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.
As a follow-up to last week’s post about giving free land to the City of Toronto, I am now thrilled to report that, today at 12:14 PM, we received our building permit!
Some of you were keen to hear about what happened following the post. So here’s the update. I published the original post last Wednesday. And to be honest, it received far more attention than I was expecting.
On Thursday morning I received a call from the city. They weren’t thrilled about my post, but were very helpful and said that they would ensure the conveyance happened immediately. It then got done before noon that same day.
Planning then sent a note to buildings saying that the permit was ready for issuance. Yay. Buildings acknowledged that they were working on it, and on Monday of this week we received a summary of the outstanding fees and the instructions for the wire transfer.
We paid the fees immediately and on Tuesday we received a payment receipt from the city. Then today — Wednesday — we received the building permit. So it was exactly one week from post to permit. A big thanks to everyone who helped to finally move this forward.
Hopefully it’s clear that last week’s post came strictly from a place of prolonged frustration. I wasn’t trying to be mean. Our lawyer reminded me, after the post, that we’ve actually been working on this land conveyance for over 2 years.
Construction is risky. For example, last month a tree fell on top of Parkview Mountain House. The tree was located upgradient from the house and, it was so big, that pieces of it actually landed across the street on our neighbor’s property.
Thankfully, it didn’t cause as much damage as it could have. It punctured the roof in a few places, but magically, the bay window that it landed on was perfectly fine. We also opened up the drywall around the window to inspect all of the structure.
Needless to say, we didn’t have a line item in our budget for “trees that might fall on the house during construction.” We also didn’t have a line item to take down more trees behind the house, which is exactly what we decided to do after this happened. We called an arborist and asked them to fall anything that looked even remotely questionable. That ended up being 4 more trees.
We were not expecting this.
But this is why budgets have something called a construction contingency (although, we still have enough savings from some of our other contracts not to have to use it). In the end, we also learned something. If a tree falls in a forest and no one is around to hear it, the answer is — yes — it can still cost you a lot of money.
Development charges are a topic that is near and dear to this blog.
In theory, development charges are supposed to be “growth paying for growth.” In other words, they are intended to pay for the incremental services and infrastructure required strictly because of new development. This, of course, sounds right. More people will equal more demand on city services.
However, development charges also increase the cost of new homes and there is a growing concern that development charges now pay for more than they should. Meaning, they have become a “housing tax”, which is more or less the opposite of what you want if you think there’s a shortage of new homes.
Part of the challenge, I think, is that city budgets are complicated. As far as I know, it’s largely impossible for the average person to try and figure out which municipal costs are associated with growth and which are associated with ongoing operations (i.e. they should be paid for through things like property taxes).
That said, I think this current market environment could create a bit of a litmus test for development charges. As most of you know, new home sales in Toronto have fallen to levels not seen since the global financial crisis and the early 90s.
This means that construction activity has now also fallen and that, in turn, fewer developers are paying development charges. I haven’t seen the exact numbers, but intuitively the drop in development charges paid should be precipitous.
Now, if these charges are strictly paying for growth, then in theory, cities should be completely agnostic to this decline. Sure, they’re collecting less revenue, but they also don’t have the new growth. Any growth that is still in the pipeline (i.e. under construction) would have already paid for their impacts.
However, if this is not the case, and municipal budgets start getting negatively impacted by this drop in development charge revenue, then it suggests that one of two things could be going on.
Either development charges aren’t enough to cover the true cost of growth and the whole thing is a bit of a Ponzi scheme. That is, we need a constant flow of new developments to pay for the shortfalls of the last. Or, we’re overtaxing new homebuyers for the benefit of incumbent ratepayers.
I’m sure it’s more complicated than I’m making it seem right now. But this is the crux of this debate: Are we equitably levying development charges on new homes? This current market could offer a clue. If cities start running out of money, it might suggest the answer is no.
A big congratulations to Veronica and Pearce Jarvis on their wedding this weekend in Niagara-on-the-Lake. Thank you for including us in your special day.
Photos taken in the Niagara Benchlands (The Bench) on June 1, 2024 with a Fujifilm X-T3 (23mm).
This is a shocking report from Smart Growth America on traffic fatalities in the US. Since 2010, the number of pedestrians struck and killed has increased by almost 75%. As of 2022, this number sat at just over 7,500 fatalities per year:
Here are also the top 20 most deadly metro areas:
Not surprisingly, these hot spots tend to be in the south, as opposed to in older northern cities. And that’s because these tend to be car-oriented places. As the name of the report suggests, they are “dangerous by design.” If you optimize for cars, it means you’re making trade-offs in other places.
On this blog, we often talk about city building in the context of doing things to help improve a city — whether that be a development project, a new public art mural, or an interesting local business. These interventions help to build a city. But even more specifically, the term has, for many, come to mean building up a city in a positive way.
But there is another way to think about city building. You can think of it in terms of building actual new cities. We’ve spoken about some of these before, namely this one in California and this odd one in Saudi Arabia. But apparently it is becoming more common. According to The Economist, the world is now building more new cities than it has in the last 80 or so years:
Egypt’s “New Administrative Capital” is part of a rush of city-building. Firms and governments are planning more settlements than at any time in the post-war period, with many already under construction. Ninety-one cities have been announced in the past decade, with 15 in the past year alone. In addition to its new capital in the north, Egypt is building five other cities, with plans for dozens more. India is considering eight urban hubs. Outside Baghdad, Iraq, workers have just broken ground on the first of five settlements.
In some cases, it is being done as a solution to urban congestion. If this city is too expensive and unaffordable, just create a new one. This appears to be part of the idea with the above city outside of San Francisco. Of course, new cities can also be created for ideological reasons, or for political purposes, which was the case with Brazil’s capital city, Brasilia.
Here, the idea was to move the federal capital away from the country’s populated southeast region to a more geographically neutral location in the middle of the country. It also turns out that seeding a new city with government institutions is a good way to get one of these started. Existing cities do, after all, benefit from network effects.
History points to characteristics shared by successful projects. State institutions can help anchor cities, as Brasília (in Brazil) and Chandigarh (in India) showed in the 20th century. Although both have had problems, people in Brazil and India are voting with their feet. Brasília’s population is growing at 1.2% a year, more than double the national average. Chandigarh, a state capital, is now India’s fourth-richest region on a per-person basis.
But putting money, ego, and ideology aside, when does it actually make sense to start a new city in lieu of just expanding (or addressing the problems in) the one(s) you’ve already got? Population size can’t be the only factor in determining whether a city is “full”, because Tokyo seems to do just fine as the largest metropolitan area in the world.
If it hasn’t already been done, I think this would make for an interesting research project. Until then, there’s this (paywalled) Economist article.
This is an aerial photo of the construction site at One Delisle:
Currently, we are on hold and waiting to pour a number of columns on the ground floor because the city has not yet issued our above-grade building permit. And the reason the city has not issued our above-grade building permit is because we have not yet conveyed our parkland dedication land to the city. Frustratingly though, we have been ready to convey this land for over a year! We simply need the city to allow us to give them this free land. To date, we have meticulously documented at least 3-pages of follow-ups and back-and-forth emails as we try our best to do this.
I’ve been doing this long enough that this isn’t surprising or unusual. But it remains deeply maddening. Younger people on the team can’t believe that this is par for the course. On top of this, the city continues to charge interest on the fees that are payable upon issuance of the first above-grade building permit. The result is an insane dynamic where the city can delay things as long as it wants and then charge us, and all other developers, interest on its own delays! I mean, is it any wonder that housing keeps getting more expensive in this city?
During the last mayoral election, some candidates were quick to promise that, if elected, the city itself would start building affordable housing. This, I’m sure, sounded good to most. Toronto needs more affordable homes. But for all of us involved in the building of buildings, it was frankly impossible to imagine. If the city takes this long to accept free land from developers, how could it possibly build anything?
Studio Libeskind has a recently completed project in Brooklyn that looks like it was designed by Studio Libeskind. It has angled facades and, judging by the comments on Dezeen, its design is polarizing. But it is an affordable housing project for seniors, and it does have a large atrium in the middle of it.
Atria are a bit of a unique feature in multi-family housing (at least in this part of the world). For better or for worse, the gold standard has become the double-loaded corridor. And that’s because it’s “efficient.” It helps you maximize the amount of rentable or saleable area to gross construction area.
Here in Toronto, a typical efficiency — calculated as the net saleable/rentable area divided by the gross construction area — would be somewhere between 75-80%. Though many factors can affect this percentage, such as the amount of amenity space in the building.
There is certainly the option of just building a less efficient building, but then it means you’ll likely need to increase the price of the homes to compensate for this loss in efficiency.
This is the trade-off that is often made with smaller suites. More and smaller suites usually translate into more corridor space (i.e. a lower overall efficiency). But it may make sense to do this if you think your smaller suites will generate more revenue on a per square foot basis.
Off the top of my head, I can only think of two residential building in Toronto with an atrium. And that’s 71 Front Street East in the St. Lawrence and “The Atrium” at 650 Queens Quay West. The latter is pretty neat inside. The last time I checked, it even had fake palms.
In the case of both The Atrium and Libeskind’s Brooklyn project, the atria result in single-loaded corridors. (I’m not sure how 71 Front was designed.) Here’s what Libeskind’s project looks like:
The obvious advantage of this condition is that you get natural light into the corridors, whereas with a typical double-loaded corridor you don’t. But again, the disadvantage of this design is that you only have apartments on one side, instead of both sides.
In this case, the thermal envelope of the building is the outside face of each corridor (atrium side). This means the corridors are interior or conditioned spaces.
Another option would be to create open-air corridors, like in this example from Montreal. This creates corridors exposed to the elements, but now you’ve reduced your overall energy consumption (less space to heat/cool) and you’ve created the possibility of double-aspect units.
Personally, I’m a fan of atria and courtyards in residential buildings. But for the reasons we just talked about, they’re not that common. My sense is that they’re far more common in commercial buildings. John Portman, for instance, made a name for himself designing and developing hotels around them.
What are your thoughts, though? Would you pay a premium to live in a residential building with a nice atrium? I bet some of you would if it meant an improved suite design, such as more windows and more natural light.
One of the important things that I remember them drilling into our heads in business school was about how to write a business memo. This might not seem like a big deal, but it is. Emails, decks, and recommendations are ubiquitous in business.
I remember three main points.
One, use clear and concise writing. If you can use fewer words, do that. Two, be decisive. In fact, they used to tell us that being decisively wrong was always better than being vaguely correct. And three, be as quantitative as possible.
If you can replace words with numbers, you should do that. For example, instead of saying that something recently increased significantly, it is far more effective to say that something increased by 27% over the last 18 days.
I was reminded of this earlier today when I came across this:
Supposedly, it is what Amazon used to tell its employees back in 2018. I don’t know the source, but the tips sound right and make sense. Be concise. Use data. Eliminate weasel words. And make sure you’re communicating a “what”. In other words, be decisive.
I spent three years living in Philadelphia for grad school and one of the things that I appreciated the most was its walkability. I walked and took transit everywhere. Much of this has to do with the grid system that was laid out for the city in the 17th century. But there are also lots of more recent developments that help to reinforce this fabric.
CityLab, for example, just published this article on Penn’s Landing Square, which is a housing complex in Philadelphia’s Society Hill neighborhood. Built in 1970 and designed by Canadian-American architect Louis Sauer, the modernist complex occupies an entire 2.37-acre block and contains an assortment of 118 low-rise homes, many of which are connected through small interior laneways.
In addition to its handsome architecture, what is noteworthy about Penn’s Landing Square is that its site plan makes it quite a dense low-rise development. At 118 homes, this translates into just under 50 units per acre. CityLab estimates that this means the development holds about 174 people per acre (~412 people total), which would make it more dense than Stuyvesant Town in New York (~158 persons per acre).
However, this is based on the assumption that there are almost 3.5 people living in each of these homes. While generally large, I don’t know if this is the case. It would be higher than the average US household size. But regardless, from a unit per acre standpoint, it remains a great example of dense, family-oriented, and grade-related housing.
For fun, let’s compare this to a more intense form of infill development. Our Junction House project, for instance, contains 151 homes and sits on a 0.48-acre piece of land. This translates into about 315 units per acre. I don’t know off hand the average number of occupants per household, but I reckon that, given our larger average suite size, we should be on the higher end compared to most mid-rise condominiums. So I would say that we are probably 400+ people per acre.
It’s unfair to compare a single development to an entire neighborhood, such as Stuyvesant Town. Circulation and other open spaces will necessarily pull down your average density. But these individual development examples do speak for themselves. There are many parts of North America where you might find 1 home or a handful of homes per acre of land. At Penn’s Landing Square, this number is 50 units per acre. And at Junction House, it’s 315 units per acre.
