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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Tag: canada

  • Messy intersections

    I am not a transportation engineer, but sometimes I like to, you know, pretend. And lately, I’ve been thinking about how to better design the Toronto intersection of Dundas, Dupont, Annette, and Old Weston (which I touched on briefly over here). It’s a weird 5-point intersection that is often cited as one of the most confusing in the city. And so there’s a lot that could be done.

    Here’s what it looks like today:

    The centerpiece is the Dundas-Dupont Traffic Island, which is actually a city-owned park. It’s not the most generous green space, but the real problem with this park is that it’s very much an island. There’s really only one pedestrian access point — its north end. For the most part, you need to be unlawful in your movements on and off it.

    This is a fairly common occurrence in cities. The island is, almost certainly, a remnant space. It was never explicitly designed; it is just what was left over after they figured out how to connect all of these streets and negotiate the intersection’s grade changes.

    The other signal, that these are remnant spaces, is the paint markings on the street. Their main job is to tell cars where to go. But they’re also unproductive spaces. Nobody is intended to actually occupy them. So what they really say is, “we have too much road and we didn’t know what to do; so we just painted them.”

    If you watch the below video of Claire Weisz (founder of WXY Studio) explaining the work that she has done in New York City, you’ll see remarkable similarities to what I’m talking about here. This sort of thing happens all the time, especially at messy intersections where multiple streets converge. The objective was to connect the streets and the rest became a byproduct.

    But when properly designed, these spaces actually become better for everyone: drivers, cyclists, and pedestrians. And this Toronto intersection strikes me as a perfect candidate. So if my local Councillor Gord Perks is reading this post, I would ask him to do what he can within the city to encourage this kind of positive change.

    And not just here, but wherever there is a street that sucks.

  • Real estate is a byproduct of economic growth

    I sometimes wonder if I wasn’t born and raised in Toronto if I still would have gone to architecture school and become a real estate developer. I mean, if I grew up in Paris, maybe I would have become a fashion designer. Or if I grew up in Park City, maybe I would have started a snowboard company, slash become a ski bum. I would enjoy doing all of these things. And places certainly do influence us, more than most of us probably appreciate.

    My point with all of this is that Canada likes to somewhat paradoxically over index on housing. I say paradoxically because we never seem to have enough of it for Canadians — certainly the affordable varietal — and yet:

    “Canada relies heavily on its real-estate sector to power the economy. Housing investment in Canada as a share of gross domestic product reached 8.9% in 2022, according to the Organization for Economic Cooperation and Development, much higher than the 4.8% on average for the 38 member countries in the OECD.“

    If you look at all of the industries that make up the Canadian economy, “real estate and rental and leasing” is at the top with 13.01% of GDP (as of 2020). And if you add “construction” on top of this, the total is about 20.09% (again, as of 2020). This feels suboptimal. And I say this as a developer and builder of real estate.

    Real estate is largely a byproduct of economic growth. When someone starts a business and then needs something like an office or a warehouse, that is a positive thing for the economy. Jobs are being created by the business and further jobs are being created by the people who will deliver the space they need. But if you aren’t creating new jobs in the first place, then just dealing in real estate will only take you so far.

    Immigration helps, but it can also create a mirage of growth and prosperity. If you look at real GDP growth across the G7 from 2019 to today, Canada looks pretty good. We’re second (+4.5%) only to the US (+8.9%). But if you look at GDP per capita over the same time period, we’re dead last (-2%), whereas the US remains on top (+7.2%).

    I’m not an economist; I just build things. But in my opinion, this is a problem. We should be doing everything we can to foster a stronger culture of innovation and entrepreneurship in this country. We have the talent. I mean, Ethereum has roots in this city! We just need more people turning this intellect into wonderful new companies.

  • Rear-yard suites and secondary suites built in Toronto over the last decade

    Here is a mapping, from the University of Toronto’s School of Cities, showing the number of “closed” building permits issued in Toronto between 2013 and 2023 for both rear-yard suites (laneway houses and garden suites) and secondary suites (like basement apartments).

    A “closed” building permit probably means that construction is complete. However, it is not uncommon for a permit to inadvertently remain open. This happened to me with Mackay Laneway House. The permit was supposed to be closed, but it wasn’t.

    So here’s the same mapping with open (i.e. active) permits also turned on:

    Three things immediately stand out:

    1. Secondary suites seem to be somewhat evenly distributed across the city.
    2. Rear-yard suites are heavily concentrated in the older areas of the city, flanking the downtown core.
    3. North Toronto is wealthy and isn’t having either of these housing typologies.

    Looking at these mappings, it probably seems like a decent amount of new housing. But that’s not really the case:

    • From 2013 to 2023, Toronto issued 2,209 building permits for secondary suites (1,525 have been closed and 684 remain open as of December 31, 2023).
    • And from 2020 to 2023, Toronto issued 898 building permits for rear-yard suites (192 have been closed and 706 remain open, which does suggest some increased adoption). Rear-yard suites only became permissible in 2018, which is why the date range is shorter.

    To be fair, I would imagine that many secondary suites get built without a building permit. So I think the above number is probably underestimating actual supply. But even still, it doesn’t change the conclusion: A lot more needs to be done to increase the supply of new housing in Toronto.

  • How would you make this street better?

    Let’s resume looking at sidewalks and public spaces.

    If you look in the City of Toronto’s Official Plan for the stretch of Dundas Street West that runs between Dupont Street and Bloor Street West, you’ll find a map that looks like this:

    Red signifies “Mixed Use.” And so if you were to just look at this map, you might naturally assume that, in the real world, this is a continuous main street that connects The Junction neighborhood down to Bloor. But that’s not actually the case. Instead, it looks like this:

    Because of the rail corridor on the east side, it is a single-sided street. And generally speaking, these don’t make for the best retail streets. But it also has narrow sidewalks and a compromised public realm. If you go back to the map I shared yesterday, you get this:

    I don’t think 30cm is entirely accurate here, but that’s beside the point. What matters is that this is just one of many examples in the city of a discontinuous public realm. (Here’s another, undignified example, from Parkside Drive.)

    Over the years, there have been a number of design concepts proposed. Below is one by Brown + Storey Architects that was done I don’t know how many years ago. Their proposal widened the sidewalks along this stretch, and added bike lanes. They also proposed a roundabout at the intersection of Dundas, Dupont, and Annette, which is another matter that needs addressing.

    But none of this has been implemented and I don’t know of any plans to do it. When we were going through the rezoning process for Junction House, we were made aware of some transportation studies that had been done for the above intersection. But that’s about it. There wasn’t an actual ETA.

    However, now that my commute consists of walking up and down this part of Dundas, I’ve been thinking more about how it could be improved.

    I think there’s no question that the sidewalks need to be widened. It would also be helpful if there were crosswalks to facilitate getting off the south end of this exotic island:

    But equally important, I think that something should be done about the single-sided nature of the street. Given that there’s limited width, my mind immediately goes to shipping containers, or something similar, to start activating the east side of the street.

    This has already been done further south on Dundas (east of Bathurst):

    And it could work here too. Already there’s a Blondie’s Pizza anchoring the south end of this stretch (really fantastic pizza, by the way):

    But I would love to hear your ideas, as I’m currently in the market. I also don’t think that you necessarily need to be from Toronto in order to comment. Great streets are great streets. So if it were up to you, what would you change, if anything, about this part of Dundas Street West? Let me know in the comment section below.

  • Interest rates are expected to start coming down this summer

    Last week was “forum week” in Toronto. (That is, it was the Toronto Real Estate Forum.) And as is the case every year, Benjamin Tal, deputy chief economist of CIBC, opened up the event with his usual macro view of the world. For those of you who missed it (as I did), here are some of his key points (via RENX):

    • The Bank of Canada’s overnight rate will ultimately/likely settle into the 2.75-3% range (currently it sits at 5%). He expects rates to start coming down this summer.
    • Inflation is down, but we’re not yet at the 2% target. The “last mile” is always the toughest.
    • But as we know, the BofC will take a recession over high inflation, any day.
    • The mortgage market has fallen faster than in the early 90s recession. Tal said that the residential real estate market in Canada is right now facing “the biggest test” since then.
    • Canada is in what he calls a “per capita recession”. But for the million or so immigrants that the country accepted over the last year, we’d be in a full-blown official recession.
    • Finally, he called this correction in the housing market both “real” and “healthy”; he spoke about normalcy returning in 1-2 years; and he posited that the market will be “crazy” when it does return because of a supply deficit.

    This last point is an important one. New housing supply is mostly shut off right now. I say mostly because there are obviously still projects under construction, and there have been and there will continue to be some successful launches. But by and large, most developers are waiting right now, principally because the absorption isn’t there. They have no other choice.

    But Canada continues to grow. People from around the world continue to want to move here. And there continues to be a need for a lot more new housing. So when the market does return — and it, of course, will — there is going to be a supply-demand imbalance. And as is always the case in real estate, there will be a lag in responding to this imbalance.

    This is what Tal means by “crazy”.

    Photo by Wiktor Karkocha on Unsplash

  • We’re getting fatter

    I know I know this, but this is still an alarming chart:

    This is saying that, as of 2016, over 36% of Americans were considered to be obese. In Canada, the number was just under 30%. And in the UK, it was just under 28%, which is the highest rate in Europe.

    We often talk about the health benefits of living in a walkable community. And there’s lots of research to back up that this is in fact the case: obesity rates tend to be inversely correlated with higher prevalences of active transportation (walking, cycling, and so on).

    But we also can’t ignore diet. And here’s what has happened in the UK, as well as in other Western countries:

    An increased reliance on cheap, ultra-processed food, which accounts for 57 per cent of what Britons eat according to a 2019 study conducted by researchers at the University of São Paulo, suggests that the health crisis is unlikely to change anytime soon without intervention, argue campaigners.

    It can be hard to eat healthy, especially if you don’t have a lot of money and you live a busy life. But in my view, we need to change the course of this graph. And two very good places to start looking would be (1) our built environment and (2) the Japanese diet.

    Actually, now that I think of it, Japanese cities would be a good place to look as well.

    Chart: FT

  • En province

    As many of you know, I am learning French, again.

    One of the small things that I found really interesting in this week’s class — besides, of course, figuring out how the hell to use le subjonctif — was the expression “en province.” In France, this effectively refers to any place in the country that isn’t Paris — the capital city/region. And it turns out that many other countries employ a similar kind of vocabulary.

    According to Wikipedia, people in Peru say “en provincias”, people in Mexico say “la provincia”, people in Poland say “prowincjonalny”, and people in Bulgaria say “в провинцията”, whatever that means. What is fascinating to me about this is that it implies a very capital and urban-centric mentality. You’re either in the capital city or you’re, well, in the provinces.

    It’s also not something that is used in either Canada or the US. In Toronto, you’ll hear people say that someone is “up north” and, in Philly, you’ll hear people say “down the shore” to indicate that they’re headed in the general vicinity of the east coast. But as far as I’m aware, there isn’t a specific term that is used to describe any and all lands that exist outside of our capital cities.

    Maybe it’s because Ottawa isn’t our biggest city and so it would be silly to designate everything outside of it as being some sort of provincial non-capital territory. But I wonder if part of it is because we don’t have the same urban-centric mentality. Could it be that we just don’t value and think about our principal cities in the same way?

  • Should more people live together?

    We know that, for a variety of reasons, more and more people are living alone. As of 2018, single-person households represented about 28% of all households in the US. This is up from 13.1% in 1960.

    Here in Canada, single-person households became the predominant household type in 2016 (we’re also at 28%) for the first time in Canada’s 150+ year history. And the numbers are even higher for some European countries. In Finland, Germany, and Norway, more than 4 in 10 households are single-person.

    Part of this has to do with people living longer. In Canada, 42% of people aged 85 or older (and living in a private household) live alone. But part of this is also cultural. Japan has one of the oldest populations in the world, but it doesn’t have the highest percentage of single-person households. Although, the number is relatively high and increasing. It’s nearly 40%.

    Whatever the case may be, you could argue that there appears to be some sort of global trend line toward more people living alone. But here’s an important question: Is this a good thing?

    Albert Wenger recently argued in this blog post that, actually, we need new forms of living together. Whether it’s multigenerational living or coliving with like-minded friends, there are clear benefits to living with other people. You get to share resources. You get elders that can look after kids. And you get company.

    There’s also an opportunity to curate your environment. As Phil Levin puts it on his coliving blog Supernuclear: “If your home is filled with motivated people, you will be more motivated. [And] if your home is filled with funny people, you will laugh more.”

    Albert posits that office conversions (which are obviously in vogue right now) could serve as an opportunity to rethink our built environment around coliving. And while this is certainly true, I’m not sure we need it to happen. There are ways we can live together today, within our existing environment, if we want to.

    The question is: do we?

  • Toward a culture of innovation and entrepreneurship

    One way you could oversimplify the Canadian economy is to say that it revolves around three things: natural resources, real estate, and high immigration. (You can tell me I’m wrong in the comments below.) More recently, we’ve also been touting the growing number of tech workers in our cities. But in some ways this is a bit of a vanity metric. 

    I think of it in terms of two different categories of workers. There are tech workers that are the result of foreign companies opening satellite offices to take advantage of the weak Canadian dollar and our more enlightened immigration policies. And there are tech workers that are the result of Canadian-based companies innovating, growing, and needing more talent. Think Shopify.

    The former situation is not at all bad, but a lot of the value is going to accrue outside of the country. Whereas in the latter situation, we get to be the principal recipients and we get all of the positive externalities associated with innovation and entrepreneurship. One of these is a powerful compounding effect. Successful startups tend to beget even more new companies. 

    So even though I work in and benefit from one of the three things that I mentioned at the beginning of this post, I believe that we need to be much better at encouraging a culture of innovation and entrepreneurship in Canada. We’ve become too complacent.

    This is a critically important topic that we don’t seem to be talking about nearly enough. So I plan to do more of that here on the blog.

  • Canada’s tech talent strategy

    This past week at Collision Toronto, Canada unveiled a new “Tech Talent Strategy” that includes a number of initiatives designed to attract more human capital across the science, technology, engineering, and math sectors. (Sidebar: The STEM sectors are great, but I’m really a fan of STEAM.)

    At a high level, these measures are intended to continue to grow Canada as a hub for global tech talent. So they cover things like promoting Canada as a destination for digital nomads, improving the Start-up Visa Program, and dunking on US immigration policies by creating an open work permit stream for H-1B specialty occupation visa holders.

    Overall, it seems great.

    But there are people who are concerned about the pace of immigration in Canada. Over the past year (ending in Q2-2023), the country added about 1.2 million people. This is a record. And perhaps the greatest concern, is that we simply aren’t building enough housing and related infrastructure.

    But I don’t get this logic. Canada is a relatively small country. Attracting smart and ambitious people from around the world is good for us. And there are simple ways to address these concerns: build more housing and related infrastructure. I’m pretty sure that we can figure out how to do that.