Brandon Donnelly

Daily insights for city builders, delivered every morning at 6 AM ET. I’m Brandon Donnelly — a Toronto-based real estate developer and founder of Globizen. I’ve been writing here since 2013.

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Tag: germany

  • Mapping 70,000 trains across Europe

    I just came across a fascinating visualization of rail in Europe. You can also visualize other places like the US, but as you know, there isn’t much to see there in the way of trains. What is shown in the above screenshot is Germany, the Benelux, Switzerland, and France. I paused the visualization at 7:20 AM and there were 5,293 trains running, with the vast majority of them (4,360) being regional rail.

    Here’s what stood out:

    • France operates a monocentric hub-and-spoke network with Paris as the clear central hub. Trips almost always route through Paris, which reflects France’s historically centralized economy. In contrast, Germany operates a decentralized mesh network with more point-to-point travel and no single dominant city.
    • Regional rail is the workhorse. When I paused the visualization, over 82% of the trains in operation were regional rail. High-speed rail is sexy, but it clearly needs to be supported by a dense regional grid that brings people to and from major high-speed routes.
    • Smaller countries like Belgium, the Netherlands, and Switzerland have such a dense network of intercity rail that they almost read as continuous urban regions.

    If you love trains, as I do, you’ll want to take a look.

  • Balkonkraftwerk

    Germany has, over the last 2 years, really gotten into balcony solar panels:

    The ease of installation and a potent mix of government policies to encourage adoption has made the wee arrays hugely popular. More than 550,000 of them dot cities and towns nationwide, half of which were installed in 2023. During the first half of this year, Germany added 200 megawatts of balcony solar. Regulations limit each system to just 800 watts, enough to power a small fridge or charge a laptop, but the cumulative effect is nudging the country toward its clean energy goals while giving apartment dwellers, who make up more than half of the population, an easy way to save money and address the climate crisis.

    Of course, there’s only so much that panels like these can produce. By some estimates, a “large well-positioned balcony” might only produce 15% of a home’s electricity needs. But hey, that’s still something, and it seems like something that Toronto should be looking at.

    We also have balconies.

  • Should more people live together?

    We know that, for a variety of reasons, more and more people are living alone. As of 2018, single-person households represented about 28% of all households in the US. This is up from 13.1% in 1960.

    Here in Canada, single-person households became the predominant household type in 2016 (we’re also at 28%) for the first time in Canada’s 150+ year history. And the numbers are even higher for some European countries. In Finland, Germany, and Norway, more than 4 in 10 households are single-person.

    Part of this has to do with people living longer. In Canada, 42% of people aged 85 or older (and living in a private household) live alone. But part of this is also cultural. Japan has one of the oldest populations in the world, but it doesn’t have the highest percentage of single-person households. Although, the number is relatively high and increasing. It’s nearly 40%.

    Whatever the case may be, you could argue that there appears to be some sort of global trend line toward more people living alone. But here’s an important question: Is this a good thing?

    Albert Wenger recently argued in this blog post that, actually, we need new forms of living together. Whether it’s multigenerational living or coliving with like-minded friends, there are clear benefits to living with other people. You get to share resources. You get elders that can look after kids. And you get company.

    There’s also an opportunity to curate your environment. As Phil Levin puts it on his coliving blog Supernuclear: “If your home is filled with motivated people, you will be more motivated. [And] if your home is filled with funny people, you will laugh more.”

    Albert posits that office conversions (which are obviously in vogue right now) could serve as an opportunity to rethink our built environment around coliving. And while this is certainly true, I’m not sure we need it to happen. There are ways we can live together today, within our existing environment, if we want to.

    The question is: do we?

  • Global electric vehicle adoption

    This is the current state of global electric vehicle adoption:

    • Last year was the first year that global electric-vehicle sales reached 10% of all car sales — the total was around 7.8 million cars (see above chart)
    • Fully-electric vehicles accounted for about 5.8% of all car sales in the US, 11% of all car sales in Europe, and about 19% of all car sales in China — China is leading in this department
    • The US saw 807,180 fully-electric vehicle sales last year — Tesla remains the biggest EV maker in the world
    • In Germany, electric vehicles accounted for about 25% of all new vehicles produced last year — BMW reported a 5% decline in new-car sales, but saw its EV sales more than 2x
    • Similar story with Volkswagen: 7% decline in new-car sales; 26% increase in EV sales
    • This year, some are predicting that China will see EV sales increase to every third car, and that it will reach its tipping point sometime between 2025-2030

    It is obvious where all of this is heading. It is simply a question of how fast, and who will be the leaders at the end of the day.

    All data sourced from the WSJ

  • K-shaped housing market

    If you’ve been following the housing market (in most cities) over the last year, this chart likely won’t surprise you. It is from a recent City Observatory article by Joe Cortright talking about the “k-shaped housing market” that we have seen emerge over the last year. The above is for the US, but I would imagine that the chart would look similar for Canada, as well as for other countries. Here’s an excerpt from the article:

    There’s an obvious explanation for the different trajectories of house prices and rents:  Low income workers rent; high income workers own and buy homes. High income households have been barely grazed by the Covid-19 recession.  In fact, the combination of low interest rates and enforced savings (because many kinds of consumption spending, including dining, entertainment, travel and even much retail have been constrained by lockdowns), mean higher income households may find housing a much more attractive spending item.  If you can’t go out to dinner, or take a vacation, you have more money to spend on a new home.  Low wage workers are in the opposite situation.  Low wage workers have borne the brunt of the recession; they are also much more likely to be renters than higher income households.

    It is perhaps worth reiterating that our fixation on homeownership is not universal. If you live in Switzerland — a very wealthy country — you’re more likely to rent than own. And if you live in Germany, you’re more likely to live in an apartment than in a low-rise house. Still, that doesn’t change the fact that the impacts of COVID-19, and our lockdowns, have been felt unequally. This chart is an example of that.

  • My Basic Income — 1,000 euros a month for a year

    Michael Bohmeyer is the founder of a Berlin-based startup called “Mein Grundeinkommen” or “My Basic Income.” In the six years since he first asked for donations, his company has given more than 650 people a no strings attached stipend of 1,000 euros a month for one year.

    The idea has been to test whether or not a basic income payment could, among other things, improve people’s happiness and improve the way that governments manage their social welfare systems. According to this recent NY Times article, Germany spends almost a third of their GDP on social welfare.

    Since founding “My Basic Income,” Michael has gone on to publish a book and also partner with the German Institute for Economic Research in Berlin. And so far, his findings seem fairly positive. Instead of valuing the money itself, people seem to really value the sense of security that it brings.

    Few people quit working, because a basic income is exactly that — basic. Instead, people seem to be using it to do things like quit that job they hate in order to find a better one. The payment provides some downside protection and that can be empowering.

    This is obviously not a new concept. It’s been tested and even implemented in many places around the world, and it has become increasingly popular as an idea in recent years. So here are some additional data points. If you’re interested in this topic, you may want to check out what Michael has been up to since 2014.

  • Form follows what?

    Late 19th century and early 20th century architecture and industrial design is known for the axiom, “form follows function.” I think of the German Bauhaus School when I hear this, but supposedly it can be attributed to American architect Louis Sullivan. Either way, it was meant to represent a functionalist approach to architecture and design, which was, as is often the case, a reaction to what had come before it.

    It was Modernist architects eschewing decorative elements or what was referred to at the time as “ornament.” If it didn’t serve a functional purpose, it was to be removed. Nothing was to be superfluous. And similarly, if the function of something didn’t change, there was no need to change its form.

    Of course, if it was truly all about function, one could argue that there should have been a great deal of variation in the resulting forms. But instead, the designs that emerged out of schools, such as the Bauhaus, are some of the most recognizable in the world. That is true even to this day.

    Which is why I think this is a great line from Witold Rybczynski (taken from a recent post about the book iBauhaus): “It is also a quintessentially Bauhaus example of form follows predetermined aesthetics rather than form follows function.” Ouch. The difference here is that Witold obviously isn’t a fan of the Bauhaus or of Modernism, whereas this period of time is what inspired me the most as a student of architecture.

    Photo by Marina Reich on Unsplash

  • Berlin apartment rent freeze has frozen capital expenditures

    Last year, the city of Berlin agreed to a five year rent freeze for some 1.5 million flats constructed before 2014. The way it was initially approved is that it would freeze rents at mid-2019 levels and allow for only 1.3% inflationary increases. All of this is being challenged in the courts, but the Financial Times is suggesting that it could still come into force by March 2020. Here is an excerpt from a recent article. (Guy Chazan isn’t holding back about the kind of people that he believes Berlin attracts.)

    The legislation, which should come into force by March this year, is City Hall’s response to a lingering housing crisis that shows no sign of easing. Packed out with Brexit refugees, international party people and wannabe tech entrepreneurs, Berlin is in expansion mode, its population growing by 40,000 a year. Yet affordable housing remains scarce. Rents have doubled over the past decade, as new residential construction fails to keep up with soaring demand.

    As I mentioned before on the blog, these policies are not intended to apply to new buildings. That would surely choke off new construction, which would only exacerbate the underlying supply issue that Berlin is facing. But not surprisingly, this move has also put a freeze on capital expenditures, according to the same FT article. Local trades are complaining that, “It’s as if someone’s just turned out the lights.”

    Photo by Gilly on Unsplash

  • Two-up, two-down

    Feargus O’Sullivan is doing a series in CityLab right now on the “home designs” that define four European cities: London, Berlin, Amsterdam, and Paris. The first one is on London’s classic “two-up, two-down” design, which refers to a two storey home with a living room and kitchen on the ground floor and two bedrooms on the second. It’s a simple design, but one that has supposedly endured.

    O’Sullivan argues that for many, or perhaps most in Britain, this is what a “home” feels like. It’s grade-related and there are two floors. Indeed, only 14% of British people live in an apartment, compared to 57% in Germany (a majority). This percentage is much higher in London, with about 43% of people living in an apartment. But about 25% of the population still lives in some sort of attached house.

    Home equals house. And for us North Americans, this is of course relatable. But the Germany example is a reminder that this is not necessarily universal. Attitudes toward housing are cultural. And cultures can and do change. I am seeing that happen right now in Toronto. Some of us are becoming less like the British and more like the Germans.

  • Berlin approves rent freeze on existing apartment buildings

    Berlin just approved a five year “rent freeze” on apartments in the German capital. The rent caps will be implemented on January 1, 2020, but will apply retroactively to all rental agreements from June 18, 2019 onward (which is when the decision was made). It is estimated that this new law will apply to some 1.5 million apartments.

    The move is in response to rapidly rising apartment rents, which grew about 12% in 2017 alone. So I can appreciate where this is coming from.

    From what I have read, it will not apply to new construction, which is the first thing I checked when I saw the decision. That would have almost certainly choked off any new apartment construction in the city. With a capped top line, it wouldn’t take long for costs to increase and make new rental construction infeasible.

    That said, a similar squeeze is liable to happen for existing buildings. It is one thing to cap rents (revenue), but what about utility, maintenance, labor, and other operating costs (expenses)? As costs rise and operating margins tighten, it can become exceedingly difficult to reinvest in, or even maintain, an apartment building.

    For more on the announcement, here’s an article from FT.