Tag: atc

• What a “buy now” button will mean for the new construction real estate industry

  

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  Recently it has been in the news that BuzzBuzzHome.com – the new construction real estate site – will be launching a “buy now” feature in the new year (2016).

  This will allow people to buy condos and homes online with their credit card, which means that people will be able to pay the $5,000 deposit online and process all the paperwork that today happens within a sales office.

  This is huge.

  If you’re somebody who has used a computer and the internet before, the process today feels archaic. Typically you go online to register for a project and then somebody will call you to arrange an appointment. If you ask them to email you the price sheet and floor plans ahead of time, they’ll almost always tell you that they can’t do that and that you’ll need to come into the sales office for an appointment. 

  But what about if you end not liking the floor plans and you’re about to waste a few hours of your time? Too bad. The sales funnel requires you to be present in person. This is nothing against the many talented sales professionals working in new construction; it’s just that if I can design and price out a car online and if Mark Cuban can buy a $40 million jet online, then I should be able to shop for a new condo online.

  BuzzBuzzHome has been chipping away at the current model for years and they’ve managed to get a lot more information online than was previously available. When Matthew and Cliff first launched BuzzBuzzHome in the late 2000s it was almost unheard of for developers to put any sort of pricing and floor plans online. Now they at least have some of that on their site. I’m glad they stuck with it.

  Because what’s equally exciting about what BuzzBuzzHome is doing is that in order to offer a “buy now” feature, they also need to have an accurate account of all developer inventory on hand. And so alongside this “buy now” feature they’re also building out a full cloud-based inventory management system for developers. 

  This means that BuzzBuzzHome will soon be managing the supply-side of the new construction marketplace. Think of the data and analytics you can extract from a platform like this. It’s going to bring much greater transparency to this industry.

  But if your business is in any way connected to the new construction real estate market, I would take this morning and think about how the above innovations could impact your business model. I can think of a few winners and losers.

  Some of you might be thinking that people aren’t going to make the biggest purchase of their life online. But I would bet the farm that many people will. I know I would.

  2015.11.12

• Real estate + tech

  If you’re interested in tech and tech products, you might be familiar with a platform called Product Hunt that helps you discover new products/startups on a daily basis. They launched back in 2013 and have since become an important part of the startup ecosystem.

  Here in Toronto, the Product Hunt community has been incredibly active with organizing regular meetups. Every 2 months they host an event, which includes a keynote speaker, 3 product demos from local startups, a panel discussion, and of course the usual drinks.

  The next Product Hunt Toronto event (#7) is scheduled for Thursday, November 26th at 6pm and the focus is on digital products serving the real estate industry. Back when I became obsessed with this space, this would have been considered pretty niche. But today there’s a tremendous amount of interest in the overlap between real estate and tech. And I’m thrilled to see that.

  If you’re also interested in this space, you should grab a ticket right now. They just went on sale yesterday, but usually sell out within a few days. At the time of writing this post, there are only 82 tickets left. I’m also going to be delivering the keynote talk. So I hope to see you there 🙂

  2015.11.10

• Timeline of tall buildings completed in New York since 1908

  The Council on Tall Buildings and Urban Habitat recently published an interesting report called, New York: The Ultimate Skyscraper Laboratory.

  The money shot is this image here:

  

  It is a timeline of all tall buildings (over 100 meters) completed in New York since 1908 when the Singer Building was completed. At the time, but only for a year, that was the tallest building in the world.

  The gray bars represent the total number of buildings completed each year. And the colored dots represent specific completed buildings and their asset class (office, residential, mixed-use, hotel, and so on). It’s interesting to see the dips. During World War II, high-rise construction basically stopped.

  Check out the full report if you’d like to see a bigger version of the graph.

  2015.11.09

• Balancing oil and ideas

  

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  Canada is a resource rich country. And one of the things that commonly happens to countries with a lot of resources is that they begin to myopically focus on the immediate gains from resources at the expense of long term innovation and economic development. 

  This is known as the “resource curse.”

  The Martin Prosperity Institute here in Toronto recently published a report that looks at this exact topic: Canada’s urban competitiveness through the lenses of its resource economy and its knowledge economy. In the end, Richard Florida and Greg Spencer conclude that two can and should work together, but that we need to stop neglecting our cities:

  “The oil and gas industry is not necessarily a constraint on the creative economy, but in the past decade or so it has come to dominate thinking around economic development policy-making. It is time to use the resources from the energy economy to build a more secure future as an urban knowledge economy. We can also use
  talent and technology to deepen and expand the resource economy.”

  And one of their key recommendation is something I have argued for many times here on Architect This City:

  “A New Federalism for Cities: It is time to give cities the taxing and spending powers they require. Cities must be given more control over their own destinies if they are to prosper
  in the 21st century.”

  Now, here are a few interesting charts from the report.

  This first one looks at the relationship between a city’s population and its creativity levels. The two are positively correlated, which means that, in this context, bigger is better.

  

  This second one splits Canada in half – east and west – and then looks at how average income levels are affected by creativity levels (the knowledge economy). Here we see that in eastern cities, income levels are positively correlated with creativity levels. But in western cities, changing creativity levels have almost no impact on income levels. 

  

  Finally, this third chart compares the relationship between oil and gas employment (LQ = location quotient) and average income levels. What it finds is that income levels and oil and gas employment are positively correlated in the west, but there’s almost no relationship in eastern cities. 

  The way to read this chart is to think of the LQ as the employment multiple relative to the national average. So for example, a LQ = 10 means that the oil and gas employment levels are 10 times the national average. As you probably guessed, the pink dot way out on the right is Fort McMurray.

  

  If you’d like to read the entire report, you can do that here. I hope that our new Prime Minister, Justin Trudeau, will read reports like this and spend more of his efforts investing in our knowledge economy – which means investing in our cities.

  2015.11.08

• Condo building identities according to Instagram

  I am very interested in the social side of buildings. What I mean by that is that we usually focus on the quantitative side. We look at sale prices. We look at average prices per square foot. We look at reserve fund balances. And as I recently argued, this is all very important stuff. I think we should do much more to make this data publicly available.

  But there’s also a side to buildings that’s harder to measure: the human side. Sale prices and staged MLS listings don’t tell you what the people who live in the building are like. What the vibe will be like at the pool during the summer. If you can expect to find dog poo in your elevators. But when you live in a multi-family building, I think most people will tell you that the qualitative side also matters.

  So this morning, I thought I would run a little experiment and pull the top Instagram photos for a random sampling of relatively new condo buildings in Toronto. These are public photos that have been uploaded and tagged with that building’s location ID. 

  Obviously there’s an inherent bias since I figure Instagram users probably lean towards Millennials. Also, the top posts could be easily skewed by a small number of heavy influencers. But I still thought it would be interesting to see if any particular identities started to emerge. And I do see some differences that reflect what I would have expected. I wonder how these might relate to the original marketing for the buildings.

  What do you think of the photos below?

  Feel free to do the same for your building and post the photo in the comments below. That could make for a really interesting discussion. My building is the first photo.

  

  2015.11.07

• #donthave1million

  

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  After I wrote this week’s post about Chinese homebuyers in Vancouver, I was surprised to learn about the racism debate that flared up in the city / on Twitter. I guess this really is a touchy subject. (See: #donthave1million)

  My reaction to the research was: Great to see someone (Andy Yan) putting in the time to try and better understand a market phenomenon. It’s painful how opaque real estate markets can be. Let’s get even more data so that we can make even better policy decisions. I didn’t read it as: let’s deliberately single out a race.

  Because the reality is that we all knew this was happening.

  Bloomberg recently published an interesting and related article that talks about China’s money exodus and how the Chinese logistically get their money out of the country. There are restrictions in place. 

  But first, here are two snippets from Bloomberg that describe the order of magnitude we’re talking about:

  This flood of cash is being felt around the world, driving up real estate prices in Sydney, New York, Hong Kong and Vancouver. The Chinese spent almost $30 billion on U.S. homes in the year ending last March, making them the biggest foreign buyers of real estate. Their average purchase price: about $832,000.

  In total, UBS Group estimated that $324 billion moved out last year. While this year’s numbers aren’t yet in, during the three weeks in August after China devalued its currency, Goldman Sachs calculated that another $200 billion may have left.

  Now here’s how it is being done:

  It works like this: Chinese come to Hong Kong and open a bank account. Then they go to a money-change shop, which provides a mainland bank account number for the customer to make a domestic transfer from his or her account inside China. As soon as that transaction is confirmed, typically in just two hours, the Hong Kong money changer then transfers the equivalent in Hong Kong or U.S. dollars or any other foreign currency into the client’s Hong Kong account. Technically, no money crosses the border – both transactions are completed by domestic transfers.

  And here’s a snippet that stood out for me because it shows how easy this has become:

  While the first exchange has to be set up face-to-face, customers can place future orders via instant-messaging services such as WhatsApp or WeChat, and money changers set no limit on how much money they can move.

  Given the scale and complexity of this issue – housing affordability – I have to believe that cities and policy makers would be far better off with more, rather than less, information. I hope we can work towards that.

  2015.11.07

• Will parking spaces in cities become more, or less, valuable in the future?

  

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  Lately I’ve been having discussions around the future value of parking spaces in urban centers. So yesterday I tweeted out this poll:

  Will parking spaces in cities become more, or less, valuable in the future? 💸 #AThisCity

  — Brandon G. Donnelly (@donnelly_b)

  November 4, 2015

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  The sample size is very small, but for what it’s worth, there are some/many people who believe that urban parking spaces will become more valuable in the future.

  This is a reasonable assumption. 

  Over the last couple of decades here in Toronto, I would guess that parking ratios for new multi-family developments have probably fallen by more than half. It used to be that you had to build 1 to 1.5 parking stalls for each unit and now we seem to be sitting somewhere close to 0.5. Although, there are also exceptions and some projects today are getting built with no parking.

  So given that the supply side of urban parking spaces seems to be getting constrained and many cities are actively trying to encourage other forms of mobility, it’s not unreasonable to believe that parking stalls will only become more valuable. That’s why a new underground spot in Toronto might cost you $60,000 today and why some spots in New York can even fetch a $1 million. 

  But this assumes that the demand for parking will remain more or less the same. What if it doesn’t stay the same? What if we were to experience a tipping point that rearranged urban mobility? What if the cost of driving became so high that people stopped driving at scale? In these scenarios, the demand side of the equation would change.

  If you’re a regular of this blog, you probably know what I’m going to say next. But already I can think of two innovations that would contribute to the above scenarios: Uber and driverless cars.

  Uber’s goal is to continually drive down the cost of transportation and eventually get you to no longer own a car. They know very clearly that the demand for transportation services is highly elastic and that the cheaper they get the more you will use them. And the way they get cheaper is by continually increasing the utilization rate of their drivers/cars. An idle driver/car is the enemy.

  Of course, the other way to drive down fares is to remove the driver all together. And once you’ve done that, there is, in theory, no reason that a car should ever sit idle – like they do today. (The utilization rate for my car is around 2%.) And if a car is never sitting idle, then why would you ever need to park it? Certainly you wouldn’t need to park it as often as you do today.

  All of this isn’t going to happen tomorrow, but I believe – despite the supply constraints – that we are going to end up with excess parking spaces in our cities. And that will mean that they are going to be perceived as less valuable than they are today. I also believe that it will eventually seem silly to drive your own car. 

  What do you think?

  2015.11.05

• Throwing butts

  For whatever reason, some of the people living in high-rise buildings believe that if you flick a cigarette butt off a balcony that it will magically disintegrate on the way down. It’s either that or they don’t give a shit about anyone else.

  Because if you happen to live in or manage a building which has patios or terraces at the base of tower, I bet you have this problem:

  

  Above is a picture of a Belmont cigarette burning through the tarp covering the wooden harvest table on my patio. 

  It’s a destruction of property, an environmental concern (many butts end up in stormwater drains), and a pretty scary fire hazard. I know of many incidences where thrown cigarette butts have started fires in a high-rise building. It happened last year in my mother’s building.

  However, the frustrating thing about this problem is that it’s exceptionally difficult to stop. I know this because I sit on the board of my condo building. The typical response is for management to send out notices to all the residents asking them to stop doing this. But frankly, that does nothing.

  So if any of you know of a company or service (or have a product idea) that can help with this, please contact me. But if no such company or service exists, I am positive that you could create it today and sell to almost every condo corporation and property management company that have a condition where terraces or patios sit below a tower. Because inevitably, there will be someone upstairs throwing butts.

  Many buildings have a similar issue with dog poo. People simply don’t pick up after their dogs. So some property managers have started taking stool samples of every dog who lives in the building. That way they can easily determine which residents aren’t picking up after their dogs. I guess that’s what it takes to get some people to give a shit.

  Of course, this isn’t a problem just in buildings. Cities in general are always fighting litter. That’s why you see ideas like this pop-up:

  #neatstreets, idea geniale per ridurre i mozziconi sulle strade pic.twitter.com/udbV7IH9AW

  — Else Project (@ElseProject_)

  October 14, 2015

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  This particular one (in London) was designed to stop people from throwing their cigarette butts on the street. Instead, you use your butt to vote. In this case: England vs. Australia.

  We talk a lot about big ideas here on Architect This City. What driverless cars will mean for cities, how laneway housing could help with housing affordability, and so on. But the smallest ideas can also matter a lot for city building. Sometimes we forget that.

  2015.11.04

• The impact of Chinese buyers on Vancouver’s single family home market

  I have a new favorite blog that I think you might all enjoy as well. It’s called BT | A | Works and it is the “architectural and urban research and development division” of Bing Thom Architects in Vancouver. 

  I think it’s it’s important to have people in a firm who are researching and experimenting with ideas beyond the day-to-day tasks of a job. So I was excited to discover their work this morning.

  Their most recent post is a look at ownership patterns of single family homes sold in 3 west end neighborhoods in Vancouver from September 2014 to February 2015 (a 6 month period). These are some of the most expensive areas in the city and, collectively, they found 172 properties sold with an aggregate value of around $520 million.

  

  Given the presence of foreign buyers in Vancouver’s real estate market, one of the things they then did was identify “non-anglicized Chinese names” on the title records. This means names like “Li Xian”, but not names like “Andrew Shui-Him Yan”, because the anglicized first name suggests that they are probably not a new immigrant or probably not living abroad.

  Here’s what they found:

  

  In total, 66% of the properties in the sample (172 properties) were associated with a non-anglicized Chinese name. And for properties over $5 million, the percentage jumps to 88%. The other interesting thing worth noting is that 23% of the registered owners declared their occupation as “homemaker/housewife.”

  I thought this would serve as an interesting follow-up to the post I wrote about a month ago called, Is Hongcouver better off than Vancouver? If you’d like to see the full BT | A | Works presentation, click here.

  2015.11.03

• Los Angeles seeks Creative Catalyst

  

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  We all know that city building is a multi-disciplinary endeavour. That’s why I was incredibly interested to learn about a new “Artist-in-Residence” program that Los Angeles is launching:

  The Honorable Mayor Eric Garcetti, is pleased to announce the first collaboration between two City of Los Angeles departments to place an artist in residence in a department to serve as a Creative Catalyst who will develop creative intervention strategies to achieve department specific goals. The Creative Catalyst Artist in Residence Program will serve as a model to stimulate creative thinking and innovative projects, while supporting Mayor Eric Garcetti’s Back to Basics priority outcomes: to make our city livable / sustainable, prosperous, safe, and well-run.

  Cities are complex organisms. And some of you might be wondering how artists can help city build. But this is about bringing different minds together, thinking across disciplines and, hopefully, leveraging design thinking to solve urban problems. And LA is not the only city to try this approach.

  In my view, it’s not that dissimilar from the trend around “Designer-in-Residence” programs at venture capital firms and startup incubators. Cities, businesses, and many other organizations are recognizing that the way artists and designers think can be of tremendous value.

  So if you’re an artist who lives and/or works in LA, this might be something worth considering. You have until this Friday, November 6th, 2015 to apply.

  2015.11.02