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.

Tag: athiscity

  • Urban population densities, compared

    Earlier this month The Washington Post published an article called, There’s no such thing as a city that has run out of room.

    And what it was really about was that when we say there’s no more room (I guess people are saying this), we are really saying that we just don’t want to allow anyone else to become our neighbor. Because the reality is that urban population densities vary widely around the world. So how can you really call a place full?

    I’m not sure I feel this pain point as much as the author, but I always find population densities to be a fascinating topic. And accompanying the article was a tool – using data from Demographia – that allowed you to compare the population densities of various cities.

    Here are are two scenarios I ran:

    It’s important to keep in mind that these numbers are averages for the entire economically contiguous region. So it tells you nothing about the potential spikiness of certain areas. That’s why the population density of New York (which includes portions of New Jersey and Connecticut) probably seems low to you.

    Still, it’s fascinating to see how extreme some cities – including some first world cities like Hong Kong – can be. Clearly many cities have a lot of room to become a lot more dense. And I think that would be a good thing.

  • How cities get branded

    Taxi on Times Square by frederic prochasson on 500px.com

    https://500px.com/embed.js

    I have been thinking a lot about city branding lately. It’s a topic I’m interested in to begin with, and all of the Blue Jays mania going on in Toronto right now has got thinking about our own brand.

    Because at the end of the day, yes, it’s baseball. But it’s also something much larger. It’s about civic and national pride, and it’s about who we are as a city. That’s why city branding has become a global industry and why it’s so closely connected to tourism, media, sports, and entertainment.

    Still, great city branding is incredibly difficult to do. Lots of cities have tried and lots of cities – from Adelaide to Toronto – have failed. Anyone remember the “Toronto Unlimited” brand of the mid-2000′s? It had absolutely zero stickiness.

    But in reality, cities are brand building all the time whether they realize it or not. Here in Toronto, our biggest brand builder right now is probably Drake. That might sound silly to some, but I believe it to be true. And next to that, you have people like Jose Bautista with his bat flips and his support of local brands like Peace Collective. In addition to their day jobs, these people are helping to shape the identity of the city.

    What, then, is professional city branding supposed to do?

    Well, in my opinion, it is their job to mine a city for the things that already exist. A city brand, no matter how great it may be, cannot be expected to create something from nothing. There has to be something there to begin with.

    But once you identify that something, a great city brand can tie it all together; create a cohesive and collective identity; and serve as a guide for future decision making. And when that’s done effectively, you actually begin to enhance the things that you initially started out with. The associations become even more powerful.

    So today I thought we could have a discussion in the comments about city brands. How would you describe the brand of your city in one sentence?

    For me, I would describe Toronto along the lines of being the most livable and multicultural 24/7 global city. And when you think of it this way, you can probably see why I think a 2AM last call at the bar is laughable.

  • Thoughts on land-value taxation

    Yesterday I wrote about a new book that was just released called The Next Urban Renaissance

    The first essay in the book, written by Ingrid Gould Ellen of New York University, is centered around three ideas to help cities deal with the affordable housing problem. This is something that successful cities all around the world are grappling with.

    The first idea is land-value taxation, which is also known as a “split-rate” tax. I’ve touched on land-value taxation before on ATC, but I never really dug into it. So this was a good reminder to do that.

    The idea behind land-value taxation is to split property taxes into a land tax and an improvements tax (i.e. the building), and then shift more of the burden over to the land side. Economists tend to really like this model because taxing buildings/improvements can discourage property investment and development, whereas taxing land doesn’t impact supply. The supply of land is fixed.

    So in the context of affordable housing, land-value taxation is thought to be a way to encourage more development and to increase the supply of new housing – which is usually a good way to keep home prices in check.

    Here’s how Ingrid Gould Ellen described it:

    …a land tax would discourage speculators from hoarding
    undeveloped land and incentivize them to develop their parcels to the
    full extent allowable. Regardless of whether a parcel sits vacant, houses a
    partially occupied, one-story retail strip, or holds a 30-story apartment
    tower, the annual tax bill would be the same. By switching to a land tax,
    a city could therefore increase the supply of housing and, by doing so,
    reduce prices across the board.

    But I can’t help but wonder if this isn’t more applicable to cities or areas that are currently struggling to encourage development. For instance, would boom town Toronto really benefit (in terms of affordable housing) from a tax change that ends up encouraging more high-rise development?

    It also strikes me as being exceptionally difficult to implement, particularly in city like Toronto that is growing and changing so quickly. Is it reasonable to ask the owner of a small downtown parking lot to being paying property taxes as if a 90 storey supertall had been built on top of it? Because that is the reality in some parts of this city.

    And if we opted to phase in this new land tax, would it then become a game of arbitrage where developers look for properties with the lowest land taxes but the highest achievable densities?

    Finally, I wonder if it wouldn’t exacerbate some of the problems that already exist in rapidly growing cities, one of which is the preservation of smaller heritage buildings in centrally located neighborhoods:

    In the case of a split-rate tax,
    the losers will be owners of parcels with high land-to-building value
    ratios, or owners of small buildings on valuable, centrally located parcels,
    who will likely see an increase in their tax bills after the switch to
    a split-rate tax.

    Land-value taxation is something that I’ve been thinking about for a number of months now. But I am struggling to come up with a decisive position. If you have any thoughts on this, it would be great to hear from you in the comments.

  • The Next Urban Renaissance

    The Manhattan Institute for Policy Research has just published a free book called, The Next Urban Renaissance: How Public-Policy Innovation and Evaluation Can Improve Life in America’s Cities.

    Here’s an excerpt from the foreword:

    This collection of essays brings together the best ideas from scholars with expertise across a broad spectrum of urban issues. The common theme of the papers is to innovate, evaluate, and leverage the remarkable private talent that is so abundant in America’s great cities. Public capacity is sharply limited; the ingenuity of urban entrepreneurs seems practically boundless. Local governments should be more entrepreneurial and do more to use the talents of the entrepreneurs around them.

    As a further preview, two of the ideas suggested in the book include: 1) reducing or eliminating parking requirements for new developments (which is something I’ve written about before on ATC) and 2) implementing a split-rate property tax for land and its improvements.

    If you’d like to download the free PDF, click here.

  • The economic benefits of a winning sports team

    Jays Game 2 by Charles Bodi on 500px.com

    https://500px.com/embed.js

    I was having round 1 of (Canadian) Thanksgiving dinner with my father on Saturday night and we inevitably started talking about the Blue Jays.

    As I write this post, the Blue Jays are down 2-0 in the ALDS, but by the time you read this email in your inbox (assuming you subscribe), game 3 will have already happened. Either the Jays will be on their way to a great comeback or the season will be over. I am remaining fiercely optimistic.

    But in addition to the regular sports chatter, we also started talking about the possible economic benefits of the Blue Jays winning and being in the playoffs for the first time in decades. 

    We assumed that 50,000 people buying tickets, heading downtown, and spending money on food, alcohol, parking, transit, taxis, and hotels, would be a great benefit to the local economy. And immediately I thought to myself: this would make a great blog post.

    But it turns out that the local benefits of professional sports aren’t so clear cut.

    There’s been a lot of research on public funding for sports stadiums and a lot of the research suggests that it may not be in the best interest of taxpayers. A considerable amount of the spending does not get retained by the local economy and instead gets siphoned off to the respective league and to concentrated private interests.

    But Toronto already has the SkyDome, I mean, Rogers Centre. It’s a sunk cost. So looking forward, there must be some incremental benefits.

    Well, a recent article in the Chicago Tribune asked this same question in light of the Cubs heading to the playoffs. And it turns out that it’s also not so clear cut.

    Part of the problem is something called the “substitution effect.” When a sports team starts winning (and people jump on the bandwagon), money is simply redirected away from other forms of entertainment towards sports entertainment. In other words, instead of going to see a movie or going to the museum, people go to the game.

    In fact, a 2001 study by Dennis Coates and Brad R. Humphreys called, “The Economic Consequences of Professional Sports Strikes and Lockouts”, found that during sports stoppages, 37 metro areas with professional sports franchises actually experienced no negative financial impact. And in many cases they performed better.

    Interesting.

    Having said all this, there’s a powerful sense of solidarity that takes over a city when everyone is rooting for the same team to win. And that’s hard to attach a value to.

  • Fred Wilson on where the New York tech ecosystem is heading

    Venture capitalist Fred Wilson is the poster boy for the New York tech industry. And this morning he posted an interesting video on his blog of a recent talk he did at Google NYC.

    At the 4:50 mark he begins talking about the evolution of the tech sector in New York and how it became what is probably the second most active startup hub in the United States.

    Given yesterday’s post on talent and the recent CityAge conference I participated in, I thought this video would make a great follow-up. There’s talk of lifestyle, diversity, gender equality, and talent within cities.

    Fred is heavily involved in growing and improving computer science education in New York, which is a perfect example of how cities can better leverage the people and talent they already have – as opposed to just focusing on bringing in new talent. Coding is a valuable skill to possess.

    I also found it interesting that Fred ended up in New York precisely because his wife wanted to live in New York. And that had a lot to do with all of the things you can do in the city, outside of work.

    If you can’t see the video below, click here.

    [youtube https://www.youtube.com/watch?v=_fZCrasNIfQ?rel=0&w=560&h=315]

  • Last call at the bar

    Earlier this week I attended the CityAge conference here in Toronto and participated in a panel discussion about talent. 

    The questions were all about how cities can attract and retain talent, and how they can best leverage the talent they already have. These are questions that a lot of cities around the world are thinking about.

    In my responses I talked about things like transit connectivity, which is a problem that all of us in Toronto recognize we have. But I also focused a lot on quality of life, on sense of place, and on being a cool place to live. These are important factors.

    The example I then gave is Berlin. Some say Berlin is now over. But for many years Berlin has been dubbed one of coolest cities in the world. And I personally think a lot of that has to do with the arts, culture, and nightlife scene that emerged in the 90s. 

    But this wasn’t a government initiative to make Berlin a hub for talent. It was largely a grassroots movement that took hold for a myriad of reasons, one of which was simply empty buildings that people could colonize for parties. And it transformed the place into a city that later became known as “poor but sexy.”

    That brought me to another point, which is that Toronto’s 2AM last call at the bar is laughable by global city standards. And we know that. That’s why whenever we host an event of any sort of notoriety – such as the Toronto International Film Festival – we extend it to 4AM. The people coming here from all around the world expect that.

    This may seem like a small thing. And I am sure many of you here in the city would like things to stay just the way they are. But I think we need to loosen up.

  • Multiple representation

    house by Edoardo Panella on 500px.com

    https://500px.com/embed.js

    If you’ve ever bought a property, you might be familiar with something called “multiple representation.” It’s when one real estate agent represents both the seller and the buyer for a particular transaction. It may also be called “dual agency.”

    The reason this can happen is because, here in North America at least, real estate sales are typically done with two agents: a seller’s agent and a buyer’s agent. The real estate commissions are (directly) paid by the seller to the listing brokerage, but it’s usually split between both brokerages and agents involved in the transaction.

    However, if you’re an agent-less buyer and you happen to come across a property that you like on your own (perhaps by browsing around online), the selling agent will likely ask you to also sign a representation agreement with them. And that means entering the world of “multiple representation.”

    Here’s some of the wording that the Ontario Real Estate Association uses:

    MULTIPLE REPRESENTATION: The Listing Brokerage has entered into a Buyer Representation Agreement with the Buyer and represents
    the interests of the Seller and the Buyer, with their consent, for this transaction. The Listing Brokerage must be impartial and equally protect
    the interests of the Seller and the Buyer in this transaction. The Listing Brokerage has a duty of full disclosure to both the Seller and the Buyer,
    including a requirement to disclose all factual information about the property known to the Listing Brokerage.

    But I don’t understand how this can work.

    You now have a sole agent that is supposed to act as a neutral facilitator between (1) a party that is paying them all of their salary for the transaction (and which increases as the selling price goes up) and (2) a party that just came off the street (and where there’s no preexisting relationship).

    That’s why multiple representation scenarios always make me uncomfortable. Real estate already has too many information asymmetries for my liking and this feels like a conflict of interest in almost all of the cases. I guess that’s why they are not allowed in many states in the US.

  • Guest Post: How We Changed Toronto

    This past summer I participated in a Jane’s Walk here in Toronto, where I was the only speaker to advocate for removing the eastern portion of the Gardiner Expressway.

    After my short talk I was feeling a bit like the black sheep of the group. Either nobody felt the same way as me, or nobody was willing to speak up. Most of the other people there seemed more enamoured by architect Les Klein’s “Green Ribbon” proposal.

    But as I put down the megaphone and began walking to the next stop, a man came up to me. Truthfully, I didn’t know who he was at first, but he reassured me that it was the right thing to do. The Gardiner East should come down.

    Eventually he gave me his business card. On the front it said: John Sewell. And as soon as I saw that I said out loud: “I know this name!”

    John Sewell was a member of Toronto City Council from 1969 to 1984 and was Mayor of Toronto from 1979-1980. Today, he is a Toronto activist and has written dozens of books, mostly relating to urban issues.

    His latest book, released last month, is called: “How We Changed Toronto – The inside story of twelve creative, tumultuous years in civic life, 1969-1980.”

    And today I’m delighted to share a guest post that he has written for Architect This City. The focus of his post below is on the importance of community participation in the planning process and how it was used in this city in the 1970s.

    If you’re a developer, this post might scare you. I think there’s often the perception that communities will generally oppose any sort of development. But there are developers in this city, such as Westbank, which have been taking a more proactive approach to community consultations. And it appears to be working for them. So maybe this is something we should be talking about.

    If you have any thoughts on this, let’s have a discussion in the comment section below. I hope you enjoy the guest post. Thank you again, John.

    _________________________________

    Transportation plans, redevelopment schemes, urban expansion: municipalities address big issues like these in several different ways. A staff report can be requested; consultants can be called in; a competition can be held.

    The device used most successfully by Toronto City Council in the 1970s was a committee of citizens working directly with city staff and council members. It produced enormously successful results, as I recount in my new book `How We Changed Toronto’, but sadly it is rarely used in the 21st century.

    In 1970 City Council appointed a working committee of local residents and several councillors to create a new plan for the Trefann Court Urban Renewal Area, a neighbourhood that had been fighting the city’s plan of demolition for half a dozen years. With the help of a city planner hired specifically for this task, a new plan satisfactory to the different factions in Trefann was hammered out within a few years, then successfully implemented.

    In 1973, when the new Council pondered how to rethink a downtown designated for more office towers, it appointed the Core Area Task Force, a body of community representatives and developers, to give direction to city planners as a new approach to the downtown was devised. The result was the remarkable Central Area Plan which encouraged housing downtown and mixed uses, put an end to windy plazas, and generally created an environment that was active and felt comfortable to anyone on foot.

    In 1974, as Council faced the problem of how it would redevelop 45 acres of wasteland on the edge of the downtown, it appointed a working committee of concerned residents and councillors to give direction to city staff. It’s fair to say that no one had a good idea of how the site should be developed, but the working committee and city staff conceived a brilliant plan which was quickly executed – the first new building was under construction within two years of the working committee being established – and the neighbourhood, now known as St. Lawrence, remains one of the great successes of the latter half of the 20th century.

    From the 1980s onward, City Council has touted the idea of citizen participation, but confined that activity to public hearings on decisions recommended by staff. That generally is the practice today, although open houses have been added, as though showing people plans and getting informal comments is a good way of involving people.

    What’s lost in public hearings and open houses is the creativity that a group of committed, diverse individuals can bring to a problem when they meet together over a number of weeks and months. The members of the group know the local scene but they aren’t experts, so they must be advised by planners and other professionals about the issues they should address, the pitfalls of some options, and the trade-offs available before decisions are taken. It is an open ended process fueled by debates about different opinions, but held together by a common purpose and the realization that those around the table are playing an important role in shaping the direction of the city.

    The working committee that started meeting in Trefann had no clear idea in advance of what the plan it finally arrived at would look like. It was the same with the Central Area Plan, the St. Lawrence community, and the other processes in the 1970s which I touch on in the book. The process that the politicians, staff and residents committed themselves to made all the difference.

    One reason this kind of process is not employed much today is because too many elected figures take an ideological approach. They think they have the answers which they have been elected to implement, rather than to establish ways in which many more minds can be involved in seeking results which are widely agreed on.

    As well, city staff are not seen as independent professional advisors serving the public at large, but as a part of a corps serving the mayor and city councillors. In the 1970s in Toronto there was a clear separation between the politicians and the administration, and there were frequent (and welcome) debates on the floor of City Council between the two factions. Both were there to serve the public although they might have different ideas of how that should be done. This kind of tension was seen as entirely appropriate.

    In Toronto (and probably other cities) the situation is now even more complicated as councillors see themselves not as public servants for a few years, but rather as individuals with a lifetime commitment to holding public office. Too many members of Toronto City Council have been there for more than 15 years, and they fear that taking a principled stand on an important issue might result in the worst of all possible outcomes, their defeat. They decide not to take on the big issues.

    Toronto is currently facing significant problems.  The downtown is being overrun with new tall condo towers, for which the city does not have the infrastructure, and the new housing is not designed to meet the needs of future residents. It is the perfect opportunity for a new look at the Central Area Plan, using the same mechanisms as in the 1970s: a holding bylaw so the new plan won’t be pre-empted by development applications; a citizen-led task force including some councillors, advised by city staff. Who knows what brilliant plan an open ended process can recommend?

    Another problem is money. Toronto does not have enough money to upgrade its transit system or repair the affordable housing it owns, let alone build the new affordable housing it needs. The demands of the mayor that other governments should pay are understandably disregarded. It is time that the city had its own revenue sources, and what better than a citizen led initiative to point the way?

    It’s the same with a plan to build the affordable housing the city needs, to ensure development activity enlivens the near suburbs, to put some restraint on the continued low density subdivisions which are being unrolled far beyond the city’s borders, to restructure the megacity into something which works for the different communities within the city. These challenges all need strong citizen driven processes.

    As I recount in `How We Changed Toronto’, the 1970s really did change Toronto for the better. The city has been coasting ever since on those successes. It is time for renewal, and using the successful mechanisms from forty years ago is something worth doing.

    -John Sewell