be so full of activity. Most North American cities do not have this kind of sustained vibrancy in the core, I was told. And so that makes us a pretty special place. We must be doing something right.

    It’s easy to take those sorts of things for granted when you live somewhere. So today I’m trying to do the exact opposite of that. I’m trying to stop and appreciate the place I call home.