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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  • I think Roman Mars would appreciate Utah’s new state flag

    Utah got a new state flag over the weekend that looks like this:

    And I immediately thought of this TED Talk by Roman Mars. For those of you who don’t know, Roman is the creator of 99% Invisible and a great lover of well-designed flags. His general rules of thumb are to keep things super simple and to use meaningful symbolism. And I’m fairly certain that he knows what he’s talking about because, in his talk, he refers to the Canadian flag as the gold standard for flags.

    In the case of Utah’s new flag, the symbols are this. The blue at the top is meant to represent Utah’s wide-open skies and lakes. The white in the middle represents its snowy mountains (of course). The red stripe is meant to represent Southern Utah’s red canyon landscape. The hexagon is meant to reference a honeycomb. And finally, the beehive is there because, well, Utah is the beehive state.

    Utah has long enjoyed this reference to beehives. Supposedly, it was early pioneers who started throwing around this reference because they believed it symbolized working together, perseverance, and overall industry. And that’s why the state’s official motto is, “Industry.” So I’d say that they used/kept the right meaningful symbolism.

    Though when I first saw the new flag, I immediately wondered whether the hexagon and honeycomb could have been made just a little simpler. Was the yellow fimbriation, for example, really needed within the blue hexagon? But the more I look at it, the more I like it and the more I think that Roman Mars would be happy with how this turned out. What are your thoughts?

  • We are close to home

    I don’t use Facebook anymore, but I was recently sent this. It is a post by a reporter for The West End Phoenix asking people from the community what they think of the JUNCTION sign on top of Junction House. As of right now, there are 217 comments and, if you scroll through them, you’ll see that they are actually overwhelmingly positive.

    Some people were critical of the fact that, depending on what you consider to be the boundaries of the Junction, this sign may or may not actually be in it. Some see Junction House as belonging to the West Bend neighborhood. So here is yet another real estate developer stretching boundaries and renaming neighborhoods.

    I don’t know, neighborhood boundaries are a funny thing. They’re often amorphous and they often change. Here’s what Google believes to be the boundaries of the Junction:

    As you can see from the map, the whole point of the sign was to mark one of the entrances to the neighborhood. Although, Junction House seems to sit on contested lands; Google Maps shows it as simultaneously belonging to the West Bend. Whatever the case, it is really great to see that the vast majority of people seem to love the sign.

    My favorite comment is this one here: “Love it. My kid recognizes it and always yells that we are close to home.” I mean, this was our hope. We wanted to create something that could become a symbol for the area, help to reinforce its existing identity, and also bring people delight. The fact that kids are loving it makes it that much better.

    Perhaps this is proof that we shouldn’t be so rigid when it comes to the design of our cities. A little color, and some LEDs that look like neon, can be a positive thing. Just ask the kids.

  • Okay, fine, I support your laneway house

    This week, I received a notice in the mail that a neighbor to Mackay Laneway House is seeking variances for their own laneway house. I immediately thought to myself, “oh, the hypocrisy.” Here is a neighbor that vehemently opposed my Committee of Adjustment application back in 2017 and now wants to do something similar.

    It’s also not like you need minor variances in order to build a laneway house today. They are, as many of you know, permitted as-of-right. That’s how MLH was ultimately built. We went straight to building permit. But in this case, the request is for 7 variances to the current by-law. The build aspires to go above and beyond.

    As I’m sure you can imagine, there’s part of me that wants to be a real asshole here. But of course, that would run counter to many of the objectives that we regularly cover on this blog: more housing, revitalized laneways, and so on. So I can’t do that. It’s directionally the right city building move, and they have my full support.

  • France’s rental ban on energy-inefficient homes

    One of the things that you’ll notice on real estate listings in France is an Energy Performance Diagnostics (EPD) rating. In French, it gets reversed, and so it’s a DPE (diagnostic de performance énergétique). What it tells you is how much energy the dwelling (or building) consumes and how much greenhouse gas it emits. And it is a requirement on all real estate listings and for all dwellings, except those that are occupied for less than 4 months per year. The output of this diagnostic is a rating from A (best) to G (worst).

    According to FT, this is how primary residences in France rank today:

    Less than 5% of homes are rated A and B (the most energy efficient). And many more are rated G and F. Beyond just being energy inefficient, this is potentially a problem because there are penalties and restrictions for the lowest rated homes, one of which is that you are not allowed to rent out the property. Right now and as of January 1 of this year, the upper consumption limit is 450 kWh per square meter per year. Go above this and the home becomes ineligible.

    This number is also planned to reduce over time:

    • January 1, 2023: Rental ban on properties with G+ energy label
    • January 1, 2025: Rental ban on all properties with G energy label
    • January 1, 2028: Rental ban on all properties with F energy label
    • January 1, 2034: Rental ban on all properties with E energy label

    Now here’s what this is thought to mean for overall rental supply:

    By 2028, 5.2mn homes rated F and G, or 17 per cent of total housing stock, will become ineligible for rental. By 2034, all E properties will also be excluded, amounting to about 40 per cent of homes.

    This raises an interesting question: Is it more important to have energy-efficient homes or to have greater overall supply? Now obviously the goal and ideal scenario is both; lots of affordable homes that are also energy efficient. And presumably, one of the objectives of this rental ban is to stick/carrot owners into investing in energy measures. But it’s not exactly obvious as to how many owners will be able to renovate their homes in time, and how many homes will become ineligible for rent. This will be an interesting policy to watch as it plays out.

  • 4 predictions for Toronto’s laneways

    Brigitte Shim (of Shim-Sutcliffe Architects) invited Gabriel Fain and I to the Daniels Faculty this morning (at the University of Toronto) to talk about Mackay Laneway House.

    It was for a class on laneway housing and, as it turns out, some of the students had been using MLH as a case study. That’s pretty cool, although the primary lesson is probably “don’t build next to large trees.”

    Following the presentation, we had a good discussion about laneways, and it reminded me of some of the things that I believe to be true. More specifically, it reminded me of what I think will happen in the future:

    • Bona Fide Streets: Laneways will become bona fide streets. Meaning, they’ll get real names (most don’t have one today) and they’ll get serviced. Today, laneway suites are typically serviced via the main/existing house.
    • Severable Lots: Laneway lots will become severable. Right now this is strongly discouraged, because the intent is to create new rental housing and not new for-sale housing.
    • Market Inversion: Once these lots become severable, the market will then be able to decide which frontage is most valuable — the current street side or the laneway side. Maybe some get split right down the middle (50/50) or maybe some get biased toward one frontage. Either way, I think it will become common for the laneway frontage to be more desirable given its intimate scale and pedestrian orientation.
    • Mixed-Use: Non-residential uses will become allowed.

    I have no idea when all of this might happen, but I believe it will happen. So I wanted to write it down publicly.

  • The 1% club

    Knight Frank just published the 2024 edition of its annual wealth report and, it turns out, that 2023 was a reasonably good year for rich people. Below are some of the charts that I found interesting as I flipped through the report.

    The first is their Prime International Residential Index, which tracks the pricing of the most desirable and expensive properties in the following 100 locations. Generally, they define this as the top 5% of each market.

    Moving on, this is how much square meterage that US$1 million will buy you in select city and second-home locations.

    These are the cities that saw the greatest cross-border investment flows into commercial real estate.

    This is their prime property price forecast for 2024.

    This is what it looks like for prime rents.

    And finally, this is how much net wealth you need in order to join “the 1% club” in select countries/territories.

    To download a full copy of Knight Frank’s 2024 Wealth Report, click here.

  • Population-weighted densities, compared

    Boy, population densities can be so misleading. The typical approach is to just take the number of people and divide it by a given area. This then gives you something like X number of “people per square kilometer.” The problem with this approach is that there are countless factors that can skew your result.

    Hong Kong, for instance, is really dense. But as a city, it also has a lot of green space, mountains, and other undeveloped areas. Only about a quarter of Hong Kong’s land is developed. So when you divide total people by its administrative boundary area, it is going to appear less dense than it really is.

    One alternative approach is to use a method known as population-weighted density. The way this works is that you take the average densities of smaller more granular subareas and then weight them by the population of each subarea. It is a little more complicated to calculate, but the overall intent is to try and capture a density figure that more accurately reflects what the average person experiences on the ground.

    And this is exactly the method that Jonathan Nolan decided to use in his new website CityDensity.com. What his site allows you to do is compare population-weighted densities across various cities, and then see how it tapers off as you move outward from their city centers.

    Once again, it is hard to beat Paris’ supremely dense mid-rise built form:

    Well, that is, until you check out Hong Kong:

    Charts: CityDensity.com

  • In search of small

    A few people sent me this excellent article by Noah Smith today. In it, he talks about the institutionalization of the real estate industry and some of the challenges with developing smaller-scaled projects. I mean, just look at how the industry has concentrated itself:

    These imperatives privilege a concentration of the most well-capitalized firms who have done the most projects before. In 2022, nearly 25% of all multifamily units started in the country (more than 132,000) were commenced by just 25 developers. That’s a strikingly high percentage in a country of more than 60,000 developers. Similar trends exist for new single-family homes. According to the National Association of Home Builders, in 1989 the ten largest builders “captured 8.7% of closings.  By the year 2000, the share was 18.7%; and by 2018, 31.5%, reaching above 30% for the first time.”  In 2022, that number reached 43.2%.

    These figures are fascinating but they are not surprising. Most developers have a minimum project size and, over time, it tends to grow. Market factors dictate this. The irony is that smaller projects are often great for cities. Think about how often urbanists like to criticize large-format retail vs. fine-grained retail.

    If it doesn’t already exist, someone should create a YouTube channel covering the smallest development projects from around the world. I would watch that.

  • Front yard setback

    Following yesterday’s post on small-scale apartments, a number of people commented on the 6m front yard setback that was shown on the city’s drawings and that I mentioned in my post. Well, it turns out that I wasn’t entirely correct about the 6m. What is proposed in the draft zoning by-law is the following:

    The modelling has illustrated building setbacks that are appropriate for townhouse developments and small-scale apartment buildings on major streets in a Neighbourhoods context. Based on the review, Urban Design staff recommend that the front yard setback be implemented through use of the average of the existing neighbouring setbacks, or a minimum of 3 meters, whichever is greater. This approach maintains consistency with the existing character of the Neighbourhoods supports protection of existing mature trees.

    As you might expect, the approach with these small-scale apartments is to be mindful of the existing low-rise context. But as many of you rightly pointed out when you saw the 6m, the existing context may not be appropriate or ideal for the planned context, especially if there’s retail at grade.

    This is just one of the many details that we’ll need to be careful with as this initiative moves forward.

  • Toronto wants small-scale apartments on its major streets

    This week we speak about the problem of not enough density next to transit stations. More specifically, we spoke about Toronto’s low-rise residential neighborhoods, which are colored yellow in the city’s Official Plan. Well, as many of you know, the city is, in fact, working to “expand housing options” in these neighhorhoods through their EHON program. One component of the program covers laneway and garden suites, another covers multiplexes (up to fourplexes), and another hopes to allow 6-story apartment buildings on all major streets.

    Here are the city’s major streets:

    And here’s what these “small-scale apartments” might look like:

    The setbacks are intended to be 6m in the front (to be consistent with existing neighborhood setbacks); 1.8m on the sides (so there’s rear access and so that these elevations only get fenestration for secondary rooms); and 7.5m in the back (which is consistent with the current mid-rise guidelines). Now, directionally, and without referring to any of the specific details, this is good. Toronto’s major streets are, in most cases, painfully underdeveloped; the existing built form feels generally entirely out of place. But the important question remains: Will developers actually build these at scale?

    Bloor Street and Danforth Avenue, for example, already allow mid-rise buildings that, for the most part, are bigger than what is being proposed here as part of the EHON program. But again, they remain underdeveloped. And there’s a subway running underneath these streets! So why will it be any different on our other major streets? One key difference is that these small-scale apartments are expected to be fully as-of-right. Meaning, no rezoning process and no community meetings. This will save a lot of time and money.

    Still, this is almost certainly going to require some iterative finessing to get it right. I think you’ll see developers looking to do little to no parking, no basements, no dedicated loading areas (certainly no type “G” spaces), slab-on-grade construction, and standardized and repeatable designs. And even then, this may not be enough. Rental replacement policies are yet another major barrier to consider. It’s going to have to be all about speed and efficiency, which is why it will likely also create a greater push to rethink some building code items, such as the requirement for two means of egress.

    At the end of the day, I want something like this to happen. It would increase housing supply, and make Toronto far more vibrant and far more conducive to non-driving forms of mobility. It’s, no doubt, a really positive thing. But for this to become a reality, it needs to work at scale. Meaning, the development pro formas need to work at scale, and with sufficient margin that developers won’t just automatically look to other opportunities. If the development community can make money building this housing typology, they will look for every opportunity to build it. But if they can’t make money, they won’t. It’s as simple as that.

    Images: City of Toronto