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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  • Transportation geography of the Toronto region

    April 16, 2025 · View original

    Every five years, the Greater Golden Horseshoe Area (of southern Ontario) conducts something called a Transportation Tomorrow Survey. And I am told that it is the most comprehensive travel survey conducted anywhere in the world. So let’s look at some of the data. The last survey was completed in 2022 and a mapping of the data was prepared by the School of Cities at the University of Toronto.

    Population density:

    Percentage of trips by walking:

    Percentage of trips by bicycle:

    Percentage of trips by public transit:

    Percentage of trips by car:

    Percentage of residents with a driver’s license:

    Percentage of households without a car:

    Average trips by distance:

    Once again, these maps remind us that the starkest contrast is between active and non-active forms of mobility. In other words, we have a central core where many, and sometimes most people (>50%) walk to where they need to go, and then there’s absolutely everywhere else in the region where most people drive (>50%) and, in some cases, where people drive almost exclusively (>90%). Public transit ridership is more dispersed, but it’s really only dominant in Toronto, and not in any of the suburbs.

    Perhaps the only reasonably uniform finding is that average trip distances tend to be relatively short (<10 km) no matter where you live.

    Maps from the School of Cities at the University of Toronto; cover photo by Juan Rojas on Unsplash

  • US office market was showing signs of recovery until the tariffs arrived

    April 15, 2025 · View original

    According to the WSJ, the US office market saw a significant increase in leasing activity in the first quarter of this year. Approximately 115 million square feet of space was leased, which represents a 13% increase from the previous quarter and the highest level since before the pandemic in mid-2019.

    But then, tariffs for everybody! Now tenants are worried that a recession is coming, inflation is going to rise, and that so too will interest rates. Uncertainty is bad for business.

    Here’s where things broadly sit as of the beginning of this year:

    – The national office vacancy rate was 19.7% at the end of February 2025 – San Francisco had the highest vacancy at 27.8% – $7 billion worth of office sales were recorded in the first two months of the year and the average price was $177 per square foot – The cheapest markets are/were in the midwest with Minneapolis-Saint Paul recording the lowest average sale price of $50 per square foot (versus $215 psf a year ago) – Chicago averaged $67 psf – The most expensive markets were places like San Diego ($662 psf), Manhattan ($450 psf), San Francisco ($282 psf), Miami ($239 psf), and Los Angeles ($207 psf) — we continue to see a flight to quality

    Maybe things will get better later this year, or maybe they won’t. It’s impossible to know what comes next in this trade war.

    Cover photo by Delia Little on Unsplash

  • From urban sprawl to a real city

    April 14, 2025 · View original

    Urban sprawl is how much of the US provides new housing. And here’s Conor Dougherty in the New York Times arguing that America needs more of it to fix its housing shortage:

    > Even if all the regulatory restraints were removed tomorrow, developers couldn’t find enough land to satisfy America’s housing needs inside established areas. Consequently, much of the nation’s housing growth has moved to states in the South and Southwest, where a surplus of open land and willingness to sprawl has turned the Sun Belt into a kind of national sponge that sops up housing demand from higher-cost cities. The largest metro areas there have about 20 percent of the nation’s population, but over the past five years they have built 42 percent of the nation’s new single-family homes, according to a recent report by Cullum Clark, an economist at the George W. Bush Institute, a research center in Dallas.

    The obvious benefit is that the resulting housing tends to be cheap. The above article is filled with examples of people buying large homes for a few hundred thousand dollars in newly formed communities across Texas. And if you live in a high-cost city, the social algorithms have almost certainly found you at some point with a shockingly cheap house in one of these places. But, Dougherty also admits that sometimes this may be the only redeeming quality:

    > Escobar told me he moved to Princeton because he could find a big house there for less than $300,000, but now the city is home, and he didn’t like where it was headed. Over the next four years, he said, his goal is to redevelop the downtown, try to attract offices where locals can work and build out a park system that voters recently funded with a bond measure. “You ask anybody what they love about Princeton, and it’s simply just the affordability,” Escobar told me. “We need to be more than that.”

    According to the article, this isn’t necessarily a problem, because it’s just how cities are built in this day and age. What you do is start with low-cost housing in fringe locations. You grow as quickly as possible until traffic becomes “godawful” and vital infrastructure can’t keep up. Then you implement moratoriums on new housing, and start working on other uses like, you know, employment. Eventually, after all this chaos is complete, you end up with something that possibly resembles a real city.

    Yeah, I don’t know, this seems like a roundabout way of getting to where you want to go. Why not build and plan for something with a high quality of life right from the start?

    Cover photo by Leon Hitchens on Unsplash

  • Global electricity production by source

    April 13, 2025 · View original

    I never used to listen to very many podcasts. But lately I’ve started doing it while heading to/from meetings, either in the car or on the train. This past week I listened to a Bankless podcast talking about crypto and AI, and one of the arguments that was made was that it’s probably a safe bet to assume that we’re going to need dramatically more compute and electricity in the future.

    This seems obvious enough. If you recall, there’s no such thing as a wealthy, low-energy nation. If you’re a wealthy country, you consume a lot of energy. And that’s why Build Canada recently argued that we need a kind of energy revolution. By 2050, it’s likely Canada will have 2-3x the electricity demand that we have today. So today I thought I would share a few related charts.

    Here’s electricity production by source across the world. Coal dominates.

    Looking at renewables more closely, we again see that wind and solar are making a run for it. And if you consider that solar is one of the fastest growing energy sources, it’s not inconceivable that it will start to become a more dominant source in the near term. In the US, solar PV projects make up the largest share of new planned generation capacity.

    But the US is not winning this race today. Right now it’s China. (Chart below sourced from here.) They have the largest cumulative solar capacity, followed by the EU, and then the US. That said, coal still forms a dominant part of China’s energy mix, and the country continues to construct coal-fired power plants to meet its short-term energy needs.

    It’s unfortunate that Canada is not on this list. That needs to change.

    Cover photo by Benjamin Jopen on Unsplash

  • Impact of foreign buyer restrictions

    April 12, 2025 · View original

    Banning foreigners from buying real estate tends to be popular policy.

    In a recent public opinion survey conducted in British Columbia, 77% of respondents said they approve of the provincial foreign buyer tax increasing from 15 to 20%, and 75% said they agree with the federal government’s temporary ban on foreign buyers. This is consistent with what I’d expect. But for obvious reasons, the development industry doesn’t like these policies.

    Foreign-buyer bans are a demand-side measure. Meaning, they are intended to ease home prices by reducing demand. The development industry doesn’t like this because low demand is bad when you’re trying to build things. A better scenario is something involving high demand and high supply, which is why supply-side measures tend to be more popular with industry. Even though there’s always the risk of overbuilding.

    But it’s pretty hard to argue that more supply will help to lower home prices and then not argue the same with reduced demand via the banning of certain buyers. Both levers should, in theory, have an impact, even if the former is suboptimal for builders. That said, there remains the important question of whether there’s enough foreign demand for a foreign-buyer ban to actually have an impact or whether it’s just political theater.

    Anecdotally, I can tell you that we have not typically seen a lot of foreign buyers in our pre-construction condominium projects. The deposit structure we use is different for non-Canadians and it tends to be a very very small percentage of buyers. But for resales in markets like Vancouver, the numbers do seem to be higher, at least based on some historical data.

    According to this recent research paper, once BC started tracking the nationality of buyers in June 2016, they discovered that in the 5-week period that immediately followed, about $885 million was spent by foreigners in the Greater Vancouver Area and that they represented about 10% of all sales. It was also discovered that of these foreign buyers, about 90% of them were from China.

    This data was so impactful to policy makers that it is allegedly what led to BC’s foreign buyer tax in August 2016. And since then, there’s further data to suggest that it has worked to temper home prices. Here’s a chart from the same research paper:

    As a developer and proponent of open markets, I don’t love this policy. It’s a form of protectionism that discourages or flat-out blocks this kind of foreign investment from entering the country. I also worry that it can be a crutch or excuse not to expand the overall housing supply of a market. But this is seemingly not how many or most voters feel. And I can certainly appreciate why that would be the case.

    Cover photo by Alejandro Luengo on Unsplash

  • Austin legalizes single-stair apartment buildings up to 5 storeys

    April 11, 2025 · View original

    Yesterday, Austin City Council voted 10-1 in favor of a building code amendment that will allow single-stair apartment buildings up to five storeys and with 4 homes per floor. This is progress. Austin now joins Seattle, New York, and possibly other US cities in allowing this building type, which is a type that is widespread outside of North America. Paris, for instance, allows single-stair buildings up to 50m.

    In all of these newly allowable cases, there’s usually a requirement to sprinkler the building and cap the number of homes per floor, among other life safety requirements. What I’m not clear on, though, is how flexible these new codes are in allowing larger apartment buildings.

    In my opinion, it’s better (and hopefully more accurate) to think about unit maximums on a per stair basis as opposed to a per floor basis. Because that’s how you create larger point-access block buildings: you cluster multiple blocks together, each with its own exit stair. Is that allowed in these building codes? I’m not exactly sure, but one would hope.

    Regardless of this important detail, I continue to be impressed by Austin’s willingness to drive positive change in its housing market. It makes you wonder: What the hell is taking Toronto so long? Single-stair buildings up to 6 storeys should already be permissible. We should be leading.

    Cover photo by Clark Van Der Beken on Unsplash

  • The more you give, the more you get

    April 10, 2025 · View original

    Just in case you’re looking for an opportunity to read some more about tariffs, Howard Marks has a new memo out titled “Nobody Knows (Yet Again).” In it, he talks about comparative advantage, how global trade has benefited Americans, and what this could mean for the future.

    Here’s an excerpt that I found interesting specifically because I’ve also been thinking about the parallels with Brexit:

    > I consider the tariff developments thus far to be what soccer fans call an “own goal” – a goal scored for the other side when a player accidentally puts the ball into his own team’s net. In this way, they’re highly analogous to Brexit, and we know how that turned out. Brexit cost the British mightily in terms of GDP, morale, and alliances, and it harmed their reputation for governance and stability. All of this damage was self-inflicted.

    In the memo, he also provides an important history lesson:

    > To cite one more factor that has made the world a better place, I describe the behavior of the U.S. in the post-World War II period as “generosity toward the rest of the world stemming from enlightened self-interest.” Under the Marshall Plan, we gave (not loaned) billions of dollars with which Western Europe rebuilt. Likewise, between 1945 and 1952, General Douglas MacArthur oversaw the reconstruction of Japan and the strengthening of its economy. Since then, the U.S. has (a) distributed extensive foreign aid, (b) invested heavily in healthcare in developing nations, (c) created programs that bring foreign students to the U.S. and vice versa, and (d) beamed positive messages to people throughout the world. These are all instances of generosity. In each “transaction,” we gave more than we directly got, and a cynic might say we acted like suckers. > > Yes, these things can be described as largesse, but as the National Archive puts it, the Marshall Plan “provided markets for American goods, created reliable trading partners, and supported the development of stable democratic governments in Western Europe.” That’s a pretty good payoff. People in other countries received lots of freebies, but certainly these programs helped the U.S. by restraining communism, bringing nations into defensive alignment with the U.S., and contributing to the U.S.’s position as the world’s most prosperous nation. I have no interest in seeing the U.S. turn isolationist.

    Unfortunately, greater isolation will almost certainly be one of the consequences of Trump’s tariffs. It doesn’t matter that many of them have now been paused; the damage has been done. We’ve seen this spastic movie before. In fact, they could all go to zero tomorrow, and there would still be damage.

    This is an enormous change to the world order.

    Cover photo by taro ohtani on Unsplash

  • Make Toronto a 24-hour city

    April 9, 2025 · View original

    Reece Martin is perhaps best known for his YouTube channel focused on transit. He has over 330,000 subscribers, and I have mentioned him a few times over the years on this blog. But he has since retired from YouTube and he now has a new blog called “Next Toronto,” which you should all subscribe to. I just did that today.

    In his latest post, he makes “the case for a 24-hour Toronto” and compares our city to various other global cities around the world including New York and Tokyo. This post really resonates with me and I agree with his view that there’s something quintessentially urban about things being open all the time, or at the very least open late.

    According to ChatGPT, Toronto is a “semi 24-hour city.” Its deficiencies:

    Here’s how I generally think about it.

    Step 1 is reasonable daytime hours. As a North American, I still find it frustrating how some/many restaurants in Europe close between lunch and dinner. Call me spoiled, but what if I got held up at work and couldn’t eat during the generally accepted time? Or if I went to the gym in the morning and now I suddenly have a dire caloric deficit?

    Step 2 is staying open kind of late, including on Sundays. A few weeks ago I was driving around the suburbs of Toronto — on a Sunday — and I decided to take advantage of this rare occurrence to stop in at what’s called an enclosed shopping mall. So I got all the way there, pulled confidently on one of the front doors, and then realized it had closed 2 hours ago.

    Step 3 is the rarified big leagues; you’re a “24-hour city.” Reece gives the example of Apple’s Fifth Avenue store, which, in case you forgot, never closes. I don’t typically shop for consumer electronics at 3AM, but I might. And there’s something oddly comforting about knowing I could. This isn’t possible in all cities, but it is in New York. That says something.

    Cover photo by Jan Weber on Unsplash

  • Introducing: Global City Builders

    April 8, 2025 · View original

    This week, Globizen announced a new journal series called Global City Builders. The idea is pretty simple. It’s about having conversations with city builders from around the world who are working to create better places. This obviously includes people like architects and developers, but it might also include artists, local entrepreneurs, activists, and countless other change agents. The format is a simple Q&A and for this first one we spoke with Paris-based Avenier Cornejo architectes and its two founders: Christelle Avenier and Miguel Cornejo. Here’s the link. I hope you enjoy it.

    If you or someone you know would like to connect with us about future editions of Global City Builders, feel free to reach out to [hello@globizen.com](mailto:hello@globizen.com).

    Cover photo by Charly Broyez via Avenier Cornejo

  • Environmental site contamination primer for developers

    April 7, 2025 · View original

    One thing that you need to do in Ontario if you are converting a development site to a more sensitive land use — so for example, taking a commercial site and converting it to residential — is file what’s called a Record of Site Condition (RSC) with the Ministry of the Environment, Conservation and Parks (MECP). This is an important risk consideration because it’s complicated, expensive, and it typically takes a long time; meaning it can delay an entire project or make it infeasible all together.

    At a high level, here some things you should consider as a developer (though please keep in mind that I am not an environmental engineer and that you should obviously seek professional advice when dealing with environmental matters). If the site is clean and free from environmental contaminants, then the process is relatively straightforward. Complete your environmental investigations (i.e. drill boreholes) and then submit all your findings to the Ministry. Filing an RSC, in this scenario, should be fairly low risk.

    Soil and groundwater contamination

    However, things get a lot more complicated if you have environmental contamination, which is most often the case with urban sites. Developers usually assume a site is contaminated until proven otherwise. When you have contamination it can occur in two ways. You can have soil contamination and/or you can have groundwater contamination. The latter is worse for at least two reasons: (1) water, as you know, moves around and so it’s harder to delineate and clean up and (2) it can expose you to additional liability if it’s migrating off-site.

    Point number two can be a serious risk and there’s lots of case law out there that will tell you that. If you think you might be in this situation, you definitely want to do your homework and get some sound advice. But for the purposes of this post, you should just know that soil contamination is easier to deal with than groundwater contamination.

    Two main approaches

    Once you’ve established that you have a contaminated site and you know the actual contaminants and their concentrations, there are generally two main paths you can choose to ultimately reach a point where you can file an RSC with the Ministry. One, you can remediate the site, which means removing the contamination by physically taking it off site, doing injections, or by some other means. Or two, you can do what’s called a “Risk Assessment.”

    Option 1 – Remediation

    This option is more challenging if you have groundwater contamination because it’s harder to be confident that you’ll be able to get it all. So oftentimes groundwater contamination will lead you toward option number two below. But if all you’re dealing with is contaminated soil and you feel confident in your delineation (i.e. you’ve determined the extents of it), then it’s fairly common to just remediate it during construction. And if you’re building something like underground parking anyway, it often makes sense to do exactly this. Industry people call this a “dig and dump” approach.

    However, there are cost and schedule impacts associated with this approach. Removing and disposing of contaminated soil costs money — there’s a premium. So a typical approach is to test the soil as you’re excavating it to determine what’s clean and what’s contaminated. This process of stock piling and testing requires addiitional effort, but without it you’d have to assume that 100% of the soil you’re excavating is contaminated and that’s often a more expensive proposition. Regardless of your exact remediation approach, you will need to budget both time and money.

    Option 2 – Risk Assessment

    The simplest way to understand a risk assessment is that it’s a way of saying, “we all acknowledge that this site is contaminated and that we’re not going to clean it up, but we’ve accurately assessed all the environmental risks and, if necessary, we will implement appropriate risk management measures.” Again, this approach can be useful if you have groundwater contamination or there’s some other reason why it’s not reasonable or feasible to simply remediate the site. Maybe you don’t need or want to excavate and so this would be a significant incremental cost.

    Now, there are different streams of Risk Assessments. Some take longer than others. But on challenging sites, it would not be unheard of for the process to take between 2-3 years, and sometimes even longer. This can cause significant delays to a project, especially in municipalities where they maybe aren’t as accustomed to dealing with contaminated infill sites and they haven’t gotten their head around things like conditional building permits. (Conditional building permits can allow a project to continue moving forward while a developer works to file their RSC, among other requirements.)

    Barrier to new housing

    Finally, I would like to highlight the barrier that the above processes represent for the delivery of new housing. This is especially true as Toronto and other cities work to encourage more infill housing. Small projects with little or no parking (i.e. no undergrounds) are challenging and expensive to remediate because there’s usually no planned excavation. At the same time, these projects don’t have the luxury of waiting around for 2-3 years while a Risk Assessment works its way through the Ministry. The entire project timeline might be shorter than this.

    Obviously human safety is paramount. That should never change. But I feel strongly that we’re going to need to find ways to streamline the environmental approvals for new housing. Otherwise we’ll continue to restrict large portions of our cities from becoming new homes. The requirement to file an RSC could alone kill the feasibility of a small-scale housing project. And that’s why it was one of the points in my recent post about “how to improve the feasibility of infill housing.”

    Once again, I will remind all of you that I am not an environmental engineer, or an environmental lawyer, or anyone besides a generalist developer. Though I have had to deal with this process on virtually every site I’ve ever worked on. It’s complicated and every site is unique — so as a developer, it’s important to do your own homework. This post is simply intended as a basic environmental primer for developers, and as a way to further highlight one of the many barriers to new infill housing.

    Cover photo by Anastasia Meraki on Unsplash