Tag: development

• Looking at Berlin from the back of a napkin

  

  Depending on who you ask, the current condo boom in Toronto might be viewed as either a good thing or a bad thing (most will have an opinion). Some people think we’re simply building too many condos. And that too many of them are small, crappy, and geared towards investors – as opposed to end-users.

  While I do agree that we could be doing more to create complete communities – that is communities which serve everyone from young singles to families with 3 kids – I think there are also a lot of positives associated with Toronto’s condo obsession (full disclosure: I’m a real estate developer). It has made us more sustainable, more reliant on alternate forms of (non-car) transport, and it has made us a generally more exciting place to live.

  But that doesn’t mean we can’t do better.

  Lately I’ve been wondering about how other cities do it. Specifically, those European cities that somehow seem to always be able to build awesome housing projects. So today I thought I would pick one and profile it. What I really wish I had was a financial pro forma to share with you all, but in the absence of that, I’ll try and back into some of the numbers on my own.

  

  Shown above is the 9-storey Charlotte Apartments in Berlin. It was developed by WI Concept and designed by Michels Architecture Office. I chose this building because I think it’s an attractive one and because it’s of the (mid-rise) scale that Toronto is trying to promote along its many avenues. Here are the stats I was able to find online:

  • Site area: 347 square meters / 3,735 square feet
  • Building area: 3,000 square meters / 32,291 square feet (says gross floor area, but I don’t know if that means the same thing as it does here)
  • Construction costs: €3.6 million / C$5,065,691 (as of today’s rate)
  • Units: 28 (sold within 1 week of launch)
  • Market: ~70% of buyers in Berlin are believed to be foreign investors

  Now, if we were actually building a development pro forma, we’d want to get a lot more granular in our calculations than what I’m about to do. We’d want to know gross construction area, net saleable areas, and so on. But for the purposes of this post (and because I have very little information), I’m going to simplify and do a back of the napkin set of calculations.

  Based on above, the FSI (or density) is about 8.65 (32,291 sf / 3,735 sf). That’s roughly in line with many of the residential developments we’re seeing in downtown Toronto. The average unit size works out to be about 1,153 sf (32,291 sf / 28 units), but in reality it would be less if that 32,291 number is truly the gross floor area. You would need to subtract the corridors and other non-saleable areas from it before doing this calc. Either way, that is big compared to most downtown Toronto condos, but small for Berlin standards according to this ArchDaily article. Finally, if we look at construction costs, we get $157 per square foot in Canadian dollars ($5.065M / 32,291 sf). That’s low. I wonder what the land costs were.

  Again, these numbers are rough rough. But I wanted to try and dissect a European development project and compare it to Toronto. The most surprising figure seems to be the low construction costs. If you have any additional insights, I would love to hear from you in the comment section below.

  Images: Werner Huthmacher
  

  2014.10.05

• Ontario allows wood frame buildings up to 6 storeys

  Yesterday it was announced that, starting January 1, 2015, the Ontario Building Code would be changed to allow wood frame buildings up to six storeys. Previous to this, the highest you could go was 4 storeys. 

  This change has been in the works for a number of years. And it’s already allowed in most of Europe and in other places in Canada, such as British Columbia. So it’s nice to see this finally happen here in Toronto.

  The reason this is a big deal, and worthy of a blog post, is that it changes the cost structure for mid-rise buildings. Simply put, wood frame buildings are cheaper to construct compared to reinforced concrete and other buildings materials.

  Some people think this just means developers will make greater returns. But I don’t think that’s the case (see microeconomics). The real opportunity here is to spur mid-rise development on sites that – before this change – would have been previously un-developable. That is, you just couldn’t make the numbers work.

  As much as mid-rise buildings make a lot of sense from an urban design standpoint, it’s not always easy to find good mid-rise development sites. Mid-rise buildings are generally less efficient to build compared to towers and you have a lot of fixed costs that don’t scale down just because you’re doing a smaller project.

  So what this change in cost structure will, hopefully, do is allow more product to enter the market. And since many big urban centers operate with perpetual supply deficits – precisely because it’s often so hard to build – this should actually help with affordability.

  2014.09.25

• True Condos Podcast: Transparency in the Real Estate Industry

  A few weeks ago I was invited by Toronto realtor Andrew la Fleur to participate in his True Condos podcast series. I had actually never met Andrew before in person, but I knew of him because of Twitter, his blog, and because he was an early user of my past startup, Dirt.

  I was initially a bit apprehensive about being on a realtor podcast, because I thought it might end up as some sort of cheesy marketing piece. But I’ve come to learn that Andrew is not that kind of guy. He’s also interviewed some really great people in his podcast series (here’s the full list), so I feel honored to have been invited. 

  I’ve embedded the podcast below, but if for whatever reason you can’t see it, click here to be redirected to Andrew’s site. We talk for about 30 minutes, with a big focus on openness and transparency in the real estate industry. Thanks again for the invite Andrew. It was great to meet you in person.

  http://www.podbean.com/media/player/audio/postId/5289048?url=http%3A%2F%2Ftruecondos.podbean.com%2Fe%2Fbrandon%2F

  2014.09.23

• Rise of rental

  

  Last month Oxford Properties submitted a site plan application for the redevelopment of the rundown Cumberland Terrace in Toronto’s Yorkville neighborhood. If you’d like to browse the full application (including all the drawings), you can do that here.

  The proposal is a departure from previous plans and now includes 3 buildings: a 4.5 storey building, a 2.5 storey building, and a midblock 54 storey residential tower (the lobby is shown above). There will be both retail and residential uses.

  For those of you familiar with the mall, it should go without saying that Cumberland Terrace is in desperate need of redevelopment. So I’m not going to talk about that today. Instead, I’d like to mention 2 other points that stood out to me about the application.

  The first is the 2 midblock connections on either side of the tower, running from Cumberland Street to Mayfair Mews in the rear (see below). Yorkville has a history of intimate laneways, and so it’s nice to see some of this being carried through in a new development. It also opens up the opportunity for an improved Mayfair Mews.

  

  Secondly, it’s somewhat surprising to see that the 54 storey residential tower is being proposed as rental. Toronto doesn’t build a lot of purpose-built rental apartment buildings. There are some (from the likes of Morguard and Concert Properties), but we haven’t done it at scale for decades. And that’s largely because the demand for condos has been so great.

  But recently I’ve been noticing a renewed interest from the real estate community in multi-family rental assets. Cadillac Fairview also proposed a 65 storey rental building at the north west corner of Yonge Street & Queen Street last year – though they later withdrew their application.

  

  In the US, rental apartments as a share of all new housing is also at record highs – over 30%. And that’s partly because credit remains tight (certainly compared to pre-2008) and economic growth has been tepid. But also because of demographic changes. People are having fewer children, later in life, and so many are putting off buying.

  So I think we’re going to see even more rental apartments being built in Toronto in the coming years.

  2014.09.16

• Toronto approves 755 storeys of new development

  

  Earlier this week, Toronto City Council approved the equivalent of 755 storeys of new development, a lot of which will end up in the downtown core. The translates into 6,887 new housing units and roughly 4 million square feet of new commercial space. The Globe and Mail called it the Manhattanization of downtown.

  If you’d like to go through the complete City Council meeting agenda, you can do that here. (I warn you though, it won’t be an exciting read.)

  One notable project that was approved is 50 Bloor Street West, which is a 71-storey mixed-use building in Yorkville adjacent to and on top of Holt Renfrew (It includes a $6 million Section 37 contribution). I mention this one because it’s impressively tall and because it’s a project that I was involved with when I was at Morguard. Watch for Yorkville in the coming years, there’s a lot in the pipeline.

  While I think this is all incredibly exciting, our chief planner, Jennifer Keesmaat, is entirely correct in pointing out that all of this highlights the desperate need for better infrastructure, the most critical of which is a relief subway line that cuts across downtown.

  But to be clear, this isn’t a question of just planning for growth. This is a question of planning for growth and making up for decades of infrastructure disinvestment. That’s the position we’re in today, which means we have a lot of hard work to do. Though I’m confident we’ll get it done.

  The other thing that this level of intensification should highlight for you is that public transit, and other forms of mobility such as biking and car sharing, have to be central to our goals. It’s simply infeasible for everybody to be driving around in a car. We’re currently demonstrating how efficient that ends up being.

  So as Toronto continues to intensify, I think we’ll quickly discover that traffic and private cars aren’t the answer or even the right question to be asking.

  Image: Flickr

  2014.08.29

• #ATHISCITY

  One of the things that makes cities so exciting is the fact that they’re always changing. New restaurants open up. New buildings are built. Old buildings (with no heritage value, of course) are demolished. Bike lanes are added. New infill homes pop up in quiet residential neighborhoods. And the list goes on.

  For years I’ve wanted an app or some sort of product that would allow city builders to keep track of everything that’s going on in their city. In the same way that Foursquare helps you find cool restaurants around you, I would like to know about everything that’s going on, from rezoning applications to construction updates.

  One of the challenges, of course, is that I’m sure more people care about cool new restaurants than about esoteric planning applications. It’s definitely a niche market. But that doesn’t mean there isn’t a thriving group of people who do care. So I’ve decided to introduce an Architect This City hashtag on Twitter: #ATHISCITY.

  I’ll be using it for city building updates and, if some of you join in as well, I think it could become a great way to keep track all of the neat things that are happening in our city, as well as in others around the world.

  2014.08.21

• Is it time to get rid of parking minimums?

  The cost of a parking spot in downtown Toronto has reached as high as $60,000 (per stall) in some new construction projects. If you convert that to a per square foot price (which is typically how people measure condo prices), you’re looking at over $350 per square foot for that parking stall. Is it worth it?

  Most cities around the world have what is called a parking minimum. This means that to build, say a new residential condo, developers need to provide a certain number of parking stalls. In Toronto, those minimums will depend on your unit mix. Bigger units have more stringent parking requirements. 

  In some cities, though it’s much rarer, they actually have parking maximums. Portland, for instance, has a maximum number of parking stalls that you’re allowed to build, which fluctuates based on the development’s proximity to transit.

  And finally, there are some cities, such as Berlin, with no parking minimums or maximums at all. In those cases, the market dictates the number of parking stalls that should be built. If people want a parking spot with their apartment and won’t buy or rent it without one, then the developer builds it.

  Though parking variances do happen in Toronto (for reasons such as proximity to transit), the city is generally skeptical of a market led approach to parking requirements. And there are a couple of reasons for that. They worry that investors might be buying the units (with no parking) and so the sales data may not be indicative of the end-user market.

  The city also worries that developers might actively discourage purchasers from buying parking spots, as it’s usually more profitable not to build them. Underground parking is costly and often subsidized by the sale of the condo units themselves. In fact, I’ve heard of instances where underground parking has cost upwards of $100,000 per stall because of buoyancy forces and other technical details.

  But I’m generally a free market guy. So I question if the market really isn’t capable of figuring out how much parking there truly needs to be. Undoubtedly, there will be families who demand 2 parking spots. I also bought a parking spot with my condo. But there may also be a number of people who would rather pay less for their home than subsidize a parking garage that they’ll rarely use.

  And as I wrote in a recent post called, Is traffic the right question?, we could be losing sight of the greater goal. If we truly want to build a sustainable and livable city, then we should be considering how our development activity encourages transit usage over driving, and how we can promote a more balanced modal split across the city.

  What are your thoughts? Would you buy a home without parking? Should we get rid of parking minimums, just as cities like Berlin have?

  2014.08.20

• Public consultation is broken

  Public consultation is broken. And by that, I mean that the way in which municipalities, developers, and other city builders solicit feedback from communities is fundamentally flawed.

  For new developments, the process works more or less like this: The developer makes an application to the city. The city reviews it and then agrees to move towards a public/community meeting (the goal of which is to solicit feedback on the proposal). Once a date is set, notices go out, and the developer secretly hopes that no one will show up. 

  Because what often ends up happening is that it’s only the people with the time or a bone to pick who actually go to these things. Rarely do people go simply to voice their support for a project. That’s why the benchmark for success is usually no community opposition – it’s rarely about support.

  But from writing Architect This City, I know that many of you care deeply about your community and about cities in general. The problem, is that I don’t think most of you get a chance to voice your opinions. How many of you have actually gone to a community meeting in order to show your support for a development project or city initiative? I’d be curious to know, but I suspect most of you haven’t.

  The result is a system whereby the voice of a few (often naysayers) have a disproportionate amount of weight. They set the tone. But that’s not how community input works best. It needs to be representative of a broad and diverse cross section of the population. It needs to be inclusive. Everyone in the community should have a say.

  So today I was thinking that there’s an opportunity for somebody out there to create an online platform for community feedback. Developers would post up their project and then everyone in the community, as well as in the larger city, would have an opportunity to vote on it and provide their feedback.

  To make it fair, you could assign higher weights to people the closer they live to the project. But the idea would be to make it as easy as possible for everyone to provide feedback – whether they’re on their smartphone or at the regular community meeting. 

  Obviously this would require greater openness, but I don’t think that pulling back is the answer to this problem. The solution isn’t to hide from the potential naysayers; it’s to galvanize the supporters. 

  If your community already has a platform like this, please share it in the comment section below. I’d love to see it.

  2014.08.19

• Pre-delivering new homes

  

  Today was my mother’s PDI for her new condo. For those of you who aren’t in the industry, a PDI is a “pre-delivery inspection” that happens about a week or two before you take occupancy of a new home. It’s basically a time for you to identify all the mistakes that the construction team has made and have them (hopefully) correct them before you actually move in.

  But for someone like my mother who is making the move from a house that she’s lived in for decades, a PDI is actually something much more significant: It’s the first time she saw her new “home.” And a home is something much different than just a house or a condo – it has emotional significance.

  It’s going to be an adjustment for her. One of the first things she did was open up the oven to see if she could fit her Christmas turkey in it. But in the end, I have no doubt that she’s going to love her new home. As I’ve mentioned before, people often overestimate the potential risks of change. But never be afraid to give up the good to go for the great.

  2014.07.26

• How Toronto is growing

  If there are two things we like to talk about here in Toronto it’s that there are a lot of condos going up and that it’s becoming increasingly difficult–some would say impossible–to get around. Just this past weekend, I had 2 or 3 people tell me that biking is the only practical way to get around downtown and that it’s fairly easy to outwalk a streetcar on either Queen Street or King Street.

  Usually these statements are followed by a question, asking what the city is doing to address these issues. The unfortunate reality is that I think urban mobility is going to get worse before it gets better (although I am thrilled about the Eglinton Crosstown line now under construction). If you’re a regular reader, you’ll know that I’m a supporter of a Downtown Relief Subway line and that I was disappointed by John Tory’s recent transit proposal.

  The best way to explain why I feel this way is to talk about how and where Toronto is growing. In my post on John Tory’s transit proposal, I talked about how Toronto is developing in the shape of an upside down letter T. And the reason for that is because in the city’s Official Plan, the “Downtown and Central Waterfront” area is identified as a growth node and is shaped more or less like an upside T. It’s the light orange in the following map.

  

  In addition to the downtown core, the areas shown in red are earmarked as “Centres” for growth. There’s one in each borough (Etobicoke, North York and Scarborough) and one at Yonge & Eglinton, which most people would consider to be the heart of midtown. Finally, you have the “Avenues” which are the greenish brown lines on the above map. Those are areas that city also hopes will accommodate future growth.

  Now, let’s look at where development is happening in the city. Here’s residential development from 2008 to 2012. The biggest circle represents 2,000 proposed residential units.

  

  And here’s non-residential development. The largest diamond represents projects with a non-residential floor area greater than 50,000 square meters (~540,000 square feet).

  

  What should become immediately apparent is that growth–particularly on the residential side–is happening more or less according to plan. The biggest “outliers” are really the development happening along Mimico’s waterfront and all the development happening along Sheppard Avenue East. But those are because of the water and the Sheppard subway line.

  In both the residential and non-residential cases though, the downtown and central waterfront area is quite clearly receiving a significant share of the development happening in the city.

  

  Which always makes me wonder: Why are we so reluctant to build proper transit in the core?

  The city’s Official Plan is clearly funneling growth to downtown and yet we continue to propose, fund, and build subway lines in areas where the population densities are lower and ridership levels will inevitably be less. Which ultimately means that the required government subsidies to keep those lines operating will be higher.

  I’m not suggesting that the inner boroughs don’t also need top notch transit and infrastructure. They absolutely do. But I get frustrated when politics trumps rational city building. And so does everybody else who’s stuck with inadequate mobility options.

  Images: City of Toronto

  2014.06.02