Tag: development

• Why multi-family developers are shifting their customer focus

  One aspect of the Toronto housing market that I’ve been paying close attention to is the adoption of multi-family dwellings by both long-term end-users and families. 

  I’ve written about this before (here and here, over a year ago) and have argued that here in Toronto we are at an inflection point. Multi-family dwellings – both rental and condo – are evolving to now target these new customer segments. Whereas previously, the new construction multi-family housing market was heavily geared towards investors and first-buyers. And often it was simply a stepping stone towards a single family home.

  Now, every city and real estate market is different. And I have heard many people in U.S. cities say that Millennials are simply deferring what we saw with previous generations. At the end of the day they (or we, I’m a Millennial) are going to move to the suburbs and buy that car. The current trends we are seeing around city living and reduced driving are just that – short-term current trends.

  But I think it’s worth reiterating: I do not believe that the status quo is what’s happening right now in Toronto. And I’m sure it’s also happening elsewhere. Time and time again I speak to developers in this city who are starting to shift at least some, and in some cases all, of their focus towards end-users, families, and larger units – particularly for new mid-rise product in the “neighborhoods.”

  And if you think about it, this makes perfect sense. 

  The average price of a detached single family house in Toronto is well north of a million dollars. So when a developer brings to market a 1,200 sf family sized apartment at $600 psf ($720,000) or even at $700 psf ($840,000), that home now becomes a relatively “affordable” option in many desirable areas of the city. Particularly if you value location amenities and your time (i.e. shorter commutes) over raw quantity of space. I know I certainly do.

  I know this isn’t going to appeal to everyone. But there is a big market here. Get ready.

  What are you seeing in your city? Let us know in the comment section below.

  2015.12.15

• [Video] The Skyline Forum: Architect or Developer?

  I recently had a discussion with Ben Stevens about architecture and real estate development for his video blog, The Skyline Forum. I’ve posted about his blog before because I think it’s a great idea and a great forum for the industry. I sure hope he keeps it up.

  Here’s what we talked about in Ben’s words:

  “In Episode 6, I caught up with Brandon Donnelly of the very popular blog Architect This City. Brandon has degrees in both architecture and real estate development and as such has a unique perspective on the two disciplines. In this episode, I was interested to hear about the rationale behind his decision to pursue development over architecture, his definition of “real estate developer,” and his suggestions for pursuing the kind of work in real estate development which he does (currently in Toronto). It was a great conversation and confirmed for me a lot of things I’d learned through reading his fantastic blog.”

  And here’s the video discussion:

  [youtube https://www.youtube.com/watch?v=_-o_gT9czfM&w=560&h=315]

  A big thanks to Ben for inviting me to participate – he has chatted with some big names. As a published author himself, I also appreciated him encouraging me to write a book. I’ve been thinking about doing that. Oh, and a big thanks to my mom for providing the Christmas poinsettia that ended up being prominently featured in the background 😉

  I haven’t watched the full video yet, but one thing is clear: I’m quite the hand talker.

  2015.12.14

• Vancouver approves first laneway apartments in the West End

  It’s no secret that Vancouver is way out in front of Toronto and many other cities when it comes to laneway housing. 

  Good luck trying to get a laneway house approved in Toronto. They’re only allowed under rare circumstances where there is already an existing house in the lane and/or you’re willing to fight it all the way to the province.

  But in Vancouver, it’s a different story. And they’ve even taken it a step further according to this recent Globe and Mail article by Frances Bula. The city recently approved small scale laneway apartments in the West End:

  “The city, which created the possibility for laneway apartments when it approved a new West End plan last year, has approved the first four buildings with 47 units in total. Three are in this particular alley between Nelson and Comox on either side of Cardero, around the corner from Cardero Bottega and Firehall No. 6. Others are in the pipeline. Many more are expected.
  

  They’re the first of a new kind of infill that planners hope will produce 1,000 new small homes in this popular downtown neighbourhood.”

  Here’s a rendering from the article to give you an idea of what these laneway apartments might look like:

  

  Readers of this blog have argued that Toronto doesn’t need laneway housing. There’s enough room for intensification elsewhere. 

  But what is clear to me is that Toronto is continuing to build less and less ground-related housing. There’s little to no room for that. And what is left of our low-rise stock is becoming increasingly unaffordable.

  So if we believe that social diversity is important for building a great city – which I do – then I think it behooves us to figure out how to not only increase the supply of new housing, but also increase its diversity. This is something Andrés Duany argued for in yesterday’s video post.

  The biggest hurdle is community opposition. But below is how one of the neighbours in Vancouver responded to the proposed laneway apartments. He gets it.

  “Dean Malone, who lives across the street from one of Mr. Sangha’s three projects, took the trouble to go to city hall to support it because the laneway apartments provide a way of creating new housing that isn’t a tower and isn’t a luxury development.”

  What this also does is allow the private sector to do more before the public sector needs to step in with affordable housing subsidies. I believe that laneway housing will help, but not solve, the affordable housing problem happening in most of our cities. 

  But every little bit helps. And this is one solution that many cities are simply ignoring.

  2015.12.03

• 3 real estate + tech startups

  

  On Thursday night I spoke at Product Hunt Toronto about the overlap between real estate and tech. My slide deck will be made available online and I’ll be sure to tweet it out and link to it in the comment section of this post.

  What was amazing to see was a room filled with 250 people coming together from almost two different worlds. I’m generalizing here, but you had the real estate people in suits and the tech people in t-shirts. But they were all mixing together to figure out how technology is going to disrupt the real estate industry. That is great to see.

  This was not the case 5+ years ago when I started obsessing about the overlap between these two spaces. I remember pitching at a Startup Weekend here in Toronto where I was pegged as the fringe outlier for wanting to work on a real estate idea. Now I can’t keep track of all the startups who are tackling this space.

  But this is a trend that is happening not only in real estate but in almost every other vertical. Here’s a quote from Fred Wilson that I used last night:

  “One of NYC’s great strengths is the diversity of its economy – finance, real estate, media & entertainment, retail, fashion, health care, education, and now tech. And the reason tech is growing so fast in NYC is that it is embedding itself in all of these other industries.”

  It’s an exciting time.

  In any event, for those of you weren’t able to attend, the 3 startups that presented were Evercondo, PiinPoint, and MappedIn.

  Evercondo is a condo communication and management tool for property managers and boards. PiinPoint is a data-driven tool that helps businesses find the best places to locate within a city. And MappedIn creates digital wayfinding solutions for (primarily) retail stores and venues.

  If you know of any other interesting startups tackling the real estate space, please share them in the comment section below. Early stage companies need all the support and exposure they can get.

  2015.11.27

• But what about employment?

  The Neptis Foundation here in Toronto just recently published a fantastic report looking at the regional economic structure of the Greater Golden Horseshoe area. It’s called Planning for Prosperity.

  In it they identity the polycentric nature of employment in the Toronto region by way of downtown Toronto and three suburban “megazones.” Here’s one of their maps showing overall employment density and the megazones (light blue circles):

  

  Here’s a snippet to give you an idea of the scale of these megazones:

  “The Airport megazone, one of the three employment megazones outside Downtown Toronto, is the second largest concentration of employment in Canada, after Downtown Toronto. It represents almost 300,000 jobs, more than the central business districts of Montreal, Vancouver, or Calgary individually.”

  And here’s a chart showing the hard numbers:

  

  Downtown Toronto dominates in terms of employment. But it’s also fascinating to see how much more efficiently it provides that employment. It has the smallest physical area of all the employment zones (2,540 hectares or 6,276 acres) and the lowest percentage of car trips (29%).

  But the big takeaway from their report is that we have not been focused enough on employment in our planning. Instead, we seem to be thinking residentially. Here’s a final snippet:

  
  “This study shows that the Growth Plan and The Big Move, which are currently under review, do not address the challenges and opportunities of a globalizing regional economy or the reality of a transforming economic landscape.

  The Growth Plan’s focus has largely been on managing residential growth rather than non-residential and employment-related development. Indeed, the Growth Plan is based on shockingly little hard evidence on the evolving economy of the region. Plans for city-regions a fraction of the size of the GGH typically involve more economic research, analysis, and evidence.”

  Clearly we need to be looking at both the residential and non-residential sides of the equation as we grow the region. To read the full report, click here.

  2015.11.26

• A panelization system for precision homes

  I recently had the opportunity to visit the 200,000 square foot manufacturing facility of H+ME Technology here in Toronto.
  

  Here’s a photo of myself and Nick Zicaro:

  

  H+ME (originally called Brockport Home Systems Ltd.) is a division of developer Great Gulf, but they were never intended to be just an in-house provider and much of their business is now with outside clients.

  What H+ME Technology does is manufacture and assemble factory-built wood panels for both low-rise and mid-rise new construction homes. That is, instead of the walls and floors being framed outside on the construction site, they are fabricated ahead of time in a controlled facility (see below) and then delivered to site. This allows for a single-family home to be framed in as little as 2 days on the job site.

  

  What’s interesting about all of this is that architects have long been obsessed with the idea of shifting construction away from the actual job site. A great book on this topic is Refabricating Architecture by Stephen Kieran and James Timberlake. In it they talk about how inefficient our construction processes are and how we ought to move towards a fully integrated approach that brings together technology, materials, and production methods.

  And in 2006 they put their money where their mouth is and built a fully prefabricated house on Taylors Island in Maryland. Here’s an snippet from their website:

  “Most houses are built from thousands of parts, which are transported separately to the construction site and pieced together by hand—a process of extraordinary duration, cost, and environmental impact. With Loblolly House, by contrast, we wanted to use integrated assemblies of those parts, fabricated off site, to build a house in an entirely different way.”

  The big advantage of this entirely different way is that you’re able to dramatically improve efficiencies, quality, and performance by fabricating the components in a controlled environment, as opposed to on-site by hand.

  Despite all this, the industry has been incredibly slow to change and most houses are indeed not built this way. But H+ME is working to change that, which is why I was keen to check out their facility and learn about their business.

  So here’s how it works:

  H+ME starts by modeling out the entire home in 3D CAD according to the project drawings. This allows them to catch any design coordination errors before they happen on-site. And it’s why their slogan is “Twice built. Assembled once.” They are literally building the entire house in 3D ahead of time.

  Once the house has been modeled, they then send the designs for the walls and floors to their factory and begin production. During this process, all of the rough-ins for electrical, plumbing, and so on, are provided, which makes it super easy for the trades on-site later on.

  Here’s what that looks like in the factory:

  Advanced Precision Robotics allow us to build within 1/16" (1.58mm), which means straighter walls, more level floors, faster installation, and better-fitting trim, molding and cabinets. #timelapse #factory #building #Construction #home #HomeTechnology #Robotics #Precision #quality #production #panelizedconstruction

  A video posted by Home Technology (@twicebuilt) on Sep 25, 2015 at 10:56am PDT

  //platform.instagram.com/en_US/embeds.js

  And here’s what the scene looks like on-site when the panels get delivered:

  Your eyes aren’t deceiving you. That’s our team assembling an entire floor of a house in a matter of hours. Because we can assemble the home so quickly, there are no damaged building materials or lost time due to weather. #PanelizedConstruction #Home #Building #HomeTechnology #Timelapse #worksite #Build #construction #builder #instalike #like #fast #build #instadaily

  A video posted by Home Technology (@twicebuilt) on Oct 30, 2015 at 8:32am PDT

  //platform.instagram.com/en_US/embeds.js

  Ultimately, their vision is to be able to deliver fully closed walls to site. This would mean that all the plumbing, electrical, insulation, and so, would already be in the walls and be ready to get connected/assembled. All of this is a significant step forward.

  Because as Stephen Kieran and James Timberlake argued in their book, this is where the industry is headed. We are headed towards much closer integration across design, technology, materials, and production methods.

  And in the end this is a great thing for both the industry and for consumers. It will translate into less coordination errors. Less construction waste. Less environmental impact. Greater construction efficiency. And much higher quality homes. I can’t wait to see more of this.

  A big thanks to the folks at H+ME Technology for taking the time to speak with me and tour me around their facility. If you’re interested in this space, they will be hosting a Q&A session on Twitter this Wednesday, November 25th at 8pm eastern time. You can join here or using the hashtag #TalkHomeTech. I’ll be tuning in.

  2015.11.23

• The rise of the East

  I love the work that LSE Cities (London School of Economics) is doing with Urban Age. If you haven’t yet checked out their site, you should do that now. If you’re a city geek, it’s the kind of site you can get lost in for hours. Especially if you’re a sucker for great diagrams like I am.

  Here’s one I found today that shows where cities are growing in the world:

  

  Each circle represents a city (well, metropolitan area). The dark green dot is the city’s population in 1950. The lighter green dot is the city’s population in 1990. And the yellow dot is the city’s projected population by 2025. Click here for a larger version of the map.

  What’s fascinating about this diagram is that you can so clearly see how the most significant population growth has shifted away from the West to the rest of the world and in particular Asia. That is, those dots have more yellow than green.

  We, of course, already knew this was happening. And population is just one dimension. But it’s still interesting to see this in diagram form. We are living through the rise of the East. And this diagram is a reminder of that.

  2015.11.19

• Project: Under Gardiner — Re-imagining Toronto’s urban infrastructure

  

  If you’ve been reading this blog since the summer, you might remember that there was a period of time where I wrote incessantly about the removal of the eastern portion of Toronto’s elevated Gardiner Expressway.

  Ultimately City Council didn’t vote the way I believe we should have. But I remain hopeful that somehow we will manage to do the right thing and replace it with a surface boulevard. Now – before the east waterfront gets developed – is the right time to make that happen.

  However, the western portion of the Gardiner Expressway is a different story. The adjacent area is already developed and it is unlikely that this highway is going anywhere any time soon. So for the foreseeable future, we are stuck with it.

  And if we are stuck with it then we should make the absolute best of it – even celebrate it. Which is why Toronto is buzzing right now with the news that a 1.75 km stretch under the western portion of the Gardiner Expressway will be remade into a vibrant public space by 2017. This is thanks to a generous $25 million private donation. (Is that enough money?)

  Here’s the overall programming strategy, going from west to east (via undergardiner.com):

  

  And here are two renderings:

  

  The first phase is expected to run from Strachan Avenue in the west all the way to Spadina Avenue in the east. That is what is shown above.

  Two key elements include a grand stair at Strachan Avenue, which looks like this today (via Google Streetview):

  

  And a pedestrian bridge over Fort York Boulevard, which looks like this today:

  

  All of this doesn’t change my opinion of the Gardiner East, but I do believe that this is an incredibly exciting opportunity for the city. Today the space under the Gardiner is a void in our public realm.

  I also think it could be quite interesting to have these two opposing urban conditions along the central waterfront. A linear underpass park in the west and an open air boulevard in the east.

  It’s also exciting to see private money step up. It goes to show you that there is no shortage of passionate city builders in this town.

  Top image courtesy of Harry Choi Photography.

  2015.11.17

• What a “buy now” button will mean for the new construction real estate industry

  

  https://500px.com/embed.js

  Recently it has been in the news that BuzzBuzzHome.com – the new construction real estate site – will be launching a “buy now” feature in the new year (2016).

  This will allow people to buy condos and homes online with their credit card, which means that people will be able to pay the $5,000 deposit online and process all the paperwork that today happens within a sales office.

  This is huge.

  If you’re somebody who has used a computer and the internet before, the process today feels archaic. Typically you go online to register for a project and then somebody will call you to arrange an appointment. If you ask them to email you the price sheet and floor plans ahead of time, they’ll almost always tell you that they can’t do that and that you’ll need to come into the sales office for an appointment. 

  But what about if you end not liking the floor plans and you’re about to waste a few hours of your time? Too bad. The sales funnel requires you to be present in person. This is nothing against the many talented sales professionals working in new construction; it’s just that if I can design and price out a car online and if Mark Cuban can buy a $40 million jet online, then I should be able to shop for a new condo online.

  BuzzBuzzHome has been chipping away at the current model for years and they’ve managed to get a lot more information online than was previously available. When Matthew and Cliff first launched BuzzBuzzHome in the late 2000s it was almost unheard of for developers to put any sort of pricing and floor plans online. Now they at least have some of that on their site. I’m glad they stuck with it.

  Because what’s equally exciting about what BuzzBuzzHome is doing is that in order to offer a “buy now” feature, they also need to have an accurate account of all developer inventory on hand. And so alongside this “buy now” feature they’re also building out a full cloud-based inventory management system for developers. 

  This means that BuzzBuzzHome will soon be managing the supply-side of the new construction marketplace. Think of the data and analytics you can extract from a platform like this. It’s going to bring much greater transparency to this industry.

  But if your business is in any way connected to the new construction real estate market, I would take this morning and think about how the above innovations could impact your business model. I can think of a few winners and losers.

  Some of you might be thinking that people aren’t going to make the biggest purchase of their life online. But I would bet the farm that many people will. I know I would.

  2015.11.12

• #donthave1million

  

  https://500px.com/embed.js

  After I wrote this week’s post about Chinese homebuyers in Vancouver, I was surprised to learn about the racism debate that flared up in the city / on Twitter. I guess this really is a touchy subject. (See: #donthave1million)

  My reaction to the research was: Great to see someone (Andy Yan) putting in the time to try and better understand a market phenomenon. It’s painful how opaque real estate markets can be. Let’s get even more data so that we can make even better policy decisions. I didn’t read it as: let’s deliberately single out a race.

  Because the reality is that we all knew this was happening.

  Bloomberg recently published an interesting and related article that talks about China’s money exodus and how the Chinese logistically get their money out of the country. There are restrictions in place. 

  But first, here are two snippets from Bloomberg that describe the order of magnitude we’re talking about:

  This flood of cash is being felt around the world, driving up real estate prices in Sydney, New York, Hong Kong and Vancouver. The Chinese spent almost $30 billion on U.S. homes in the year ending last March, making them the biggest foreign buyers of real estate. Their average purchase price: about $832,000.

  In total, UBS Group estimated that $324 billion moved out last year. While this year’s numbers aren’t yet in, during the three weeks in August after China devalued its currency, Goldman Sachs calculated that another $200 billion may have left.

  Now here’s how it is being done:

  It works like this: Chinese come to Hong Kong and open a bank account. Then they go to a money-change shop, which provides a mainland bank account number for the customer to make a domestic transfer from his or her account inside China. As soon as that transaction is confirmed, typically in just two hours, the Hong Kong money changer then transfers the equivalent in Hong Kong or U.S. dollars or any other foreign currency into the client’s Hong Kong account. Technically, no money crosses the border – both transactions are completed by domestic transfers.

  And here’s a snippet that stood out for me because it shows how easy this has become:

  While the first exchange has to be set up face-to-face, customers can place future orders via instant-messaging services such as WhatsApp or WeChat, and money changers set no limit on how much money they can move.

  Given the scale and complexity of this issue – housing affordability – I have to believe that cities and policy makers would be far better off with more, rather than less, information. I hope we can work towards that.

  2015.11.07