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: development

  • Building new, better cities

    Earlier today my friend Saadat sent me the following tweet:

    //platform.twitter.com/widgets.js

    It’s a link to a new research project by Y Combinator – the famed Silicon Valley seed accelerator. They want to explore the possibility of building new and better cities.

    I don’t have the time for something like this, but if any of you are city experts (I know a lot of you are) and you’re based in or willing to be based in San Francisco (I think they are flexible on this), you should absolutely consider applying to be their full time “Cities Researcher.” The deadline is July 30, 2016.

    Here’s a taste of what they are thinking about…

    There are many high-level questions we want to think through, for example:

    – What should a city optimize for?

    – How should we measure the effectiveness of a city (what are its KPIs)?

    – What values should (or should not) be embedded in a city’s culture?

    – How can cities help more of their residents be happy and reach their potential?

    – How can we encourage a diverse range of people to live and work in the city?

    – How should citizens guide and participate in government?

    – How can we make sure a city is constantly evolving and always open to change?


    And there are tactical questions we want to dig into, for example:

    – How can we make and keep housing affordable? This is critical to us; the cost of housing affects everything else in a city.

    – How can we lay out the public and private spaces (and roads) to make a great place to live?

    – Can we figure out better zoning laws?

    – What is the right role for vehicles in a city?

    – Should we have human-driven cars at all?

    – How can we have affordable high-speed transit to and from other cities?

    – How can we make rules and regulations that are comprehensive while also being easily understandable?

    – Can we fit all rules for the city in 100 pages of text?

    – What effects will the new city have on the surrounding community?

    The convergence of city building and tech is something that I’m deeply interested in. I also think it’s inevitable. And I think that Toronto – thanks to our robust real estate industry – is in an ideal position to be a leader in this space. So I would love to see someone from here take on this job.

    But even if you’re not from Toronto, you should still apply because it’s an exciting initiative 🙂

  • Positivity at a public meeting

    I’ve been reading the blog 5 Kids 1 Condo for, I think, about a year now. It’s written by Adrian Crook who is a single dad of 5 kids, living in a 2 bedroom condo in downtown Vancouver. And his blog is about just that.

    A few days ago he posted a video of himself speaking at a public meeting in support of a new purpose-built rental building at 18th and Commercial Drive in Vancouver. The proposal includes 110 secured market rental units; 37% of which will be 2 or 3 bedroom apartments. (More information on the project, here.)

    It’s rare to see people come out in support of a project at a public meeting. Usually people only show up when they’re grouchy and upset. So today I’d like to share his speech (click here if you can’t see the video below).

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

    I’m curious to know what was shouted right at the beginning after he said that he was in favor of the proposal. I listened a few times but couldn’t figure it out. 

    In any event, Adrian’s speech touches on a number of important points that transcend this specific development proposal and that are relevant to many of the topics that we discuss here on this blog.

  • Market vs. subsidized

    Miriam Zuk and Karen Chapple of the University of California, Berkeley, recently published a research brief called Housing Production, Filtering and Displacement: Untangling the Relationships

    It’s a nuanced look at the impact of both market-rate and subsidized housing production on affordability and displacement within the San Francisco Bay Area.

    The report is essentially a response to the debate around whether increasing market-rate housing production alone can address affordability and displacement concerns, or whether the only way to do it is through subsidized housing. What they found was that both matter, but…

    “What we find largely supports the argument that building
    more housing, both market-rate and subsidized, will
    reduce displacement. However, we find that subsidized
    housing will have a much greater impact on reducing displacement
    than market-rate housing. We agree that market-rate
    development is important for many reasons, including
    reducing housing pressures at the regional scale and housing
    large segments of the population. However, our analysis
    strongly suggests that subsidized housing production is even
    more important when it comes to reducing displacement of
    low-income households.”

    If you’re interested in this topic, I recommend reading the full brief. It’s only 12 pages. I particularly liked the information around filtering and how new housing steps down over time to ultimately serve lower-income households.

  • Lessons on the transforming city

    image

    Last week, Detroit hosted the 24th annual Congress for the New Urbanism. The theme was: The Transforming City. 

    I wasn’t there, but I would have loved to attend. So many interesting things going on, but so little time. Attention is scarce.

    For those of you who also did not attend, below is a copy of a speech that was delivered by Carol Coletta – senior fellow at the Kresge Foundation’s American Cities Practice. I found it on City Observatory

    The speech does a great job of addressing many of the common misconceptions that people have about cities. I can tell you that I heard many of them just this past weekend.

    Also, if you aren’t familiar with The Kresge Foundation, they are a large private philanthropic foundation based in Troy, just outside of Detroit. You might not recognize the name, but Kresge is the K in Kmart.

    And now Carol Coletta…

    ———————————————————

    Could there be a more apt place to observe “The Transforming City” than Detroit?

    On behalf of Rip Rapson and my colleagues at the Kresge Foundation, welcome to Detroit. If you travel to Detroit regularly, as I have over the past 15 years, you see that Detroit changes quickly.

    The speed of change here sometimes takes your breath away.

    How many of you have walked the Detroit Riverfront or ridden the Dequindre Cut?

    Visited the expanding Eastern Market?

    Seen the Q Line construction on Woodward?

    Eaten a meal at Selden Standard or Wright & Company, one of those meals so special that it deserves its own social media channel?

    Walked the streets of downtown or Midtown and discovered Great Lakes Coffee, City Bird, or the El-Moore Lodge?

    Or met Claire Nelson at the Urban Consulate, or any one of Detroit’s arts and civic innovators responsible for some of the most exciting urban work in the country?

    This is the Detroit you can see right outside this theatre.

    But there is another Detroit, one that is harder to see. It’s the Detroit that feels threatened by the pace of change in the city, suspicious of newcomers eager to be part of the change, and wondering when their loyalty to Detroit will be rewarded.

    Such feelings are not unique to Detroit. Every morning my Google Alerts brings a new batch of headlines from around the country detailing the gentrification battles.

    Because “new urbanism” is the butt of some of this criticism, I want to spend the next few minutes unpacking the myths and the realities of gentrification and what those of us who care about great places can do about it.

    First, let me share some numbers.

    In 1970, about eleven hundred urban Census tracts were classified as high poverty.

    By 2010—40 years later—the number of high poverty Census tracts in urban America had increased from 1100 to more than 3,000. (3165)

    The number of people living in those high poverty Census tracts had increased from 5 million to almost 11 million. And the number of poor people in high poverty Census tracts had increased from 2 million to more than 4 million.

    So over a 40-year period, the number of high poverty Census tracts in America’s core cities had tripled, their population had doubled, and the number of poor people in those neighborhoods had doubled.

    Given that record, I’ll bet a lot of people are hoping for a little gentrification– if gentrification means new investment, new housing, new shops without displacement.

    The idea that places might benefit from gentrification runs against the popular narrative. But here’s the really startling fact: only 105 of the eleven hundred Census tracts that were high poverty in 1970 had rebounded to below poverty status by 2010. That’s only ten percent! Over 40 years!

    A similar study of Philadelphia by Pew found almost exactly the same result in that city’s neighborhoods. There, ten times as many poor neighborhoods (164) experienced real declines in income as experienced gentrification since 2000.

    It is the lack of gentrification that we rarely count and never see. The deterioration happens too slowly for us to notice. But it doesn’t mean the deterioration isn’t devastating. In fact, the high poverty neighborhoods of 1970 lost 40 percent of their population in 40 years.

    You could make the case that poor people are displaced from poor neighborhoods because of their poor schools, their lack of jobs, their more chaotic public spaces, their lack of opportunity.

    Understand, this is not the fault of the people who live there. This is a public policy failure.

    But… when a combination of government intervention, philanthropic support, community development, and market forces combine to change a place as quickly as Detroit—even when that change means new residents, new jobs, and new places to live—it also rightfully generates concern.

    See, we are conflicted about change. Many of us wish we could fix place in time.

    But neighborhoods do change. You know that. You change them. And when change results in mixed income neighborhoods—in other words, when we achieve investment without displacement — it’s good for everybody.

    The research on this is quite clear: The ability of people to improve their economic status from one generation to the next is strongly correlated with mixed-income neighborhoods.

    Many of the public policy interventions to achieve economically integrated neighborhoods have supported poor people moving to wealthier neighborhoods. But that is an expensive, slow political slog that is hard to scale.

    But what if we flipped that script? What if… we could lure people with financial options about where they live to disinvested neighborhoods—resulting in the kinds of places that enable opportunity?

    And what if we also made a special effort to insure that the people remaining in low-income neighborhoods—people without options about where they live—what if an extra effort were made to insure they benefited from new people and new investment in their neighborhoods?

    The research tells us that mixed-income neighborhoods benefit poor people naturally. But can we double down to accelerate those benefits?

    Think of it this way: Can we get gentrification with broadly-shared benefits.

    I think so. But it’s not easy. Remember: Only 10 percent of high poverty neighborhoods “gentrified” over the past 40 years. And today we have triple the number of high poverty neighborhoods than we had 40 years ago.

    Clearly, mixed income neighborhoods won’t happen if we don’t work at it.

    So how can we do that?

    First, let’s acknowledge that, for the first time in 50 years, the market is moving in our favor. People (and jobs) are moving to cities. We need to see that as the opportunity it is to get mixed-income neighborhoods and not fear good, thoughtful development.

    That means we can’t let NIMBYs win the day. The same people who complain about high prices also complain when developers show up to build more supply. We have to make the connection between supply and demand for the protesters and the press.

    But attention must be paid to creating more mixed income housing. Our success on this has been mixed, and I’m struck by the comparison on methods used in NYC and in Portland, Oregon’s Pearl District to create more affordable housing in mixed income settings.

    As City Observatory reported today, The City of New York, one of the nation’s hottest housing markets, has had inclusionary zoning for the past 10 years. And over that time, the city has produced an average of 280 units per year for a total of 2800 units.

    In contrast, Portland took a very different approach. Portland used additional property tax revenue from construction in one neighborhood to subsidize affordable housing. Using just a third of such revenues from The Pearl District (along with Low Income Housing Tax Credits), Portland has built more than 2300 units of affordable housing—almost as many units as the much larger New York.

    Portland’s Pearl District is an example of a desirable neighborhood. The cost of desirable neighborhoods goes up. And it is the fear of rising costs, new investment, (and sometimes a changing demographics) that spawned the “just green enough” movement.

    Think about that: Disinvested neighborhoods lack access to parks and quality public space. But wait! Let’s not make it too nice for fear it will attract new investment. That’s craziness born out of legitimate frustration when prices start going up.

    The fact that buyers and renters are willing to pay more for quality neighborhoods means we need to build more of them, not fewer of them.

    How do we do that at scale?

    When Paul Krugman or—the American electorate willing—the next president calls for new investments in infrastructure to stimulate the economy, will we be ready with a plan that defines infrastructure as something more than roads and bridges?

    Why can’t “infrastructure” include new and redesigned parks and libraries, neighborhood community and cultural centers, trails and gardens—a reimagined civic commons? That’s the defining line I want to hear from our next president. I want so many desirable neighborhoods that people will have good choices at all price points.

    The way we live today is changing so fast. We are decoupling and recoupling. We have mothers raising kids alone, and people delaying childbearing—some forever—who want to help. We are sharing jobs, cars and homes. We are retiring later and living longer. And our lives, increasingly, are lived in public.

    We need to ready our cities for these changes. We need to figure out how to revalue what exists and give new life to the material, the buildings, the neighborhoods, the cities and the people we too often discard and write off.

    Equity does not sit in opposition to a thriving, appealing city. It is central to it.

    This is the work of CNU. This is your work. And that’s why I’m happy to be with you here in Detroit to celebrate and learn alongside you this week. Thank you for inviting me.

  • Fluted glass curtain wall

    New York architecture firm REX is working on a new office building in Washington DC that will incorporate a beautiful fluted glass facade. Here’s a rendering of what it is intended to look like:

    Here’s what that looks like in plan (it’s a GIF that should show typical curtain wall vs. proposed fluted glass):

    Here’s a photo of the 1:1 mockup:

    And here’s a description from the architect:

    The façade’s approximately nine hundred identical, insulated-glass panels—3.2 m tall by 1.5 m wide (11’-6” tall by 5’-0” wide)—are subtly curved to a 2.9 m (9’-6”) radius through a heat roller tempering process. The curve yields structural efficiency, which meets wind load requirements and enables a thinner monolithic outer lite than normal, providing greater transparency. 

    Because of the curve’s inherent rigidity in compression, only the top and bottom edges of the panels are supported from the floor slabs, while the mullionless vertical edges are flush-glazed for a minimalist aesthetic that improves sight lines, while gaining usable floor area.

    They are working in collaboration with Front Inc., which if you haven’t heard of, you should check out. They are a design/engineering consultancy that specializes in facades and building envelopes. They work with many of the big name starchitects. The developer of the project is Tishman Speyer.

    It’s worth noting that part of the impetus for the fluted glass facade was to try and innovate within the confines of DC’s draconian zoning – which mandates that no building can be taller than 130 feet. Because of this, developers and architects are usually forced to build out to the allowable area, leaving little room for architectural variation. 

    But in this case, the fluted glass removed the need for thick mullions and also allowed them to extend out beyond the lot area by 4 inches every 5 feet (the curves are considered “architectural features”). So this move has created both architectural variation and more rentable area.

    It doesn’t appear that the building will have any operable windows, but other than that, I think it promises to be quite beautiful. What do you think?

    All images from REX.

  • The change order (ruminations on innovation)

    If any of you are in the
    business of creating – whether that’s a mobile app or a building – I’m sure
    you understand that the product or thing you’re working on will naturally
    evolve and change over time – probably in unexpected ways.

    In fact, I usually take this as a positive sign. When I have my
    head in a project and I’m focused on solving problems, ideas will naturally
    start to flow. I start thinking of things that I never would have thought
    about at the outset. That’s why I generally think of creativity as a process,
    rather than as some divine gift.

    But the challenge with all of this is that many of our existing business
    processes are not set up to deal with this kind of ambiguity. If anything we
    try and punish these sorts of deviations. If it wasn’t pre-meditated at the
    beginning of the project, we call it “scope creep” and charge extra for them as
    “change orders.” These two words equal death in construction.

    Now, don’t get me wrong, I completely understand the realities
    of running a business and the importance of managing scope and resources. It’s
    a balancing act. Without some structure, nothing would get done. 

    But the more that iterative
    lean methodologies and “design thinking” can be embedded into our processes,
    the more value creation I believe we will see.

    My thinking is as follows: At
    least part of the reason that innovation comes from startups and new market
    entrants is that the founders aren’t usually sitting around talking about defined
    scope and laying out elaborate business plans. They’re focused on creatively
    solving problems and doing whatever it takes to get there.

    It’s also one of the reasons
    that conventional wisdom dictates that tech startups shouldn’t outsource development.
    It’s too core a competency and you can’t “move
    fast and break things
    ” if you don’t have that in-house and you’re constantly worried
    about eye-popping invoices hitting your desk.

    I have always seen lots of
    parallels between startups and architecture. In both of these worlds, the idea
    you start with is rarely what you end up with (at least that’s the case in
    architecture school). You research, learn, and iterate along the way and that
    leads you in new and unexpected ways.

    And in my view, that’s often what
    the path to innovation looks like. Because if you define the entire path at the
    outset, how can you expect to go anywhere new? And if you’re not going anywhere
    new, how can you expect to outperform the market?

  • Rental apartment expansion in Detroit

    The Detroit Free Press recently published a summary of some of the new rental apartments coming online in and around downtown Detroit. Here’s the map that they published along with their piece:

    image

    Based on this article, demand is outstripping new supply and rents are starting to push above $2 per square foot. This strikes me as a solid number given that there are also for sale lots/houses in the city going for $10,000.

    Going back to some of the posts I have written about rental apartment development in Toronto, you might remember that $3 psf is roughly our magic number given current cost structures.

    In some special circumstances you might be able to get a project off the ground with rents closer to $2 psf, but that’s an exception to the rule. There are many areas in the Toronto region with $2 psf rents and few, if any, new rental apartments.

    But Detroit is obviously a different city, as is every real estate market.

    Land would be cheaper. Many of these new rental apartments are conversions of existing buildings (which were probably bought for cents on the dollar). And I wouldn’t be surprised if there are tax abatements and other incentives to encourage more development. 

    I also wonder if people in the city aren’t being at least partially drawn to multi-family buildings because of the safety and security benefits. That’s something that certainly came up when I was in Detroit last weekend.

    Regardless, this is a good news story for Detroit, which is not always the story you hear people telling of the city.

  • Event: Community Consultation for Mirvish Village

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    One June 13, 2016 from 6:30 to 9:00 pm, the City of Toronto will be hosting a community consultation meeting for the proposed redevelopment of Honest Ed’s / Mirvish Village

    The meeting will be held at the Bickford Centre Auditorium at 777 Bloor Street West (across from Christie Pits Park).

    The purpose of the meeting is to present Westbank’s revised development proposal, which was submitted to the city last month. Their first proposal was submitted last summer (July 2015). 

    Some of the key changes include a new on-site public park, the retention of additional heritage buildings (now 21 in total), more pedestrian porosity, and the retention of Honest Ed’s alley in its current location.

    I consider Westbank to be one of the most thoughtful developers in the city and so I’m pretty excited to see this one evolve. I’m planning to attend the community meeting and maybe I’ll see you there.

    Below are a couple of other renderings to give you a taste.

    imageimageimage

  • Towards car-free living

    Right now, there’s an apartment building in San Francisco that is trying to encourage car-free living by offering residents a $100 per month credit that can be used for Uber and/or for public transit. Prospective residents can even get a $20 credit to go check out the community. (The program is a partnership with Uber.)

    The reason this leasing strategy caught my attention is because we’re at a point where city builders are now trying to recalibrate themselves to this new emerging world. 

    When I was at the Land & Development conference earlier this month, one developer brought up this exact point. He more or less asked: If you’re starting development on a new building today and you’re expecting approvals in 2 or so years and completion in another 3 or 4 years, what do you think the state of cars/driving will be at that point? Should you really be building all that underground parking?

    These are great question. And they highlight one of the challenges of development. It takes a long time to bring new supply to the market and a lot can change during that time period. My sense is that we are pretty clearly seeing downward pressure on driving and car ownership.

    That said, this isn’t the case in every city or in all parts of a particular city. I just got back from a trip to a Detroit where it’s pretty hard to imagine the city being oriented around anything but the car. But in cities like San Francisco and Toronto, car-free living is already a reality for many people and so we need to respond to that.

    How do you see yourself driving, or not driving, in the next 5 to 10 years?

  • The answer to San Francisco’s housing affordability problem

    Blogger and programmer Eric Fischer has an excellent post up on his site where he looks at: “Employment, construction, and the cost of San Francisco apartments.” It’s worth a good solid read.

    What he did was dig deep into whatever data he could find – the data goes back to the beginning of the 20th century in some cases – to try and figure out a solution to San Francisco’s housing affordability problem.

    Many (including myself) have argued that, at least part of the solution, is to build more, not less, housing. However, others, such as Tim Redmond of 48 Hills, have argued that building more market-rate housing would simply exacerbate the current situation.

    In Eric’s analysis, he looked at everything from median rents and new housing units constructed (above graph) to annual wage growth and income inequality. I particularly liked his summary of the city’s various building booms. 

    In the end, here’s the conclusion that he came to:

    “In the long run, San Francisco’s CPI-adjusted average income is growing by 1.72% per year, and the number of employed people is growing by 0.326% per year, which together (if you believe the first model) will raise CPI-adjusted housing costs by 3.8% per year. Therefore, if price stability is the goal, the city and its citizens should try to increase the housing supply by an average of 1.5% per year (which is about 3.75 times the general rate since 1975, and with the current inventory would mean 5700 units per year). If visual stability is the goal instead, prices will probably continue to rise uncontrollably.”

    By visual stability, he is referring to maintaining the current urban fabric of San Francisco just the way it is. In other words, he is making the link between preservation and affordability in a prosperous and growing city.

    Intuitively, this makes sense to me. It’s unrealistic to think that you can maintaining some level of housing affordability without allowing supply to increase alongside demand.

    At the same time, I do not believe that preservation needs to equate to no changes whatsoever. Urban preservation, to me, should be about dutifully respecting the past while still looking firmly towards the future. And that’s how I believe successful should be approaching this problem.