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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  • Toronto’s Bloor-Danforth subway corridor is a land use crime scene

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    Yesterday after my post on leveraging LRT, I stumbled upon an interesting and timely article written by Richard Joy, who is the Executive Director of the Urban Land Institute (Toronto).

    The article talks about some of the transit-oriented development that we’ve seen at various nodes along Toronto’s Yonge subway corridor (St. Clair, Eglinton, Sheppard, and so on). But it goes on to argue that these are exceptions to the rule. For the most part, we’ve missed the boat:

    The tragic history of our massive capital investments into transit infrastructure is massive under-development.

    Indeed, the Bloor-Danforth subway corridor is a land use crime scene.

    His main argument is that until we expand the supply of transit-oriented land (through increased intensification), we will continue to undersupply the kinds of walkable and transit-oriented neighborhoods that many, if not most, people actually prefer. And that, out of necessity, will force people into their cars. Because affordability trumps location preference.

    As one example, he talks about the intersection of Bloor Street and Dundas Street in the west end of the city. Next to Union Station, this is probably the best connected mobility hub in the region. You have the Bloor-Danforth subway line, a streetcar line, and a GO regional rail line which all feed into it. Next year it’ll also become a stop for the new express train to Pearson airport.

    And yet the city has a history of opposing intensification in this location, including the old Giraffe Condominiums proposed by TAS. Does that make sense to you?

    Image: Flickr

  • Leveraging LRT

    One of the biggest pieces of infrastructure currently under construction in Toronto is the Crosstown LRT line, which will run on and under Eglinton Avenue right through the heart of midtown. The total length of the line is 19 km, and 10 km of it will be underground along with 12 of its stations.

    Here’s a map:

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    But as the Chief Planner of Toronto, Jennifer Keesmaat, rightly pointed out in this blog post earlier this year, it’s important to think of this line, not just as a piece of transit infrastructure, but as a broader city building initiative. With this line comes a tremendous opportunity to rethink and rebuild one of Toronto’s most important avenues.

    I have no doubt that this will happen over the coming years and decades. I mean, just look at the development activity taking place on St. Clair Avenue West right now, which you could argue is the result of its right-of-way streetcar line. But in this instance, what I’m specifically curious about is what will happen at each of the stations along Eglinton Avenue.

    If you take a look at the Stations and Stops page on the Crosstown website, you can see where all of the primary and secondary entrances will be and how each station will generally function. But what is not clear is whether we will be using this opportunity to build additional density on top of them.

    Here’s how they have “blocked out” the primary entrance for Avenue station:

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    I have no idea what it’ll become. But if it ends up as single-storey and single-purpose building, then I think we will have missed an opportunity. And the same goes for many, if not all, of the other stations along the Eglinton Crosstown line. Fixed rail is such a massive driver of real estate value, and so it seems silly not to take advantage of that in some way.

    If anyone has any insights into how these stations will or will not be developed, I would love to hear from you in the comment section below.

  • Who are you planning for?

    I just came across the following chart via City Clock:

    It came from a study that looked at 74 cities in terms of two measures: the percentage of people that travel by car and the traffic congestion levels within those cities.

    The way to read the chart is to first look at the red dots. Each dot represents one of the cities studied. The position of the red dot corresponds to that city’s congestion levels. So for example, if we were to take Toronto, the congestion level is 27%.

    If you then take that same dot and draw a vertical line to the top of the green shaded area, you get the percentage of people who travel by car. In the case of Toronto, it is 56%.

    What’s interesting about this chart is that as congestion levels rise, it forces people out of their cars. In other words, the cities with the highest congestion levels also have the lowest auto share percentages.

    But the other way I interpret this chart is that the decision is almost binary: you’re either planning for cars or you’re planning for people. Based on this data, it’s hard to have both.

  • The threat to big box retailing

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    Earlier this week, I was having a conversation with a number of smart real estate people about the future of retail in today’s internet and smartphone world. This, of course, isn’t a new topic. The industry has been discussing it for years. And while internet retailing still accounts for a relatively small percentage of overall retail sales (~10%), we all know that change is coming.

    One company that came up during our discussion was not surprisingly Amazon.com. But the initial comment was that they don’t make any money. Fortunately for me I had just gone through a presentation by venture capitalist Benedict Evans the night before called: Mobile is eating the world. And so I pulled out my phone and presented this slide:

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    The fact that Amazon operates with basically no net income is on purpose. Look at their revenue growth! So I wouldn’t dismiss them as being a fad. They may only account for 1% of all US retail sales today, but I’d put money on that percentage growing.

    The other reason I bring up Amazon is because, in some ways, I think of them as the online equivalent of a big box store. Just like a Walmart or Costco, where you can buy everything from tires to groceries to prescription drugs, I buy a lot of different things, besides just books, off of Amazon.com. You might do the same as well. And this is where I see the immediate threat to offline retailing and retail real estate: big box stores.

    In the second half of the 20th century, big box stores were incredibly disruptive to the retail landscape (and to cities). They used cheap land on the outskirts of cities, cheap buildings, and economies of scale to offer rock bottom prices to consumers. The value proposition was about cheap, not about differentiation. But as cheap as they may be, the internet can still do it cheaper.

    And retailers know this, which is why I think they all now sell groceries. Groceries have a very low online penetration. Basically everybody still buys groceries in-person. So if you offer that, you have a reason to draw people inside your store, where they will hopefully buy all the other stuff that they need. But as the online value proposition continues to get stronger, I think we’ll see many other, more significant, changes.

    Image: Flickr

  • In search of affordable housing

    Earlier this week I stumbled upon this entertaining article from the Guardian talking about how expensive housing is in London. The author’s tongue-in-cheek suggestion was to setup a new miniature London in the middle of nowhere where everyone could flock for affordable housing, but where many of London’s attributes could be exported: “We can all refuse to wear socks and sell each other overpriced cocktails in jam jars.”

    All joking aside, the article is yet another reminder that big global cities are expensive places to live. And in these cities, one of the most precious commodities is, quite simply, personal space. That’s why a garage in London can sell for £550,000 and why a 35 square foot storage cage in New York can sell for $75,000. 

    But affordable housing is not the reason why people want to live in places like London and New York. If it were, they wouldn’t be coming. Instead, they come for lifestyle, wealth creation, and the dating market – among other things. However, at a certain point, usually when they form families and start to need/want more space, they start looking around.

    Here’s an infographic via the Atlantic showing how relationship status impacts where people tend to live in London. The purple areas indicate an “above average concentration” of a particular relationship status. As you can see, single people tend to live in the core of the city, and when they get married, they move out to the periphery. Intuitively, this probably makes sense to you.

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    However, I’m always curious as to whether this trend happens more because of consumer preference (people don’t want to raise kids downtown) or because of economic necessity (they can’t afford anything beyond a shoe box apartment). Because if it is largely out of economic necessity (and the Guardian article would suggest it is), then we’re not creating the inclusive cities and neighborhoods that all city builders like to talk about.

    So how do we get better at this?

    In my view, and I’ve argued this before, the first step should be about improving supply. That is: get more housing built. And the way to start doing that is to make land available and improve the approvals process for new developments. In a recent McKinsey report, they referred to my first point as “unlocking land.”

    “Land cost often is the single biggest factor in improving the economics of affordable housing development. It is not uncommon for land costs to exceed 40 percent of total property prices, and in some large cities, land can be as much as 80 percent of property cost.”

    The reason this is important is because most big cities operate with massive supply deficits. There simply isn’t enough housing. And so if you can address that at a fundamental level, you can actually do a lot to start improving affordability.

  • The first summit on laneways

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    Last month I wrote about an upcoming city building event in Toronto called called Engaging In-Between Spaces. It’s being hosted by a non-profit group called The Laneway Project and it’s going to be this city’s “first summit on laneways.”

    While many people associate the potential of Toronto’s laneways with laneway housing, the focus of this event will be on laneways in a much broader context. Laneway housing will certainly be a part of it, but the event will also look at our laneways as public spaces, gathering spaces, and so on.

    I’m going to be giving a short presentation that looks at Toronto’s laneways from a real estate development perspective, and so I hope that you’ll be able to attend. The event is only $10 and the money will help support the group’s mission of transforming our laneways into vibrant, safe, and people-friendly spaces. 

    Click here to reserve your spot. And if you are attending, please tweet me so that we can connect at the event!

  • How Toronto voted

    In 2010, Toronto voted for its new mayor, Rob Ford, like so:

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    It was basically the core of the city (old Toronto) versus all of the boroughs. And it was perfect ammunition for anyone who believed that Toronto’s amalgamation was a mistake. (I personally don’t think it was.)

    Yesterday, Toronto did better.

    While we’re still a divided city — with Etobicoke and Scarborough largely remaining loyal to Ford Nation — we’re not quite as divided as we were 4 years ago:

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    However, there is one thing that Torontonians did largely agree on last night: the next mayor should be white and male. And this got the Guardian Cities out of the UK asking why one of the most multicultural cities on the planet (apparently we’re third behind Luxembourg City and Dubai), continues to elect middle-aged white guys.

    Now, I’m not a fan of the article. And I take offence to the way Toronto is portrayed. But it did get me thinking. And I thought it would be interesting to see how some of Toronto’s demographic data overlays on top of these election maps.

    Looking at 2006 census data (2011 isn’t available in map form yet), here is a map showing the total number of visible minorities broken down by census tract. The darker the red the more visible minorities.

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    And here is a map showing immigrants as a percentage of the population. Again, the darker the red, the higher the percentage.

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    What should be apparent from these maps is that Ford Nation is actually, in some ways, immigrant and visible minority nation. In the above map, the darkest red areas indicate that immigrants represent anywhere from 65-80% of the population. That’s a significant number.

    So why didn’t this group vote for the Hong Kong-born Olivia Chow? It’s because she wasn’t telling them the right story. Rob and Doug Ford, on the other hand, were.

  • It’s voting day in Toronto

    Today is municipal election day in Toronto.

    About 8 months ago I publicly announced here on ATC who I would be supporting, and my position hasn’t changed. I was disappointed by the fact that he ended up backing away from his initial promise of a true downtown relief subway line (see blog post), but I nonetheless continue to support his candidacy.

    In the words of Mike “Pinball” Clemons, he’s “the right man at the right time.” Click here if you can’t see the video below.

    [youtube https://www.youtube.com/watch?v=ouqv782giyw]

    But I’m not here to try and sway your vote. That is ultimately your decision. However, I am here to encourage you to get out and vote. Regardless of who you might be supporting, I think it’s important that you get out and take a position. So I hope you do that today.

    Happy Monday!

  • Comparing taxis to ride sharing services

    This morning I woke up to a post from venture capitalist Fred Wilson talking about the cost of loyalty when it comes to local transportation markets. More simply, it was a cost comparison between regular city taxis and ride sharing services such as a UberX, Lyft, and Sidecar in San Francisco, Los Angeles, and New York.

    The data was sourced from whatsthefare.com and looks like this:

    The way to understand this chart is to think about it as the answer to this question (from whatsthefare.com): If I were to take 1,000 rides over my lifetime with one individual service, how much more would I pay than if I compared prices and always picked the cheapest option?

    What you should immediately see is that regular taxis are far more expensive in San Francisco and Los Angeles compared to all of the ride sharing services. In the words of Fred Wilson: “That is crazy. They are going to go out of business in those markets with that pricing.”

    In my words: They are fucked.

    I wonder where Toronto would place against these cities. My gut tells me that we would be closer to San Francisco than New York. And if that is the case, I think you can figure out what that means.

    I thought this would be an interesting post given yesterday’s point about our cities being multi-modal. We urbanites have many more options at our disposal than we did only a few years ago. And if they’re cheaper and more convenient, we’re going to use them. I think that’s a good thing.

  • Riding the new streetcar

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    This afternoon I rode Toronto’s new streetcar for the first time on my way home from Chinatown. I had been meaning to do it for weeks now, but this was my first opportunity.

    The experience was infinitely better than what you get today on our current streetcars. I felt like I was in a new city. The proof-of-payment system makes onboarding much faster and the 4 loading doors means you just get on the train where there’s the most room – instead of getting on at the front and fighting your way to the back.

    The other thing I liked is that they now have a map of our streetcar network within the train (see above image). Toronto never used to do this. For whatever reason, we didn’t like mixing subway lines with streetcar lines on the same map. 

    But why be so pedantic?

    For one thing, our subway map looks pathetic without these additional streetcar lines on it. So for the sake of Torontonian morale, please fill it up with what you can.

    But the other reason why I think it’s important to include them is that we shouldn’t be thinking about our cities just in terms of specific technologies (subway, streetcar, and so on). Our cities are now multi-modal. Which means we navigate them using many different means, from subways and streetcars to bikes and Uber cars. What people care about is getting from A to B in the most efficient and enjoyable way possible.

    This may seem like a subtle distinction, but it’s an important one. And maybe, just maybe, these new maps will serve as an important reminder to us that there’s a lot of fixed rail in this city and that it could be far better optimized if we just tried a little harder.