Tag: development

• Is Toronto a world-class city?

  

  Earlier this week I was on a panel discussion called Building Toronto Tomorrow. One of the questions was about whether or not Toronto is world-class city. It elicited a good discussion, so I thought I would talk about that today on the blog.

  Shamez Virani, President of CentreCourt Developments, responded by saying that he thinks Toronto is the greatest city in the world and that he wishes more people would just accept how incredible this city is. I agreed with him.

  I also responded by saying that I hate this question. I think it reeks of insecurity and I think it’s a bit of a red herring. It distracts from more direct and meaningful questions – questions such as our livability and our position as a global city.

  Because the reality is that Toronto is one of the most livable cities in the world and, in my view, we are the only true global city in Canada. We are an important node in the global economy for the flow of goods, people (we’re particularly good at this), capital, and now information. There’s a lot to be proud of.

  But that’s not to say that we’re perfect. Everyone knows we need better transit. And to name a few others (non-exhaustive list), I also think we need to:

  • Get a move on road pricing.
  • Loosen up our archaic alcohol laws and start using nightlife as a competitive advantage for attracting talent.
  • Acknowledge through our governance structures that cities are what drive today’s information economy.
  • Stop thinking about the Canadian/Toronto value proposition as being about cost savings. That is, buy this from us because our currency is weaker than yours. This is anti-innovation and there are much better ways to create sustainable value. (Innovation is still a weak spot.)
  • Focus on developing an information economy that leverages the unique talent and knowledge base of Toronto. For example, I think we’re in a great position for real estate + tech innovation.
  • Do everything we can to encourage big tech IPOs in this city. They are critical to developing the ecosystem.

  There’s a saying in Silicon Valley that you “make what you measure.” It means that whatever you decide to focus your attention on, is invariably what you end up making – regardless of whether or not you happen to be focusing on the right metric.

  In the context of Toronto, I think we’d be better served if we focused on and quantified our position in the global economy, as opposed to chasing some idea of “world-class.” The latter will grow as the former grows.

  I also think that this needs to be balanced against our livability. Sometimes there’s a tension. But there are cities – the best example is perhaps Tokyo – who have managed to pair a high quality of life with one of the strongest positions in the global economy.

  Is there anything else you think we should be doing? We can talk about it in the comments below.

  Image: Building T.O Toronto (BuzzBuzzHome Event)

  2016.05.07

• De Rotterdam…

  

  “Manhattanism is the one urbanistic ideology that has fed, from its conception, on the splendors and miseries of the metropolitan condition – hyper-density – without once losing faith in it as the basis for a desirable modern culture. Manhattan’s architecture is a paradigm for the exploitation of congestion.” 

  –Rem Koolhaas, Delirious New York, 1978

  Image: De Rotterdam by photographer Ossip Van Duivenbode via The Architectural Review

  2016.05.07

• Lisbon creates 24-hour district

  

  About a year ago I wrote a post called, Lisbon is the new Berlin. The timing of the post happened to coincide with Monocle’s first ever Quality of Life Conference, which was held in the city.

  Since then, I’ve been keeping an eye out for all things Lisbon and the city has quickly jumped to the top of my list of places I want to visit. I am obsessed with understanding the triggers that catalyze change within a community and/or city.

  On a related note, Lisbon has recently put in place new regulations to control nightlife in the city. Bars in certain areas must now close at 2am on the weekdays and 3am on the weekends. Outdoor patios must close at midnight. If you have the right kind of soundproofing though, your bar can remain open until 4am. The impetus for these changes was to address nightlife noise complaints – a perennial problem in many cities.

  However, Lisbon has also created a 24-hour district along a supposedly underdeveloped area of the waterfront. This means that bars and clubs in this area will have the option of staying open 24/7. At the same time though, investments are being made (Portuguese article) to transform the area into something more than just a place for drinking and dancing.

  I am noticing a real trend in European cities around using nightlife as a strategic lever to attract talent and revitalize neighborhoods. Oftentimes the knee jerk reaction is to simply focus on the negative externalities associated with nightlife. But there are strategic benefits. Many cities today recognize that.

  Image: Mhx on Flickr

  2016.05.01

• 100 years since Cincinnati tried to build a subway

  

  I can get lost on Google Maps for hours on end. I love looking at maps and I love using Street View to virtually explore cities. This morning I’m honed in on Cincinnati, Ohio (a city I’ve never been to) while I listen to this podcast about their unfinished subway.

  In 1916, the city voted in favor of spending $6 million on a new subway. But it was never finished and so today – 100 years later – it has the dubious distinction of being the largest abandoned subway tunnel in the United States. 

  The podcast I’m listening to is with a fellow by the name of Jake Mecklenborg. He has written a book on the subway’s history and has emerged as the expert on this topic. And it all started with him just throwing up a website.

  One particularly interesting aspect of the subway is how it tied into the city’s flooding problems. At the time, the population density of the constrained downtown was surging and the subway was viewed as a way to stitch together desirable land and relieve some of those urban pressures.

  I’m also very interested in understanding how cities got founded in the locations that they did. As in, who was the person who dropped their bag and said: “yup, this, is the spot.” Somebody had to have made a decision.

  Oftentimes there were specific strategic, economic, and/or environmental reasons for a certain location. And this is something that Jake touches on. In the case of Cincinnati, flooding was again a major determining factor. 

  If you can’t see/listen to the podcast through the embed below, click here.

  //html5-player.libsyn.com/embed/episode/id/4210424/height/90/width/580/theme/custom/autoplay/no/autonext/no/thumbnail/yes/preload/no/no_addthis/no/direction/backward/render-playlist/no/custom-color/87A93A/

  Image: Jonathan Warren via Wikipedia

  2016.04.30

• Project Sidewalk

  One of Alphabet’s subsidiaries is a company by the name of Sidewalk Labs. Some of you, I’m sure, have been following it. The goal of the company is to leverage technology in order to solve some of our biggest urban challenges.

  Initially, they were fairly under the radar, but more recently they’ve become a lot more public with their projects and their mission. Here is a snippet from a recent blog post written by their CEO, Daniel L. Doctoroff: 

  “The world is poised for a fourth urban-tech revolution — an age of connectivity capable of reshaping cities as much as the steam engine, electricity, and automobile have in the past. New technologies will help citizens and elected officials tackle those intractable urban challenges that Larry outlined last summer, but making sure this age imposes fewer social costs than those previous shifts is critical.”

  Earlier this week it was also announced that the company is likely to enter the real estate development business and construct a new city precinct in order to pilot some of their ideas and projects. The initiative is called Project Sidewalk. 

  Here is an excerpt from the Wall Street Journal:

  “According to people familiar with Sidewalk’s plans, the division of Alphabet is putting the final touches on a proposal to get into the business of developing giant new districts of housing, offices and retail within existing cities.

  The company would seek cities with large swaths of land they want redeveloped—likely economically struggling municipalities grappling with decay—perhaps through a bidding process, the people said. Sidewalk would partner with one or more of those cities to build up the districts, which are envisioned to hold tens of thousands of residents and employees, and to be heavily integrated with technology.”

  When I read this, I immediately thought of the Port Lands area in Toronto. Not because Toronto is decaying – far from it – but because it’s a massive 880 acre site that is both adjacent to downtown and entirely underutilized. I can’t wait to see this area transformed into a thriving waterfront community.

  In any event, if or when Project Sidewalk gets off the ground, it will be very interesting to see what a Google-backed real estate development company looks like.

  2016.04.29

• The Social Life of Small Urban Spaces

  “It is difficult to design a space that will not attract people. What is remarkable is how often this has been accomplished.” -William Whyte
  

  In 1980, the sociologist and urbanist William Whyte published a revolutionary book called The Social Life of Small Urban Spaces. 

  The ambition was to discover why some urban plazas are successful and why many others fail. And to do that, he went out and studied urban plazas throughout New York using video and simple observation, such as head counting.

  His work has been hugely influential for architects, designers, and other urbanists. But if you think about how often we fail at creating urban spaces that actually attract people, I think it’s worthwhile revising what Whyte discovered way back in the 70s and 80s.

  Some of the principles – such as providing places to sit – are dead simple and intuitive. But again, a lot of urban spaces suck. So we’re clearly not doing it.

  The other thing I feel we often forget is that it’s not just the space itself that matters, it’s also the urban fabric around it. The Seagram Building in New York plays a central role in Whyte’s work as an example of a successful urban plaza. 

  But we can’t forget that Mies van der Rohe’s simple gesture of setting the tower back from the street is strengthened by the remaining urban fabric and the activity along Park Avenue. The plaza acts as a kind of release.

  Alongside the book, Whyte also published a 60 minute video. If you’ve never seen it, I highly recommend you watch it when you get a chance. Click here if you can’t see the video below.

  [youtube https://www.youtube.com/watch?v=MjxXTsHgc8g&w=420&h=315]

  To close out this post, I thought it would be fun if everyone shared their favorite public urban space in the comment section. It can be in your city or it could just be a place you’ve visited.

  To kick things off, I’m going to go with with a space that’s close to home: Berczy Park. It has lots of places to sit, including movable chairs. There’s a great water feature. And it’s well connected to the rest of the area and surrounding streets. I often sit there during lunch or when I just want to think.

  It’s also in the midst of a revitalization and I’m excited to see that come together.

  2016.04.27

• What is this a building for ants?

  One of the things you’ll often hear people deride at cocktail parties is the trend toward smaller urban dwellings. They get called “shoeboxes” and “cubby holes in the sky.” So let’s unpack that a bit today and try and better understand the economics behind it all.

  When a new building is being developed, pretty much everything gets normalized to a per square foot (or square meter) number. 

  This is important because saying that building X cost $50 million to build and building Y cost $100 million to build doesn’t tell you much if the buildings are completely different. 

  However, saying that building X cost $500 per square foot to build and building Y cost $475 per square foot to build, tells you that building Y, despite being more expensive in absolute terms, was actually cheaper and/or more efficient.

  The same is true on the revenue side. And typically, developers are looking (struggling) to meet a certain per square foot number in order to make the project financially feasible. 

  For instance, let’s say you’re building a 100,000 sf condo building. Once you subtract the non revenue generating spaces, you might determine that you need 85,000 sf x $600 per square foot in revenue in order to make the project feasible.

  But there’s a back and forth game that needs to be played here. You have to ask yourself: for the product that I’m hoping to build, does $600 psf translate into something that people can actually afford?

  You might think: everyone keeps telling me at cocktail parties that condos in this city are too small. So I’m going to build a bunch of 1,800 sf, 3 bedroom condos. Based on the above, these homes would be priced at around $1.08 million (1,800 sf x $600 psf). Your on-site signage would read: “Condos coming soon. From the low $1 millions.”

  But wait a minute, how many families can afford a condo north of $1 million? Some could, but definitely not the majority. So then you determine through rigorous market analysis that $600,000 would be a better number. That is something that is within reach of more families.

  But then you look at the math and realize that if you build that same 1,800 sf home, your per square foot revenue number now drops to $333 psf ($600,000 / 1,800 sf). 

  Given that you bought the land for $100 psf buildable (market price in the area) and that your construction costs alone are going to be $250 psf, you realize that you’re now underwater ($100 + $250 psf > $333 psf) without even adding in any soft costs (consultant fees, city fees, and so on). If you showed this to your investors on the project, they would throw you out of the room.

  So instead of building that 3 bedroom condo at 1,800 sf, you say to yourself: what if I made it 1,000 sf? You’re confident that your architect could lay out a terrific condo at that size and it now magically gets your per square foot revenue number back up to $600 psf. 

  This solves two problems: it returns the project to positive feasibility and it keeps the total sale price within reach of more people. It promotes greater affordability. So you go ahead and do it. Boom – shrinking urban dwelling.

  All of this is not to say that this is fair or unfair, good or bad. It is simply to say that this is the way it often is.

  2016.04.24

• A real estate dynasty without heirs

  

  Throughout history, real estate has been a tremendous source of wealth for a lot of people. Many family dynasties were created by accumulating property, holding it, and then riding the valuation wave.

  Here in Toronto, there was the Reichmann family. At one point they had created the largest real estate company in the world (Olympia & York). But I’m not sure exactly how much of that wealth remains today following the company’s bankruptcy in the early 90s. That was a tough time in Toronto real estate.

  In line with this, the NY Times recently published a fascinating account of the Wendel family in New York. In terms of how they conducted themselves, they were the polar opposite of some of today’s real estate families (i.e. Trump), but they certainly built an empire.

  Here are two snippets from the NY Times:

  In the early 20th century, the Wendels were perhaps the most powerful landlords in New York City, a dynasty with more than 150 properties in Manhattan worth over $1 billion in today’s dollars. The Wendels were the delight of the local papers, for, rich as they were, the family — six sisters and a brother, all unmarried — lived together in a shuttered mansion without electricity on the northwest corner of Fifth Avenue and 39th Street, and dressed in grim Victorian garb that had gone out of style half a century earlier. Tour buses regularly pulled up in front of “the House of Mystery.”

  Alongside their austere lives, they also practiced a strict and disciplined approach to investing: 

  Never mortgage a property; never sell anything; never pay for repairs; and never forget that Broadway moves uptown at a rate of 10 blocks a decade.

  In fact, they were so draconian in their approach, that the sisters were supposedly prohibited from marrying. Unions were not allowed because that, according to the NY Times, “would disperse the accumulated property and put it under other names than Wendel.”

  But in the end, this meant that the last Wendel – Ella, who died in 1931 – died alone and with no one to pass along the empire to. So instead it was distributed to various charities and the inevitable “cousins” that come out of the woodwork when a rich person passes.

  I guess the moral of the story here is the old saying that you have to “give to receive.” From the sounds of it, the Wendel family didn’t like to do that.

  Image from March 15, 1931 obituary

  2016.04.23

• Nest or cave?

  I was recently introduced to the work and writing of Japanese architect Sou Fujimoto. One concept that he writes about that I really like is the idea of nest vs. cave.

  The way Fujimoto describes a cave is that it’s a naturally occurring and pre-existing condition. It is exists independent of humans. So if and when a human decides to occupy a cave, he or she must assimilate their lives to that which is already there. They have to deal with the ambiguity of the spaces because it is not clear how everything should be used.

  A nest, on the other hand, is something completely created by and for the benefit of a person or animal. It would not exist without someone creating it and so it is prescriptive and functional in a way that a cave is not.

  Fujimoto is interested in exploring architecture that is analogous to caves. Which is why he designs houses like this one (House NA) in Tokyo:

  

  In most countries, a house like this would not meet code and would be illegal. But in Tokyo it’s obviously allowed. And his hope is that the owners will discover new and unintended ways to interact with the unusual pairing of levels and platforms.

  However, I think about this juxtaposition differently – likely incorrectly in the mind of Fujimoto.

  I’m actually more interested in nests. Because in a way, mass produced housing is like a cave. It exists whether or not we decide to occupy it. And it is generally created to appeal to lots of people, rather than to the idiosyncratic tastes of one person. So when someone does occupy it, they invariably end up trying to shape it.

  But not to the extent of a nest. A nest is custom. It is what you would build for yourself given the opportunity to do so. And that thought is really appealing to me. Maybe it’s because I don’t like the ambiguity of a cave. That could be a possibility.

  I could also be thinking about it differently because I tend to think of Japanese homes as being quite individualistic. Since Japanese people generally don’t care about resale value, they don’t have the same fixation with marketability and future value. That means they’re more likely to just build what they want.

  I’d love to have my own nest.

  Image: Wall Street Journal

  2016.04.22

• Coffee shops vs. fried chicken

  When it comes to a real estate market, there are always the typical metrics: sale prices, rents, vacancy and so on. But I’m always interested when somebody looks at the market in a different way and comes up with other kinds of metrics.

  That’s why I was intrigued when I stumbled upon this post by Sam Floy, where he looks at the concentration of coffee shops and friend chicken shops across London in order to determine which neighborhoods are in fact “up and coming.”

  To give you a taste, here’s his coffee shop map:

  

  His thinking was that if a neighborhood had a high density of coffee shops, a low density of fried chicken shops, and relatively low house prices, then it could probably be thought of as up and coming. 

  Coffee shops are often considered to be leading indicators of urban change (i.e. gentrification), and, well, friend chicken places I guess speak to a different kind of neighborhood.

  These sorts of playful studies aren’t going to tell you exactly which numbers you should be plugging into your development pro forma. But I think unconventional analyses can sometimes tell you a bit more of the story behind the numbers.

  2016.04.21