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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  • Unfair labor practice

    At the beginning of this month, the Government of Canada issued this direction, setting out the requirement for all public servants to be “in the workplace” at least three days per week. To ensure some flexibility, it also specified that it didn’t have to be exactly this schedule. But the intent was that public servants would need to spend a minimum of 60% of their regular schedules, in the workplace, whether measured on a weekly or monthly basis.

    Immediately, the Public Service Alliance of Canada reacted and said that it would be filing “unfair labor practice” complaints: “We will be using every recourse we have available to fight this mandate,” PSAC national president Chris Aylward said, arguing that the surprise policy update was “anti-worker” and “fundamentally breaks the trust of workers and unions with the Trudeau government.”

    Now, I understand that there are a whole host of legal considerations with a mandate like this. If remote work has, for example, become an implied term of these employment relationships, then it might be difficult for any employer to call these people back. Thankfully, I am not a lawyer. And so I don’t think this way. It is probably also the case that I’m now in my middle adulthood and have old school views on this topic.

    Because in my mind, this is the government saying, “hey everyone who works for us, we’d like you to come into the office at least three days a week so that we can work together as a team, collaborate, and hopefully innovate.” And this is employees saying, “no way, that’s totally unfair! How dare you demand we come into the office that much?” Like, since when did going into work become such a problem?

    At the same time, Canada is suffering from an existential productivity problem. This country has seen no productivity growth in recent years. And if you compare us to other developed countries, we are near the bottom. Even France — which is stereotypically famous for its relaxed work culture and its ban on after-work emails — is more productive than were are!

    This needs to change or we will remain a deeply troubled country. And like everything, it’s going to require work.

    Photo by Marc-Olivier Jodoin on Unsplash

  • Fewer babies, fewer homeowners

    Since the 1940s, the US has been adding roughly 9 million new homeowning households about every 10 years. This, after all, is a fundamental component of the American Dream. But Aziz Sunderji — who writes over at Home Economics — has recently been arguing that this 80-year boom is now at an inflection point. And it is largely because the rate of population growth in the US is now declining. Here’s his chart, which uses data from the US Census Bureau and the World Bank:

    In fact, for the first time ever, the Census Bureau is now forecasting the US population to start declining. The current forecast has its population reaching a high of 370 million in 2080 and then declining to 366 million by 2100. But even before these far off dates, organic growth is expected to turn negative in less than 15 years (see above). So yeah, it makes sense that this would impact the real estate sector.

    For more on the future of homeownership, check out Aziz’s Home Economics.

  • Desirable vs. affordable

    Resonance Consultancy, which is a placemaking firm that we have spoken about before on the blog, is working on a new America’s Best Cities report. And as part of this, they’ve been surveying Americans about which cities they would most like to live in and visit. The result is a list of the most “desirable” US cities that looks like this:

    1. New York
    2. Miami
    3. Los Angeles
    4. Las Vegas
    5. San Diego
    6. Chicago
    7. Seattle
    8. San Francisco
    9. Houston
    10. Denver

    The long and the short of it seems to be that people generally want to live in the places where they like to travel. But what’s interesting is that if you look at the US cities that have actually grown the most in absolute numbers over the last few years (specifically April 2020 to July 2023), the list transforms into this:

    1. Dallas (+462,639)
    2. Houston (+360,649)
    3. Phoenix (+219,008)
    4. Atlanta (+200,414)
    5. Austin (+189,896)
    6. Tampa (+167,672)
    7. San Antonio (+145,884)
    8. Charlotte (+144,767)
    9. Orlando (+144,542)
    10. Jacksonville (+107,396)

    The only city that shows up on both is Houston.

    What this suggests is that cities very much have brands. And when you ask people where they’d ideally like to live, they think of the sexiest ones. Places like New York, Miami, Los Angeles, and so on. But it when it comes to actually moving somewhere and paying for a home, there are clearly other realities to consider — the most important of which is probably affordability.

  • Be your own bitch

    I just joined Warpcast. You can find my profile, here.

    At first glance, Warpcast is going to look a lot like X. But instead of tweets, you cast. There are also various topic channels, similar to how Reddit works. But the most important difference is that Warpcast is a client for the Farcaster protocol, which is a social network built on Ethereum. This means that it is a decentralized social network.

    You won’t see of any this if you decide to sign up. All of the esoteric crypto things are hidden in the background. But it’s there. And it ultimately means that, as a user, you get to own your online identity and whatever content and following you create. Meaning, you can take it with you if you decide you no longer want to use Warpcast and instead want to access the network through another client.

    It also means that software developers now have a real incentive to build things on top of the protocol, because unlike with a centralized service like X, they can be confident that they won’t get the rug pulled out from underneath them. And herein lies the feature that will ultimately lead to an enormous amount of new ideas and innovation.

    In real estate terms, you can think of developing on top of a centralized service like building within a theme park owned by a single company. The theme park might want you to build on their land, right now, but if at some point it no longer suits their business needs, they can always change the game on you.

    On the other hand, building in a city on land you own outright is a lot like developing on top of a decentralized service. Sure, you need roads and municipal infrastructure to service your land (think of these like the above protocol), but you generally don’t need to worry that the city might wake up one day and remove all of this important infrastructure. It’s a given. And that’s a fundamental difference, even if the buildings might look the same in the end.

    Venture capitalist Fred Wilson once explained it in this way, “don’t be a Google bitch, don’t be a Facebook bitch, and don’t be a Twitter bitch. Be your own bitch.” What he meant by this is that if you build on someone else’s land, then you’re opening yourself up to being their bitch. What you want to be is your own bitch. And similar to how our cities work, this is the potential of decentralized services.

    As I write this post, I currently have 6 followers on Warpcast. If you’d like to be number 7, you can follow me here.

  • Why we shouldn’t blame Uber for traffic congestion

    It has become fairly common to blame Uber (and ridesharing in general) for increased traffic congestion. I hear it all the time: “If only there weren’t so many Ubers on the road, traffic would flow more freely.” While there are studies suggesting that “deadheading” miles do have a negative impact and that Uber can draw people away from public transit (that’s bad), I think it’s important to consider the bigger picture here. So let’s try and do that today.

    Firstly, let’s think about who traffic congestion directly impacts (indirectly it’s everyone). If you’re a pedestrian, you don’t care about traffic congestion. In fact, maybe you gain satisfaction from seeing other people stuck in it. (There’s even a German word for this feeling.) Similarly, if you’re riding the subway, taking any form of transit on its own right-of-way, or riding a bike, you likely also don’t care about traffic congestion. It doesn’t directly impact you.

    Where you do care about congestion is if you’re in something like a bus that is stuck in traffic or if you’re driving. In the former case, you’re probably thinking, “hey why can’t these people take the bus like me. Then we’d have less traffic!” And in the latter case you’re probably thinking, “if only there weren’t so many Ubers and bike lanes, then I wouldn’t be stuck in traffic!” Ironically, this is arguably the biggest segment of people who feel they are being impacted by Ubers.

    Secondly, let’s think about how Uber vs. driving might impact traffic congestion differently. In both cases, I would think that the majority of use cases involve one person (excluding drivers in the case of Uber) going to their desired destination. So from a raw space per person perspective, they both take up a similar amount of urban space.

    The differences are that the Uber likely had some amount of deadhead miles. In other words, it spent time driving around looking for its next passenger. And it likely targeted already busy areas because that’s where it was more likely to find someone. Individual drivers don’t do this. They go from point A to point B.

    However — and this is a big however — drivers do require parking once they get to where they’re going. Ubers don’t. This both takes up more space and oftentimes requires some amount of circling around. This is a significant difference and it begs the question: which is worse? Deadhead miles or all of the parking that cars generally require? I would argue the latter.

    Where I’m going with all of this is that I think the criticism of Uber is misdirected. It doesn’t get at the real underlying problem. If traffic congestion exists, it is because they are too many cars for a finite amount of road space. This includes the people who choose to drive themselves around. In fact, you could argue that they’re the most impactful to cities. The way you solve this is simple: you price congestion and you encourage alternative forms of mobility.

    Everything else is just a distraction.

  • Eating by algorithm

    Grocery shopping is one of those things that — despite a lot of people really trying — has remained a stubbornly in-person activity. However, the pandemic did give online grocery shopping a significant boost, and lot of that has stuck, even if it has been trending slightly downward from its peak. Here are a few slides from Dan Frommer’s Consumer Trends: 2024 Food & Wellness Special report:

    Part of the challenge may be that the majority of people say they actually like grocery shopping, and doing so in a physical store:

    So it is very possible that, for the foreseeable future, there will always be a large segment of buyers who prefer to shop in-store. But then again, if you asked me these same questions, I would also tell you that I like grocery shopping and that I prefer buying in-store. However, that doesn’t mean I wouldn’t be open to alternatives. I just haven’t explored and found a suitable online option.

    At the same time, and according to the same Consumer Trends Survey, about 10% of Americans say they currently dislike grocery shopping. Maybe this is the same 10% who are right now shopping online. Either way, this is already a large segment of people who would rather not go into a grocery store.

    Intuitively, as the online offerings get better, one would expect this number to grow. Here, for example, is an interesting overview of the service Hungryroot. One part “meal kit” delivery and one part online grocery shopping, the company uses machine learning and algorithms to determine what its customers might want to buy. Already, about 70% of what it sells is picked automatically.

    On the back end, McKean explains, among other actions, Hungryroot is “clustering” its new customer with other users who have answered its onboarding survey similarly and have already been with the service for multiple years. “And so we can say, ‘okay, people who filled out that signup flow like you… they loved these top recipes with high probability, so we think you’re going to love these recipes with high probability’.”

    What I like about this is that it requires fewer decisions; it has the potential to feel like you have a private chef (one that learns what you like and adjusts accordingly); and it promotes dietary variety. For the typical American, 75% of what they buy in a grocery store is the exact same as what they bought the last time. There’s very little variety, because it’s always easier not to have to think.

    Given this stat, it is maybe surprising that this 75% hasn’t become more automated for more people. Perhaps it’s the 25% that keeps most of us going into stores. I’m not sure, but I think I’m ready to try a service like Hungryroot.

  • Happy May long weekend

    This morning, I went cycling with my good friend Austin Kjorven up in Milton. And it was a stark reminder that he is an athlete and holds a Guinness World Record, and that I spend the vast majority of my days sitting at a desk.

    I’m excited for more riding this summer. Happy May long weekend, everyone.

  • Salt Lake City wants to turn Main Street into a pedestrian promenade

    Last year, I wrote about how Salt Lake City wants to build a new linear park around its downtown. That post can be found, here.

    Fast forward to today, and the city’s Department of Economic Development has just published a new comprehensive 215-page study that supports turning Main Street into a pedestrian promenade.

    Specifically, the area running from South Temple to 400 South, and including 100 South from Main to West Temple:

    As part of the study, they highlight a number of successful case studies from around the world, including 16th Street Mall in Denver, Bourke Street Mall in Melbourne, and Queens Quay here in Toronto.

    In the case of Denver, they cite the one-mile stretch as single-handedly generating over 40% of the city’s total downtown tax revenue! And in the case of Toronto, they refer to Queens Quay as a global destination. (Toronto readers, do you agree?)

    Like most city building initiatives, this vision is will take years to realize. But it’s interesting to note that, of the eight design alternatives included in the study, there is already one clear preference within the local community — option B.

    Option B is a pedestrian/transit mall, but with multi-use trails. In other words, it is a no-cars-allowed alternative that would still allow bicycles and scooters. Here’s the street section:

    If you’d like to download a copy of the full Main Street Pedestrian Promenade Study, click here.

  • The US is building a lot of apartments right now

    As of November 2023, it was estimated that there were 988,000 homes under construction in multi-family buildings containing 5 or more units. This is in comparison to 680,000 single-family homes, according to US Census data. (Looking at the below graph, it’s also interesting to see how the supply of single-family homes dropped off after the global financial crisis and multi-family apartments took off.)

    All of this means that in 2024, the US is on track to complete more apartments than it has in many many decades. In fact, exactly similar to what we experienced here in Toronto, if you want to find a comparable multi-family supply number, you need to go as far back as the 1970s (see below). Of course, the US had fewer people back then, and so on a per capita basis, it was building more housing.

    Still, all of this new supply is having an impact. Apartment List recently published its national rent report, over here. And overall, it found that:

    Rent increases are currently being moderated by a robust construction pipeline expected to deliver a decades-high number of new apartment units in 2024.

    More specifically, they found that the cities with the most supply are now seeing the largest rent declines:

    Many of the steepest year-over-year declines remain concentrated in Sun Belt cities that are rapidly expanding their multifamily inventory, such as Austin (-7.4 percent year-over-year), Raleigh (-4.4 percent), and Orlando (-3.9 percent).

    If you’re an apartment developer, this is not what you want to see. It means that increased competition is creating downward pressure on rents and that vacancy rates are probably rising. But if you’re someone looking to rent an apartment, this is exactly what you want to see. You want more affordable housing. And so, as a consequence, you want more homes to be built. Because when supply outstrips demand, this is what you get.

    Charts: Apartment List

  • Just give me the fastest option

    I had a dinner in the suburbs this evening. And so in the afternoon today, I opened up Google Maps to figure out how I was going to get there.

    I didn’t have my car with me — because I hate driving into the office — so in my mind, I was either going to take transit or take an Uber.

    These are the time estimates that Google gave me:

    It was going to take me over 4 hours to walk there. Over an hour to drive there. And 47 minutes to take the train there. Interestingly enough, cycling was also going to be faster than driving.

    As soon as I saw this, I shut down the app and decided I would take the train. All I was interested in was the absolute fastest option. And for me at that moment, it was the train.

    I recognize that this isn’t always the case. Sometimes driving is much faster than taking transit. It depends on a number of factors.

    But as a general rule, when it comes to big and dense cities, you really can’t beat trains and bikes for moving the greatest number of people, as quickly as possible.