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.
Barcelona is one of the densest cities in Europe. And Márton Mogyorósy’s recent photo series, called Barcelona from above, does an excellent job of demonstrating that. My favorite photo is this one here, showing La Barceloneta neighborhood adjacent to the beach:
None of the buildings are particularly tall (maybe 6 or 7 storeys at the most), but the streets are probably only about 6m wide, including sidewalks. This is one way that you can achieve density without height and it is a good example of what I was getting at in my post, European-style height, but not density.
The minutes from One Delisle’s Design Review Panel meeting were just published. They are public and available on the City of Toronto’s website, here. The project was on the December 13, 2018 agenda.
No project is ever perfect, but here are two paragraphs from the minutes that I think do it justice:
The Panel thought the proposal had an “iconographic landmark quality to it”. Numerous members pointed out that it’s (sic) siting at a transitional “hinge point” on Yonge St would also lend itself to iconic placemaking as well as a striking addition to the view down the Yonge corridor.
The Panel was excited to have this type of sophisticated design come to Toronto. Many members felt that the massing and design solution would be a powerful and beautiful addition to the skyline. Several members commented that the proposal could become “a building with a name” similar to landmark towers in London, England. One member suggested that Toronto could use more buildings with personality.
Lots of buildings, of course, have names. What is really being discussed is a building with an identity that resonates with people in a meaningful way and that becomes associated with a particular place.
But let’s not forget that being “iconic” is only one part of this equation. The goal here is ambitious architecture with genuine civic value. And if you’re at all familiar with the project and broader ideas for the block, I would hope that mission is clear.
I just discovered the work of Italian photographer, Paolo Pettigiani. He specializes in something called infrared photography, which is photography that captures the wavelengths of light that generally aren’t visible to us humans.
Paolo shoots with a full spectrum Nikon D750. What this means is that the camera’s sensor is sensitive to, well, the full spectrum of light: UV, visible, and infrared. Using this photography technique, he has coined something he calls “InfraScapes.”
The reason these photos look the way that they do is because anything with chlorophyll — such as grass and trees — really reflects infrared light. The result is a generally muted landscape with pops of pink. Perhaps this could be used as a technique to visually evaluate the greenness of our cities.
Last weekend I went by Sidewalk Toronto’s “experimental workspace” at 307 Lake Shore Blvd East. It is open to the public every Sunday from 11am to 5pm if you’d like to drop in.
This week they had their #BuildingRaincoat on display, which is an adjustable awning system designed to protect public sidewalks, mitigate the impacts of adverse weather, and improve outdoor comfort.
Also installed were a number of the paving systems that they are currently piloting. They’re working with over 20 different vendors to try and create the “holy grail” of street paving.
They define that as a system capable of the following four key features: modularity, heating, lighting, and permeability. Here’s an example of what one of them looked like (it was snowing at the time and, yes, Doc Martens):
With modularity, the goal is to make it possible for a single person to be able to pull up and replace one of the hexagonal slabs. This would dramatically change how we repair and patch our roads. Supposedly, they’re also more resistant to cracks, which means fewer potholes.
The key benefit of a heated paving system is an obvious one. When needed, their test system automatically heats the slabs to 2-4 degrees celsius in order to melt any snow and/or ice. That’s as warm as you need apparently.
They have two heating systems running at 307. The first is hydronic (fluid in pipes just below the pavement) and the second is conductive heating (thin conductive film in or under the pavement).
I’m sure many of you will be questioning the environmental and carbon impact of a heated public realm. And that is certainly a good question. But the status quo in this city involves about 131,000 tons of road salts per year. That’s a problem.
The lighting feature is pretty neat because there are a variety of different use cases beyond just demarcating space. One example that Sidewalk gives is that it could be used in a bike lane to tell you how fast you need to ride in order to hit all green lights.
Finally, permeability matters because it minimizes runoff and allows water to be absorbed in situ. The tradeoff is that it makes the slabs structurally weaker. So that is still being worked on.
I am thrilled to see this sort of urban innovation taking place right here in the city. If you haven’t already, I recommend checking out 307.
It turns out that the injury and fatality rates on the Autobahn — measured per billion vehicle kilometers traveled — are actually relatively low compared to urban and rural road classes.
It is also relatively low compared to international standards. Here is a 2012 comparison, also via Wikipedia:
Europe as a whole does very well in this regard (not that this specifically addresses Autobahn safety). Generally, fatalities have declined significantly over the last few decades.
As I am sure you have all heard, there’s a lot of debate in New York right now (city and state) about whether they should reject Amazon’s decision to open up a new headquarters in Queens.
Urbanist Richard Florida has been arguing that one of the richest companies in the world shouldn’t be receiving taxpayer subsidies and that Amazon should do the right thing here. They should open up in New York but without any inducements.
As a counter argument, Kenneth Jackson, professor of history at Columbia University, recently opined that this is actually business as usual. American cities have a long history of competing for companies because the benefits outweigh the costs over the longer term.
Here is an excerpt from his op-ed in the New York Times:
They are right about one thing. It is absurd that any city would agree to such a deal. But this is how the game is played. Paying companies to relocate has been the American way since 1936, when Mississippi established the nation’s first state-sponsored economic development plan. Under that plan, since followed by many other jurisdictions, cities and states agreed to pay companies to relocate by promising them new factories and low or nonexistent taxes. With those inducements, numerous businesses relocated in the decades after World War II, usually from the union-dominated Northeast and Midwest to the business-friendly South.
According to Amazon’s recent annual 10-K filing, the company leased and owned (most of their space is leased) about 288,419,000 square feet of space around the world at the end of 2018. Of this number, about 80% is used for “fulfillment, data centers, and other.” Amazon doesn’t break out this line item any further, but GeekWire reckons that a good 3/4 of their real estate is dedicated to their fulfillment warehouses.
Here’s the full summary of their facilities (from the 10-K filing):
Given that fulfillment is such a large share of their properties, I am most interested in understanding the geography of their warehouses and how that impacts their core value proposition, which is largely all about convenience.
In the early days of online retail, the decision of where to warehouse had meaningful tax implications. Because (in most cases in the US?) you only had to collect sales tax if you had a physical presence in the same location as your purchasers.
As that changed, it then made more sense to create a broader distribution network and minimize the distance between fulfillment center and purchaser. By 2016, Bloomberg estimated that nearly 78 million Americans lived in a zip code where Amazon offered free same-dame delivery. That number has obviously increased since.
And in the paper “Economies of Density”, they discovered the following cost savings as a result of Amazon’s growing fulfillment network:
We find that Amazon saves between $0.17 and $0.47 for every 100-mile reduction in the distance of shipping goods worth $30. In the context of its distribution network expansion, this estimate implies that Amazon has reduced its total shipping cost by over 50% and increased its profit margin by between 5 and 14% since 2006. Separately, we demonstrate that prices on Amazon have fallen by approximately 40% over the same period, suggesting that a significant share of the cost savings have been passed on to consumers.
The interesting question for real estate people and city builders — which is brought up in the Knowledge@Wharton podcast but is difficult to answer — is whether there are diminishing returns to this “economies of density” phenomenon. In other words, how dense does Amazon’s fulfillment network want to be?
The MIRA Tower in San Francisco is one of my favorite buildings by Studio Gang and probably my favorite tall building under construction right now. Here’s a video and a few photos from the San Francisco Chronicle’s urban design critic, John King:
Now that the MIRA Tower is well underway, I have to say that it looks even better than it did pinned to the walls of their Chicago studio. I can’t wait to see it in person once it’s complete.
The general media will pick up these numbers and tell you that there’s been a precipitous decline in the number of new condominium sales. But the reality is that 20,028 units were sold in 2018, which is actually in-line with 10-year averages for this region. 2017 was a particularly frenetic, and unsustainable, year.
The average pre-construction sold price for a new condominium in the former City of Toronto (the core) was $1,117 psf last year, and $921 psf across the broader region. These numbers represent significant double digit increases from the year prior. But again, what I don’t think many people appreciate is that the cost environment has also changed dramatically over the last few years.
Construction costs are way up, as are development charges and a myriad of other pro forma line items. The above numbers are simply a result of cost-plus pricing. Here’s where costs are at and here’s where we need to be to make the project feasible. Margins haven’t increased; in fact, they’ve probably been squeezed for many developers.
I think this is an important topic that deserves more transparency and visibility. So I’m hoping to work with a developer friend of mine and publish something more substantial in the coming months.
The Mayor’s Office of Media and Entertainment in New York City recently commissioned this report on the city’s nightlife economy. The study was completed by Econsult Solutions, the North Highland Company, and Urbane Development. (Full disclosure: I was a teaching assistant for the President of Econsult while at Penn.)
Here’s what they found:
The total economic impact of this industry is the sum of its direct, indirect, and induced economic impacts, as well as the ancillary spending impacts that are adjacent to nightlife activity. In 2016 (the most recent year where standardized datasets were available), the nightlife industry supported 299,000 jobs with $13.1 billion in employee compensation and $35.1 billion in economic output. This economic impact also yielded $697 million in tax revenue for New York City.
They also found that, between 2011 and 2016, the nightlife industry has outpaced the city’s overall economy. Nightlife establishments grew by a 2% annual growth rate. Jobs in the nightlife industry grew by a 5% annual growth rate. And nightlife wages have been rising by 8% annually – about double the average for the city.
I am a firm believer in the value of the nighttime economy. So I’m happy to see more people paying attention to it as of late. For the full report, click here.
