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.

Subscribe

Tag: development

  • Tridel unveils smart condominium in South Core

    A few weeks ago, Canadian developer Tridel unveiled its first “smart condominium” at Ten York – a recently completed 69 storey building in the South Core neighborhood of Toronto. Above is an archive photo of the building under construction. I chose this one because its siting between the Gardiner Expressway (left) and Harbour Street (right) is also noteworthy.

    Smart anything is one of those tech buzzwords that is, I know, starting to feel vapid. But Tridel has done some interesting things here with their Tridel Connect platform (a collaboration with SmartONE Solutions). And if you happen to also be in the business of designing and constructing multi-family buildings, I think you’ll find it to be a useful case study.

    At Ten York, you can now use your phone as a key fob. People buzzing up are shown to you on your wall pad so you can confirm identity. The suite entry doors use digital locks, which means you use an access code instead of a key. Additional codes can be created for family and friends or for service providers like dog walkers and cleaners. You’re also given a log of who has come and gone. And of course there’s an automated parcel delivery system.

    If you’d like to see all of the features in the live, I suggest you take a look at the “b-roll video” that was included as part of their press release. Tridel is excellent at implementing new technologies and I know that they frequently reserve test suites in their projects to try some of them out. This is a great thing for the industry and for consumers.

    Image: Tridel

  • Limits of housing affordability

    The San Francisco Chronicle recently published an article called, “SF residential projects languish as rising costs force developers to cash out.” It talks about the impact that rising costs (both construction and other) are having on new housing supply. Some developers aren’t building even though may have entitled sites. And that’s because the math doesn’t work, even though we’re in a market with a severe housing shortage.

    Here is an excerpt from the article that talks about the kind of pricing that is needed in order to make a project work:

    Chris Foley, a real estate investor and partner in brokerage firm Polaris Pacific, said that in the current construction environment a condominium developer needs to sell units for at least $1,400 a square foot for a wood-frame building and $1,800 a square for a taller, steel-frame midrise or high-rise. Even in a city where more than 80 percent of the population is priced out of the market, those numbers are a stretch, Foley said.

    San Francisco also has inclusionary zoning, which requires a certain percentage of units in any new development to be priced below market. According to the article, it is 18% for new rental projects and 20% for new condo projects. That’s a cost that needs to be absorbed by the remaining market rate units – so price accordingly. 

    The MIRA tower designed by Studio Gang is currently under construction and has 156 affordable units and 393 market rate units. The market rate pricing looks something like this:

    That’s the case with three buildings rising near the new Transbay Transit Center: Mira, the Avery at 400 Folsom St., and One Steuart Lane, which overlooks the Embarcadero at the foot of Howard Street. Unless there is a remarkable drop in the market, units in all three of those buildings will probably have an average sales price of more than $2,000 a square foot and penthouses could fetch $3,000 or even $4,000 a square foot. A 3,326-square-foot penthouse at 181 Fremont St., which opened last spring, recently sold for $15 million, or $4,500 a square foot.

    Projects being squeezed by rising costs is something that we are also seeing here in Toronto. And I don’t believe that the general public fully appreciates that there are limits to the costs that can be shouldered by new development. And the reason for that is because there are limits to what people can afford to pay for new housing.

    Photo by Jamie Street on Unsplash

  • How Singapore fixed its housing problem

    There are a number of affordable housing plans being thrown around in Toronto right now given that we have a municipal election coming up this fall. 

    From what I have read, the plans are largely centered around surplus and/or available public land and possibly some subsidies. 

    These subsidies are very important because the money has to come from somewhere. This is often overlooked.

    In light of these debates, I thought I would share a short Bloomberg video that my friend Evgeny shared with me this morning all the way from Tokyo.

    The video is about how Singapore fixed its housing problem. If you can’t see it embedded below, click here.

    [youtube https://www.youtube.com/watch?v=2cjPgNBNeLU?rel=0&w=560&h=315]

    It strikes me as being very Singaporean.

  • The real reason people oppose new development

    image

    A good friend of mine just sent me this fascinating research paper called: Opposition to Development or Opposition to Developers? Survey Evidence from Los Angeles County on Attitudes towards New Housing. It is a study out of UCLA that was published earlier this year by Paavo Monkkonen and Michael Manville.

    For the paper, they conducted a survey-framing experiment with over 1,300 people in Los Angeles County to test how strongly they felt about a number of common anti-housing sentiments; arguments such as traffic congestion, neighborhood character, and strain on local services. 

    However, they also introduced another argument: large developer profits. And interestingly enough, they discovered that respondents were 20 percentage points more likely to oppose a new hypothetical housing development when the survey was framed around the developer making a lot of money.

    Here is a table from the paper showing the various frames, as well as the percentage of people who supported, had no opinion, and who opposed. Note that under the “developer” frame, the opposition number is 48%.

    image

    So their “takeaway for practice” is as follows: “Housing opposition is often framed as a form of risk aversion. Our findings, however, suggest that at least some opposition to housing might be motivated not by residents’ fears of their own losses, but resentment of others’ gains.”

    Photo by Cameron Stow on Unsplash

  • Five year anniversary

    Today is the five year anniversary of this daily blog. That’s over 1800 posts. 

    It’s almost hard to believe that it has been that long. It seems like just yesterday I was on year 2 or 3. But at the same time, it’s almost hard for me to remember a time when I didn’t blog every day. I guess we’re calling it a habit at this point.

    One of the most common questions I get regarding this blog is: “Do you pre-write posts?” The answer is never. Okay, almost never. Sometimes I’ll pre-write a post if I know I’m going to be on a plane for 12 hours and I won’t make the timezone cutoff. But generally as a rule I don’t.

    Part of the reason I don’t is because it breaks the habit. This is something I do every day. And I like that routine. I also want the posts to be timely and I want to be able to write about things that may be on my mind that day.

    Momentum is a powerful thing. And when you’ve been doing something for a number of years, and especially something as public as this daily blog, there’s a powerful incentive to keep doing it. That’s how streaks work.

    However, in the world of development, five years is perhaps not that long. It’s maybe one project. Streaks take a lot longer to establish.

    This summer One Delisle by Studio Gang went public and you’re now starting to see (bright neon) teasers for Junction House. Both of these projects are many years in the making. The Junction House story started in early 2016.

    So I reckon that this blog needs at least another five years so that there’s enough time for the really juicy stories to surface. I’ll endeavor to do exactly that. 

    Thanks for reading and making this community what it is. See you tomorrow.

  • Photogenic neon in the Junction

    We just finished putting up some additional signage at the future sales office for Junction House. Clean and minimal, but fun. I am pretty pumped with the way everything turned out. Creative and photos by Vanderbrand. Instagram story mashup and failed neon photo by me.

    This week I learned that properly photographing neon takes a bit of work. The neon “Junction House” sign is actually all white when you see it in person. Apparently it has something to do with the frequency. 

    I’m going to go back one evening with my tripod and Fuji and see if I can do better.

  • The Future of Hamilton

    image

    As many of you know, we have a development project in Hamilton, Ontario – more specifically in the Corktown neighborhood. We filed our development application earlier this summer.

    Because of this I was invited to participate in a Bisnow event on The Future of Hamilton. It takes place the morning of Wednesday, September 12, 2018 in The Alley by Core Urban. I walked this space last summer while it was under construction and so I’m excited to see it finished.

    For those of you who aren’t familiar with Core Urban, they are doing some really great work in Hamilton and have established themselves as a responsible city builder with a focus on adaptive reuse projects.

    Steve Kulakowsky, who is co-owner of Core Urban, will be speaking at the event along with the mayor, some guy who has pretentiously included his middle name, and many other smart people. To see the full list of speakers and to buy a ticket, click here.

    Photo of Hamilton by Vivek Trivedi on Unsplash

  • Planning staff reports

    A bunch of people have asked me lately about what they should do if they want to get smarter on land use planning and on the entitlement process for development projects. It was specific to Toronto, but I don’t think my answer is specific to only this city.

    I took a few planning classes in graduate school when I was in the US. But I was more focused on architecture and real estate, and so I did not leave school an expert by any means.

    I learned about the failures of euclidian zoning and about things like the Low-Income Housing Tax Credit, which always seemed like a sensible supply-side tool to get the private sector to invest in affordable housing.

    But what I have found most useful is to just read planning staff reports. These are the responses to actual development proposals and they show you how staff interpret the policies that are in place and how staff apply them to real buildings.

    I may be in the minority in that I actually find these reports interesting. But regardless, they are a great crash course in planning and development approvals and they can help you manage your entitlement risk.

  • North American cities with the most construction cranes

    Rider Levett Bucknall recently released its RLB Crane Index for Q3-2018. Here are the top 10 cities in North America (table via the New York Times):

    For the third consecutive reporting period, Toronto has taken the number one spot at 97 cranes – 85 of which are being used on residential projects. 

    I’m not at all sure how the study defines “mixed-use” projects. But given that Toronto only has 2 of them, it must not include projects with grade-related retail.

    Across North America, residential and mixed-use projects (whatever they are) make up approximately 70% of the total crane count. 

    I am surprised that Miami didn’t make the list.

  • A global hub for urban innovation

    Dan Doctoroff, the CEO of Sidewalk Labs (and the former deputy mayor of New York City), was recently interviewed by BNN Bloomberg about the company’s plans and ambitions for Quayside here in Toronto. 

    He talks about the project; their interest in timber construction; how the company, Sidewalk Labs, might ultimately make money; and how their mission is to create a global hub for urban innovation.

    This last point is, of course, the most exciting opportunity – both for Sidewalk Labs/Alphabet and for Toronto. And it’s why many people believe that Quayside will end up a far greater (economic development) coup compared to HQ2.

    The interview is only 10 minutes. If you can’t see it embedded below, click here.

    https://webapps.9c9media.com/vidi-player/1.5.1/share/iframe.html?currentId=1461888&config=bnn/share.json&kruxId=InSaVlLc&cid=%5B%7B%22contentId%22%3A1461888%2C%22ad%22%3A%7B%22adsite%22%3A%22ctv.bnn%22%2C%22adzone%22%3A%22ctv.bnn%22%7D%7D%5D