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: housing

  • Unzipped wall on King Street West

    image

    Last night I checked out the Unzipped Toronto exhibition, which is the relocated Serpentine Pavilion (pictured above) that was designed by Bjarke Ingels Group in 2016. 

    It was initially housed in Hyde Park London, but it’s now on King Street West Toronto. Westbank purchased the “unzipped wall” after it was installed in London and supposedly it will eventually find a permanent home in Vancouver.

    The official opening of Unzipped Toronto is September 15th, 2018. It will be free and open to the public. If you’d like to get a complimentary ticket, you can do that here

    The timing of all this lines up with condo sales for Bjarke Ingels’ first project in Toronto. I believe that will be starting this fall. And I am sure they will end up setting some new records for the King West submarket.

  • How Singapore fixed its housing problem

    There are a number of affordable housing plans being thrown around in Toronto right now given that we have a municipal election coming up this fall. 

    From what I have read, the plans are largely centered around surplus and/or available public land and possibly some subsidies. 

    These subsidies are very important because the money has to come from somewhere. This is often overlooked.

    In light of these debates, I thought I would share a short Bloomberg video that my friend Evgeny shared with me this morning all the way from Tokyo.

    The video is about how Singapore fixed its housing problem. If you can’t see it embedded below, click here.

    [youtube https://www.youtube.com/watch?v=2cjPgNBNeLU?rel=0&w=560&h=315]

    It strikes me as being very Singaporean.

  • The real reason people oppose new development

    image

    A good friend of mine just sent me this fascinating research paper called: Opposition to Development or Opposition to Developers? Survey Evidence from Los Angeles County on Attitudes towards New Housing. It is a study out of UCLA that was published earlier this year by Paavo Monkkonen and Michael Manville.

    For the paper, they conducted a survey-framing experiment with over 1,300 people in Los Angeles County to test how strongly they felt about a number of common anti-housing sentiments; arguments such as traffic congestion, neighborhood character, and strain on local services. 

    However, they also introduced another argument: large developer profits. And interestingly enough, they discovered that respondents were 20 percentage points more likely to oppose a new hypothetical housing development when the survey was framed around the developer making a lot of money.

    Here is a table from the paper showing the various frames, as well as the percentage of people who supported, had no opinion, and who opposed. Note that under the “developer” frame, the opposition number is 48%.

    image

    So their “takeaway for practice” is as follows: “Housing opposition is often framed as a form of risk aversion. Our findings, however, suggest that at least some opposition to housing might be motivated not by residents’ fears of their own losses, but resentment of others’ gains.”

    Photo by Cameron Stow on Unsplash

  • Supreme Court dismisses TREB appeal

    Last Thursday the Supreme Court of Canada announced it would not hear an appeal from the Toronto Real Estate Board regarding a 2016 Competition Bureau decision aimed at giving consumers greater online access to information, such as historical (home) sale prices.

    I am not at all surprised by the Supreme Court’s decision and I have said pretty much all I want to say on this topic – over here. But since I believe this is a positive outcome for real estate consumers, I wanted to mention it on the blog because it appears to be a final decision.

    Some sites, such as Zoocasa, have already started publishing sold prices. Good.

  • Photogenic neon in the Junction

    We just finished putting up some additional signage at the future sales office for Junction House. Clean and minimal, but fun. I am pretty pumped with the way everything turned out. Creative and photos by Vanderbrand. Instagram story mashup and failed neon photo by me.

    This week I learned that properly photographing neon takes a bit of work. The neon “Junction House” sign is actually all white when you see it in person. Apparently it has something to do with the frequency. 

    I’m going to go back one evening with my tripod and Fuji and see if I can do better.

  • Economies of scale in the car and housing industries

    Over the weekend I watched this interview discussion between Elon Musk and Marques Brownlee. If it doesn’t show up below, you can find the video here.

    [youtube https://www.youtube.com/watch?v=MevKTPN4ozw&w=560&h=315]

    Elon figures that if Tesla works really hard they could probably come out with a USD 25,000 car in about three years. The key to that affordability is twofold: (1) design & technology improvements and (2) scale. 

    So part of the answer is just time. As design and engineering iterations continue to take place, the components will become better and cheaper, just as they have for things like cell phones. Elon estimates that we’re in the 30th iteration of the cell phone today.

    But the second factor is simply volume. And that got me thinking about housing production and the similar importance of scale and density. We do a lot to limit volume, despite saying we want more affordable housing.

  • The biggest challenge in revitalizing the Rust Belt

    image

    Jason Segedy, who is the Director of Planning and Urban Development for the city of Akron, Ohio, recently penned a two-part series in the American Conservative about urban revitalization in the Rust Belt. Part two is specifically about the importance of new housing in “cities left for dead.”

    As I was reading through the piece, my first thought was that it would be a good follow-up to yesterday’s post on “winner-take-all-urbanism.” The contrast between alpha cities like San Francisco and Rust Belt cities like Akron is stark.

    The former city can’t build housing fast enough. And the latter city was forced to implement a citywide, 15 year, 100% residential property tax abatement program just to induce new investment. Any and all new housing is eligible.

    But as I got further down the article, I was struck by something else. I was surprised to hear Segedy say that, rather than market forces, community opposition is “perhaps the biggest challenge of all” when it comes to delivering new housing in these markets.

    Here is a longish excerpt that I would encourage you to read:

    Although you might think that people living in neighborhoods with a large number of abandoned houses and vacant lots would be thrilled to see new houses being built, you might be surprised to learn how often this is not the case. Sometimes neighbors prefer to have the vacant lot remain as green space. Sometimes they worry that the new housing will not be expensive enough, and will bring their property values down. Other times, they worry that the new housing will be too expensive, and will bring their property values (and taxes) up.

    When it comes to new housing, everyone is a critic. I have heard people complain that housing which they will never live in is too dense; that housing which they will never purchase is too expensive; that housing which they will never be inconvenienced by will generate too much traffic; and that housing which they will never look at is not architecturally appealing.

    After 23 years as an urban planner, I can honestly report to you that, contrary to popular belief, most people are strongly in favor of heavy-handed and draconian government regulation of private property—as long as it is someone else’s private property, and not their own.

    Residents and community activists who are opposed to new housing often demonize the real estate development profession as being “greedy”, overlooking the fact that their own home was developed by a developer, built by a builder, and sold by a realtor—most likely for a profit. This isn’t to argue that every development professional is a white knight, but it is important to remember that the vast majority of people who work in the real estate and construction sectors are not the enemy of neighborhoods. Without them, there would be no neighborhoods.

    According to Segedy, Akron has lost 32% of its peak population. Cleveland has lost 58%. And Detroit has lost 64%, leaving almost 1/3 of its land parcels vacant. (These are 2017 figures.) Surprisingly, this doesn’t appear to change how many people feel about new development. 

    No more new housing. We’re full. Unless, of course, that housing is for me.

    Photo by Nolan Issac on Unsplash

  • Firm Profile: APOLLO Architects & Associates

    This afternoon my friend Gabriel, of Gabriel Fain Architects, sent me the work of APOLLO Architects & Associates. They are based in Japan and South Korea. Here is a preview of some of their “private houses”:

    There is a lot that I love about these homes. 

    I love their simplicity. Look at this handrail detail. Nothing more than what is absolutely necessary.

    I love their modesty. Many of the above homes hover around 150 square meters and many of them are much much smaller. 

    I love that each project’s description starts by talking about the owners and the site conditions, signaling that each home represents an individual response tailored to both the occupants and the context.

    And I love that many of these homes have been built on unthinkably small parcels of land in dense urban settings; parcels that would be dismissed as entirely useless in other parts of the world. 

    The site area for this home is 46.53 square meters and the building’s footprint is 36.93 square meters.

    Of course the Japanese housing market is a unique place. It’s worth pointing that out

    But as I browsed through what are effectively custom single family homes, I couldn’t help but be reminded that there’s a fine line between need and want.

    Small can be very beautiful. But small is also subjective.

  • Condo rents in Toronto are up 11.2% from last year

    Yesterday Urbanation released its Q2-2018 rental report for the Greater Toronto Area. It tracks both purpose-built rentals and condominium rentals, the latter being condominium units that are listed for rent on MLS. The average condo rent, for all unit types across the GTA, is up 11.2% year-over-year to a face rent of $2,302 per month.

    Here is a chart from the Globe and Mail:

    The former City of Toronto, which includes downtown, is actually up 13.5%:

    But here are the stats that I really wanted to draw your attention to today (figures from the Globe).

    According to Urbanation, there were some 384,000 condo apartments in the Greater Toronto Area in 2017 and nearly 1/3 of them were rented out. Given that the Canada Mortgage and Housing Corporation pegs the total number of rental apartments in the GTA at approximately 311,596, condo apartments represent about 40% of all our rental housing stock.

    So condo buildings are actually doing quite a bit of heavy lifting when it comes to providing rental housing in this region.

  • Why Millennial homeownership is so low

    The Urban Institute has a new study out that looks to explain why Millennial homeownership rates are lower than that of previous generations. The typical refrain is that Millennials have a lot more student debt and that the cost of housing in urban centers has risen faster than income levels. But this report tries to put some math behind those explanations. All data is for the US.

    Not surprisingly, marriage and kids are significant drivers, and Millennials appear to be delaying both. According to the study, being married increases the probability of owning a home by 18%. If marriage rates in 2015 were the same as they were in 1990 (this is the time period for the study), the Millennial homeownership rate would be 5% higher. Having a kid increases the probability by about 6.2%.

    There’s also a widening spread between the homeownership rates for more educated and less educated Millennials. Presumably the distinction is a 4 year university degree. Between 1990 and 2015, the spread between the two groups increased from 3.3% to 9.7%. This was identified as an area of “great concern” because of the possible long term implications.

    Combine this phenomenon with the stats that white households have a higher homeownership rate compared to all other racial groups and that having parents who are homeowners increases the likelihood of also owning a home (let’s ignore, for a second, the other intergenerational transfers of wealth), and you have a recipe for rising wealth disparities.

    Of course, some of you will undoubtedly argue that in this part of the world we are overly fixated on homeownership as a mechanism for wealth creation. I mean, there are many examples of very wealthy countries with homeownership rates that are far less than what they are here in Canada and the US. But that’s a discussion for a different blog post.

    If you’d like to go through the full Millennial Homeownership report, you can do that here.