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.

Subscribe

  • Is Chicago’s zoning code broken?

    This may sound crazy, but I’ve never been to Chicago. It’s on my list, but I just haven’t gotten around to it and I’ve never had a specific reason to go. Hopefully I can make it this summer.

    Lately though, I’ve found myself reading more and more about the city. Given that it’s also a Great Lakes city and it’s of comparable size, Chicago is an interesting case study for Toronto. But one thing that seems to keep coming up, is the need for zoning reform.

    About a month ago I wrote a post called “The tale of 2 Chicagos”, which was inspired by the blogging of Aaron Renn (The Urbanophile) and Daniel Hertz (City Notes). The discussion was around the prevalence of single-family zoning in most parts of Chicago and how it’s creating a supply constrained market (driving up prices).

    But there’s another outcome. Here’s what Daniel Hertz recently argued:

    When places in and around downtown become more desirable, developers build more housing, and more people get to live there. But when non-downtown neighborhoods become more desirable, developers can’t build more housing: it’s against the law. So instead, they profit by tearing down old two-flats and building mansions in their place. And as a result, fewer people get to live in those neighborhoods, even as more and more people want to.

    Effectively, his argument is that gentrification leads to a loss of housing units. Developers can’t build more housing, so they replace housing. And it all stems from a restrictive zoning code that aims to maintain the character and scale of established neighborhoods. I get that, but you could easily argue that it exacerbates the negatives of gentrification.

    It strikes me that Toronto and Chicago are in somewhat similar places in terms of their growth. Without any real natural barriers, both cities had the luxury of being able to develop through horizontal sprawl when they were younger.

    But with people now returning to city centers, we’re faced with a series of difficult decisions: How do we balance preservation and growth? How do we balance low-density with high-density? How do we maintain the character of what people love while still creating an inclusive city?

    It absolutely can be done, but it’s going to mean embracing a certain amount of change. And that’s not always an easy sell. 

  • This Built America: Shinola

    If you’ve been reading this blog since last year, you’ll know that I’m hugely interested in Detroit. I went for a visit last fall and I hope to go back sometime this summer. I think the city has tremendous potential and I would love to see it come back. I’m rooting for it.

    Between people like Dan Gilbert and consumer brands such as Shinola, there’s a palatable sense of momentum developing in the city. Here’s a short video of the Shinola story from This Built America–which is a project focused on the people and companies that are rebuilding America and its manufacturing base.

  • Target is coming to Toronto’s South Core

    Yesterday news broke that Target is opening a two-storey, 145,000 square foot store at the base of a new mixed-use development in Toronto’s emerging South Core neighborhood. The site is at the north east corner of York Street and Harbour Street. And the larger development, called Harbour Plaza, will include a 35 storey office tower and 2 residential condominium towers at 65 and 69 storeys.

    Here’s the location map:

    image

    And here’s the site looking east from York Street:

    image

    This is going to be huge for Target. The amount of current and proposed density within a short radius of the site is mind boggling. In addition to Harbour Plaza itself, look at what’s planned for 1 Yonge Street.

    Plus with Union Station next door, I dare you to try and find a better connected mobility hub in the region. Now all of a sudden that retail radius gets even bigger. I can easily imagine suburbanites picking up a few things before they hop on a GO train (our regional rail system) and head home.

    As of right now, they’re also the only game in town, as far as big box stores in the central core are concerned. But I wouldn’t be surprised if we see a competitor emerge alongside the 1 Yonge project. The site is big enough for one and Walmart isn’t going to want to get shut out of the area.

    My only hope is that, from an urban design standpoint, the project is able to enliven and give back to Harbour Street. Right now it’s an arterial road with really no redeeming urban qualities. But with the York Street off-ramp being relocated and the park underneath it being expanded, now is the time to really transform the area.

    Let’s hope Harbour Plaza does that.

  • Why the homeownership rate is higher in Mexico than in the US

    If you check out the “What I read” page that I recently added to Architect This City, you might notice a blog by Charlie Gardner called the Old Urbanist. I discovered it a few months ago (when he added ATC to his blog roll) and it’s good stuff.

    Last week he posted this interesting piece comparing homeownership rates and house sizes in both Mexico and the US. His finding is that there’s a fundamental mismatch in America in terms of the size of housing and the size of households. One and two person households now represent more than half of the market, and are on the rise, and yet 40% of houses in the US have 3 bedrooms.

    Because of this mismatch, he’s arguing that households are being poorly served by the US housing market and that it’s driving down homeownership levels. It currently sits around 65%, which is a drop from over 69% during the mid 2000s. Contrast this to Mexico, where there’s a greater number of one and two person households and the homeownership rate is 80%! Oh, and where only 6% of homes are financed using a mortgage.

    So what the Old Urbanist is suggesting is that we need to embrace smaller homes. He doesn’t explicitly say it, but he mentions the opportunity to redevelop laneways and alleys, which many of you will know I fully agree with. It’s a great post and I suggest you have a read if this topic interests you.

  • Just do it

    Growing up, I had one of the best English teachers around. He was the kind of English teacher who would dim the lights, light incense and play Bob Marley in the midst of class. He had also previously taught in Jamaica, which might help to explain this behaviour.

    I had him as a teacher in both elementary school and in high school. All in all, he probably taught me 3 or 4 years of English–excluding the fact that he was also the coach of my high school basketball team (which I was on).

    But more than just being a cool guy, he drilled a number of important takeaways and life lessons into his students. Still to do this day I remember and try and follow them. And I know that many of my classmates do the same. So today, I’d like to share 3 of them with you.

    1. Don’t say umm

    We all say “umm” from time to time to fill in our sentences when we can’t think fast enough or we don’t know what to say, but it sounds awful. It also makes you sound indecisive and less clear about the message you’re trying to get across. 

    If we ever said “umm” in class he would make us repeat our sentence again and again until we said it without saying “umm.” He would literally stand there saying: “Start again. Start again. Start again.”

    Similarly, he wouldn’t allow us to say “like”, unless we were using it to truly express that something had the same qualities as something else. But if you just said like for no reason, he would say: “Is it like that or is it that?” Again, it’s about being clear and precise in your language.

    2. Don’t use very

    By using adverbs such as very and extremely, you’re taking the easy way out. There’s always a better word or way to convey your message. Don’t say you’re very tired; say you’ve reached a point of debilitating exhaustion. Better yet, make up your own word (he never said that). Very is boring, lazy and uninventive.

    3. Just do it

    When we used to ask him how long he wanted our essays to be, he would always reply with the same thing: “As long as a piece of string.” And when we initially asked him how long a piece of string was, he would then say: “Just do it.” That was his message over and over again to us: when in doubt, just do it. We eventually stopped asking.

    At the time, I never really understood how profound this simple message was. Initially I thought he just wanted us to get on with things but, in fact, he was saying so much more. He was telling us to stop relying on others for direction. Stop following orders, and take initiative. Just do it. Poke the box, dammit.

    I’ve had this post sitting in my draft folder for a few months now. I don’t often deviate from city related topics, but I wanted to put this one out there. So if you’re reading this Mr. Mott-Trille, umm, like, thanks so very much! 🙂

  • The hard thing about urban debt

    I’m in the midst of reading Ben Horowitz’s new book called “The Hard Thing About Hard Things.” You may have noticed all of the random quotes I’m posting over on my tumblog. It’s good stuff.

    At one point, he talks about two types of metaphorical debt: technical debt and management debt. Technical debt is when you write shitty (computer) code that addresses the short-term, but eventually needs to be rewritten in the future. Similarly, management debt is when you make bad and short-term management decisions that don’t serve you well in the longer term. In both cases, the debt compounds and, when you eventually pay for it, it’s got a lot of interest on it.

    This got me thinking: Is there an equivalent for cities? Is there such a thing as urban debt? I figured there must be since we’re an impatient society obsessed with instant gratification.

    I then remembered a great quote that I saw either on Twitter or Tumblr that I think can be credited to Lewis Mumford:

    Adding highway lanes to deal with traffic congestion is like loosening your belt to cure obesity.

    Neither solution is sustainable and eventually you’re going to have to pay the consequences. In the case of cities, I think the answer is transit.

    And transit (disinvestment) is actually a really good example of what might be considered urban debt, because it requires long term planning—something that often conflicts with our political system. Politicians want quick wins.

    But I think it’s important to keep in mind that when we fail to make the hard decisions today, they only become more costly to deal with tomorrow. Quick wins might make for good politics, but they often don’t make for great city building. 

  • Best predictor of a city’s growth is its average January temperature

    With the cold winter that we’ve had in Toronto this year I’m going to be honest and say that I’ve, on occasion, wondered why I haven’t moved somewhere warmer. There aren’t any great mountains nearby, so it’s not like I’m putting up with this cold in order to feed my love of snowboarding.

    Then yesterday, I was reading The Urbanophile blog and I was reminded of a fascinating finding from Edward Glaeser’s book, Triumph of the City: climate matters when it comes to cities and prosperity.

    In fact (from New York Magazine):

    The single variable that best predicts a U.S. city’s growth over the past century is its average January temperature. Hence the decline of many northern and midwestern cities and the boom in the South and the Sun Belt, where the Phoenix, Atlanta, Houston, and Dallas metropolitan areas have each gained a million people since 2000. For every five degrees that a city’s January temperatures top the national average, Glaeser writes, its real-estate prices will beat the national mean by 3 percent, thanks to the increased demand.

    But not all cold places are bleeding people. New York isn’t. And neither is Toronto. The Toronto area accepts roughly 100,000 new people every year. We have more cranes up in the air than any other city in North America. But it’s cold as all hell here. So what gives?

    As the New York Magazine article (cited above) points out, New York essentially offers enough benefits to offset its cold winters. There are enough amenities and economic opportunities to make people put up with the bad. And we’re not just talking about weather.

    A lot global cities–New York, London and so on–are crowded, expensive and somewhat impractical places to live. But they continue to attract and retain people in droves, which is a nice tie in to yesterday’s post about urban renewal and the importance of lifestyle.

    People will put up with a lot if your city is an otherwise awesome place to live.

  • Civic leaders, here’s why people need to love your city

    I was planning to write about something else today, but then I saw Fred Wilson’s post on revitalizing urban cores and I had to switch topics, because I think he makes a great point about turning around declining cities:

    I’ve been asked by civic leaders from places like Newark, Cleveland, Buffalo, and a number of other upstate NYC cities that have suffered a similar fate how they can do the same thing. They all talk about tax incentives, connecting with local research universities, and providing startup capital. And I tell them that they are focusing on the wrong thing.

    You have to lead with lifestyle. If you can’t make your city a place where the young mobile talent leaving college or grad school wants to go to start their career, meet someone, and build a life, all that other stuff doesn’t matter.

    It’s exactly the same point I made in my post entrepreneurship as economic development strategy. You can throw as much money as you’d like at startups, but if young people don’t want to live in your city then you have a serious problem.

    Fred goes on to talk about Tony Hsieh’s (founder of Zappos) initiatives in downtown Las Vegas:

    When Tony moved Zappos from the suburbs to the former City Hall in downtown Vegas a few years ago, he decided to invest $350mm in a massive urban revitalization project. He set aside $200mm to purchase land at bargain prices and the other $150mm to invest in three areas, arts and culture, small businesses (restaurants, cafes, bars, markets, boutiques, etc), and tech startups. $50mm is going into each area.

    It’s an example of leading with lifestyle, urbanism and city building, rather than purely economics. And I think it’s the way to go. But to be clear, I’m not suggesting that the focus should be on large capital projects, such as stadiums and infrastructure. I’m not convinced those are the most effective catalysts. There’s no silver bullet here.

    Instead, I think the answer is in building, from the ground up, a real sense of community and place. People need to love your city. That’s easier said than done though.

  • A first look at Toronto’s Development Permit System

    Yesterday, Toronto’s Chief Planner, Jennifer Keesmaat, tweeted out a link to this primer on the proposed Development Permit System (DPS) here in the city. The entire initiative is being branded as ResetTO. And it’s intended to convey that the DPS is really about starting again with the same set of planning principles we already use.

    The big shift is going from a site-by-site approach to a neighborhood approach. Today, each and every development site is reviewed, approved and fought over. With the DPS, the idea is to establish a neighborhood scaled by-law and then streamline the review process for each individual site (the city will get 45 days to respond to applications as opposed to the 180 days it gets today).

    What this should do is shift the big fights–among developers, communities and the city–to the front end (when the neighborhood by-law is being established) and minimize the fights over each site. It takes away an element of incremental urbanism–because you’re in some ways building out a master vision (large batch versus small batch)–but it would do a lot for transparency, efficiency and for creating cohesive urban form. And, it sounds like the DPS by-laws will have some flexibility, so that could address my batch size concern.

    Communities don’t seem to like this approach because it takes away their ability to appeal each individual application, but it will undoubtedly speed up the the development process, which I’ve argued many times before is critical to maintaining an affordable and healthy city.

    Right now the city is hosting open houses and is expected to issue a report on their public consultations sometime next month. It’ll then go to City Council in July. I think a lot will come down to how the DPS neighborhood by-laws are formed, but I think that anything that improves transparency and efficiency is likely a good thing for our cities.

  • How ethical is the trailer park business?

    When I was in grad school at Penn, real estate mogul Sam Zell used to come in and talk to students about once or twice every year. He permanently endowed the Samuel Zell and Robert Lurie Real Estate Center at the school and so there was a strong connection.

    Because of Zell, a few of us developed a theory that the entertainment value of a talk was more or less correlated with net worth. In other words, the richer the speaker, the funnier the talk. Zell, for example, would often come in jeans, a baseball hat and a hawaiian-like shirt, and drop f-bombs all throughout his talks. You can do that sort of thing when you’re worth a few billion and you’re signing the checks.

    But beyond just being entertaining, Zell shared a lot of insights about the businesses he was in, getting into (Chicago Tribune) and getting out of (Equity Office Properties). Some of those businesses turned out to be a disaster (Chicago Tribune), but others (Equity Office Properties), made him look like an absolute genius.

    One business that he always liked to mention though, was the manufactured home business–also known as the trailer park business. And that’s because, as chairman of Equity LifeStyle Properties, Zell is the largest mobile-home landlord in the US. They control 140,000 sites across 32 states and in British Columbia, Canada.

    The reason Zell likes this business is, quite simply, because it makes a lot of money and it’s growing. There are an estimated 12 million Americans living in trailer parks. That’s probably why Warren Buffet also bought Clayton Homes–another manufactured home builder–for $1.7 billion in 2003.

    But it’s not just the big guys who like this business, it’s entrepreneurs at all levels. In fact, I was just reading this article from New York Times Magazine about a couple of entrepreneurs who actually setup a school called Mobile Home University. The objective is to train aspiring entrepreneurs on how to profit from poor people in America:

    “The bottom line is Americans as a group are getting poorer,” he told his students — and while that’s bad news for those living on the economic fringes, it also means opportunities for those willing to take advantage of the trend.

    Just how poor? Here are typical rents:

    The typical tenant who rents from Rolfe and Reynolds pays $250 or $300 a month in lot rent and another $200 or $300 if also renting a trailer. “The trailer park is people’s last choice,” Rolfe says, “and we recognize that.”

    Now, trailer parks are not the sort of thing that architects and planners typically like to talk about it. They’re not sexy. They’re not urban. But as the article says, these guys are providing the “dollar store” of housing and making a lot of money doing it (annual returns of approximately 25%).

    But is targeting people with rock bottom credit ratings and no other housing options an ethical business model? (The article also talks about 10% a year rent increases.) I’ve personally always found these ethical questions to be difficult to take a stance on and so, for this one, I’m going to put it out to the ATC community. What do you think?