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.
On Friday my friend Paul Crowe (of BNOTIONS) wrote the following Facebook post (rant) about the retail landscape here in Canada. It was a direct response to the claims that the recent loss of Target, Mexx, and Sony is “a warning sign for our economy.” If the text is too small below, you can also click here to read it on my wall.
I would say that competition did impact these retailers, but the key message remains the same: there’s nothing wrong with failure and companies going out of business (although success is obviously a more ideal outcome).
And it shouldn’t necessarily be interpreted as a bad thing for our economy. In fact, a lot of the time it’s something quite healthy. When companies stop being competitive, the market is supposed to punish them. That’s how this game works.
The article talks about some of the things that the Rust Belt is doing to revitalize their cities and the lessons that many cities in Ontario – which are facing similar fates – could learn from. It’s worth a read.
I’m not going to summarize his article, other than to say that some of the key points were around tax increment financing, tax incentives, University connections, a DIY/entrepreneurial culture, and the American tradition of philanthropy – which Radwanski points out is probably the least imitable for Canada.
And it’s this last point that I would like to focus on first. The US has a deep history of people getting rich and then giving back – certainly more so than in Canada in my opinion.
If you think about the resurgence of cities such as Detroit, you’d be hard pressed not to think of people like Dan Gilbert. He has become the poster boy for Detroit’s resurgence by moving his companies to downtown and buying up most of the office buildings. If and when Detroit comes back (I think it’s a when), Gilbert will easily be one of the biggest beneficiaries.
Now, you could argue that this is made possible because of greater income inequality, but there’s something to be said about powerful individuals acting on intrinsic passion. Gilbert is investing in Detroit because he personally wants to see his home city come back. And that’s hard to replace.
The second point I would like to focus on has to do with this snippet:
With oil’s current slide, Canada really can’t afford for it to remain a drag – and in fact there is some expectation that Ontario will instead reclaim its old role as the leader of Canada’s economic growth. Its premier, Kathleen Wynne, recently expressed optimism that plummeting oil prices and a sinking dollar will prove a boon to manufacturing. “I don’t wish for low oil prices and a low dollar for Alberta,” she said earlier this month. “But at the same time, we want our manufacturing sector to rebound. So if that [low oil price] helps, then that’s a good thing.”
I don’t know what context this was said in, but I continue to feel strongly that we cannot rely on low oil prices and a low Canadian dollar for Ontario’s competitiveness. That is a terrible business model, and an unsustainable one. We need to figure out ways to create value and grow the economy without relying on currency differentials and other macroeconomic factors. Radwanski is right to point that out in his article.
So let’s hope we don’t let any short term benefits go to our head. There’s lots of exciting work to be done.
It’s wintertime in Canada and that means people complaining about the cold and/or the fact that in our climate there are certain things that simply can’t (or shouldn’t) be done when it comes to city building.
A great counter example is Igloofest in Montreal. Unless you’re into electronic music (OK, fine, young people call it EDM today), you probably haven’t heard of it. But it’s basically an outdoor dance party on Montreal’s waterfront in the middle of the winter.
The opening night is tonight and the overnight low is expected to hit -27 degrees celsius. Take a look at the video at the top of this post though (click here if you can’t see it). That’s how many people are going to crowd outside in the cold and dance their hearts out this evening.
And so whether you’ve got harsh winters or summers, there are always creative ways to make it work for you. You just have to own it.
If anyone would like to take a trip to Montreal this winter, I promise to stand by my words and dance outside in the cold. Have a great weekend everyone.
“After a thorough review of our Canadian performance and careful consideration of the implications of all options, we were unable to find a realistic scenario that would get Target Canada to profitability until at least 2021,” said Brian Cornell, who became the new chief executive officer last summer.
I can already hear the keyboards typing as business schools across Canada and the world prepare this case study: Why did Target Canada fail after not even 2 years?
I don’t really want to focus on that in this post, but my initial sense is that they came in too big and too undifferentiated. Maybe they underestimated the particularities of the Canadian market and shopper, but they certainly didn’t come in lean.
They bought up over a hundred Zellers leases and used that platform to obtain a critical mass quickly. But the problem with this approach is that it meant lots of upfront costs and fewer opportunities to adjust as they gained real feedback from the market.
Regardless of what happened, I’m more interested in what the impact will be to the retail real estate industry going forward. Remember, Target is an anchor. And when it entered Canada, it was viewed as an opportunity to refresh some of our tired malls – many of which were already showing signs of dying.
So what happens now? Who comes in to fill their shoes?
Back in 2011, blogTO ran an article calling Geary Avenue one of the ugliest streets in Toronto. And it’s certainly up there. It’s an industrial street with a mixture of different building types (lots of autoshops), giant power lines running along the south side of it, and a railway disconnecting it from the city to the south.
But as somebody who used to live around the corner from this street, I’ve had my eye on it for a number of years. Despite the fact that it was never very pretty, it always felt like an area with lots of potential. And sometimes it’s the areas that seem most unlikely to gentrify, that end up doing exactly that.
So whether you call it Dovercourt Park, Dovercourt Village, or some other name, I think it’s only a matter of time before Ossington cool moves north and the area in and around Dovercourt Road and Dupont Street becomes one of the hippest areas in the city. Get ready.
Full disclosure: I own a house very close to this neighborhood.
This morning Richard Florida published an interesting CityLab article that talks about how different personality types cluster within cities. The study he references was done by a team of psychologists that surveyed 56,000 people in the London metro area.
Here is a summary of what they found (darker red indicates higher concentration of each personality trait):
Probably the most interesting personality trait is the “openness to experience” one, as there appears to be a clear divide between people who live in the center of London and people who live in the suburbs.
Here’s how Florida describes it:
The most clustered personality trait the researchers found was “openness to experience” (bottom left map), which is concentrated in the center of London. Openness to experience, according to a wide body of psychological studies, is associated with creativity, innovation and entrepreneurship. This type is concentrated in higher density neighborhoods, with higher housing prices, more ethnic and religious diversity and higher crime rates. Meanwhile, the blue concentrations at the periphery indicate that there are fewer people open to experience in metro London’s suburbs.
It’s fascinating to think about the role of psychology in city building. It’s not something we often talk about, but it’s there.
I live downtown and I would definitely classify myself as extraverted and open to experiences. How would you classify yourself?
The headline immediately caught my attention because conventional economic wisdom would suggest that supply constraints – whether natural or artificially created – generally have a negative effect on housing affordability.
To be clear though, I support Ontario’s greenbelt. I think an urban growth boundary is the right thing to have if we want to build sustainable, walkable, and transit-oriented communities. But I’m also not blind to some of the potential (negative) externalities.
However, Keesmaat’s article got me wondering just how prevalent those externalities might be and to what extent our greenbelt is actually impacting housing affordability in Toronto. In her article she cites a recent report by the Pembina Institute that very clearly argues the following:
“There is no shortage of land throughout the GTA [Greater Toronto Area] to build single-family homes for decades to come, but this land is predominantly located far from the City of Toronto and other established centres of employment in the GTA.”
More specifically, the report found that of all the land available for development in the region (within our growth boundary), 81% of it is projected to still be unused by 2031. This got me thinking: it’s not that there isn’t land still available in the region; it’s that there isn’t land in the areas where demand is the greatest.
Put differently, young families aren’t clamoring for single family homes in High Park and Leslieville because the greenbelt has restricted their ability to find new housing. They’re doing so because they want to live in neighborhoods like High Park and Leslieville.
If you dive into the data, the report shows that in 2004 the average price of a detached home in Toronto was about $117,000 more than the rest of the Greater Toronto Area. As of 2013, that spread had grown to about $200,000. And indeed the data shows that it’s the core of the city where home prices seem to be appreciating the fastest.
So when it comes to housing affordability and supply, the greenbelt may actually be a red herring. Releasing it would not increase the supply of housing in areas where demand is already high, which is probably why this same report also found that – with or without an urban growth boundary – most Canadian cities are seeing similar increases in home prices.
So what should we be doing?
I think we should do two things: (1) focus on accommodating more growth in the areas that people already want to live in, and (2) figure out ways to transform the less desirable areas into more desirable ones. This second one will be the hardest, because it’s likely going to mean changing car dependent areas into transit-oriented ones, which is no easy task.
The good news though is that we are already doing these things. There’s more that I would like to see happen, but we’re headed in the right direction.
If your city has a greenbelt or you have experience with greenfield development in the Toronto region, I’d love to hear your thoughts in the comments. This is an area of development that I’ve never really been involved with.
I’ve written about the Tenderloin neighborhood in San Francisco before. It’s an infamous neighborhood in the center of the city that has for decades resisted gentrification (which was the topic of my post).
But as the technology sector continues to urbanize, many fear that it’s only a matter of time before it does eventually gentrify. A new nickname has even emerged for the neighborhood: the Twitterloin.
However, a local nonprofit called the Wildflowers Institute is trying to ensure that gentrification doesn’t erase the cultural assets currently housed in the neighborhood. Through a project called “Hidden Gems”, the group is literally knocking on doors to find active artists within the community (many of whom live in single rooms) and then supporting them through fellowship programs and other investments.
What’s fascinating about their approach is that they are actively seeking out the informal activities taking place within the community – activities that would otherwise be hidden and then potentially lost. Once discovered, they then do a number of mapping exercises to keep track of this data.
As somebody who believes city building will become a lot more data driven in the future, I think this is a really interesting initiative. And as gentrification pressures continue to increase in San Francisco, I’m sure this information will help guide the discussions. You can’t account for something you don’t know exists.
In it, Shawn Achor argues that we’ve got it all wrong and backwards when it comes to our happiness. We constantly set (moving) goals and then tell ourselves that once we achieve those goals we’ll be happy.
We tell ourselves that once we get that degree, buy that new home, or secure that new promotion, that we’ll be happier. And I’m definitely guilty of that sometimes. I think many goal oriented people are.
But his argument is that if happiness sits outside of those moving targets, we’ll never be as happy as we could be. Happiness needs to sit within those goals. In other words, we need to focus on being happy today, not tomorrow.
But the other powerful thing about this approach is that greater happiness has been shown to improve productivity. So if you simply flip this equation, you’ll probably be not only happier but more successful.
At the end of last year, somebody told me that they were really enjoying my blog because of how positive I always seem to be about the future of cities and the world.
And that was honestly one of the nicest things to hear from a reader, because I truly believe that optimism, not pessimism, is what moves the world forward.
One of the projects that I’m most excited about here in Toronto is the renovation and addition to One Spadina Crescent. The building sits in the middle of a roundabout along Spadina Avenue and occupies what is easily one of the most ceremonial positions in the city.
But for as long as I can remember, the building hasn’t been living up to its full potential. So much so that in the 1960s it was going to be demolished in order to make way for the proposed Spadina Expressway. That would have been an absolute tragedy. Thankfully, our friend Jane Jacobs stopped that one.
Today, exciting things are happening at One Spadina Crescent. The Daniels Faculty of Architecture, Landscape, and Design at the University of Toronto is in the midst of renovating and expanding the building, and will eventually relocate there from its current location on College Street.
When it’s all said and done, One Spadina Crescent will look something like this (via Daniels).
From the south:
From the west:
From the north:
What’s most exciting to me about this project are the following 3 things:
First, it’s an opportunity to connect One Spadina Crescent to the surrounding urban fabric. Today, it feels very much like an island in the middle of the street.
Second, it’s a wonderful example of the new layering on top of the old, which is something that I believe we should aspire to do in our cities. The University of Toronto has become quite good at doing that on campus.
