Tag: housing

• The third Los Angeles

  

  I just stumbled upon an interview with Christopher Hawthorne (architecture critic for the Los Angeles Times) talking about a “third Los Angeles.” 

  His argument is that the first Los Angeles ran from about 1880 to World War II, and was characterized by a form of urbanism that most of, today, do not associate with LA. It was a city of streetcars, innovative multi-family housing, and local landscapes.

  The second Los Angeles was the second half of the 20th century. And it is the LA that probably comes to mind for most people when they think of LA. It is the city of freeways, single-family homes, and sprawl.

  The third Los Angeles is the city’s most recent iteration and started sometime around 2000. Like many things in life, it is in some ways a return to the past: namely the first LA. It is about urban intensification, transit, and more drought resistant landscapes. It is a city that senses its geographic limits.

  I like how he talks about some of the challenges associated with intensification and this third LA:

  “People in very good conscience who live in Santa Monica or San Francisco think of a moratorium on development as a progressive thing to support rather than reactionary or conservative or just in their own political self-interest. I don’t have a problem with somebody who bought a house at a certain point saying, “I bought into a certain place, you know, I want it to stay this way, and I’m going to use whatever resources I can to keep it that way.” They have every right to say that, even if I disagree. I have a problem with people saying that’s consistent with a progressive agenda about cities or a forward-looking attitude about the environment or about resources. It’s not.”

  2017.01.03

• Triple-glazed sliding doors (or walls?)

  After my post about “the great balcony debate”, there was a bit of discussion on Twitter. Ken Wilcox then responded with a video talking about the mixed-use Timmerhuis building in Rotterdam designed by OMA. 

  At the 1 minute mark there’s a clip of one of the residents opening a large set of sliding doors. Here’s a screenshot of what that looks like:

  

  I did a bit of digging on the project and found this fact sheet. The sliding doors in the residential units measure 1.8m x 2.6m. They go from floor-to-ceiling (~8′-6″). The windows are also triple-glazed! (3 glass panes + 2 air chambers.)

  I think this is a great way to open up a suite to the outdoors. It also looks like the glass balustrades sit inside, which keeps the building’s exterior envelope uninterrupted. Some of the other suites have large terraces where the building steps back.

  In case you’re wondering, the construction costs for the entire project was about €100 million and the total gross floor area (including all of the non-residential uses) is about 45,000 m² (~484,200 sf). Unit rate seems reasonable given that triple-glazing is virtually unheard of in Toronto.

  P.S. I am having some technical difficulties with Tumblr (my blogging platform) and Mailchimp (my email service provider). They both had problems and a few daily emails didn’t get sent out. Sorry about that. Hopefully it’s resolved now. If you missed the last couple of posts, you can read them online.

  2017.01.02

• Supply down. Prices up. Unit sizes up.

  This morning BILD released its November new home data for the Greater Toronto Area. 

  The story is one we’ve been hearing for a while. Supply is trending downward. It’s becoming harder to build. And prices are up. The average new detached house in this region is now C$1,230,961 and the average new condo is now C$493,137 (~$601 psf). Overall, average pricing is up 20% for low-rise houses and up 10% for condos, compared to this time last year.

  One of the things that I find interesting about the data is how unit sizes have recently started trending upward on the high-rise (condo) side. Below is a chart from Altus Group that shows what I’m talking about. Look at the increase from the middle of 2015 to today. The average is now 820 sf, compared to what looks to be around 770 sf at its lowest point.

  

  Now, there are a number of possible explanations for this. One is that boomers are starting to sell their houses and move into condos in larger numbers, and 500 sf just don’t do. The market is starting to cater to them. Another possible explanation is that low-rise pricing has become so out of reach for many people and families, that they are now looking to condos to fill that need.

  I see both scenarios playing out in new projects today. But this second scenario, in particular, is one that I’ve been thinking about for a few years now. It’s less obvious than the boomer play. But I think of it as the market maturing. I like seeing families living right in the city and I am sure we will see more of that in the future.

  2016.12.22

• One becomes four

  The New York Times posted an interesting article today talking about how roommates in the city are dividing and conquering expensive rentals using temporary walls. This is obviously not a new practice. But it’s a good case study in what people will do in order to make living in a specific location affordable – in this case, Manhattan.

  The first example is a one bedroom apartment that was converted to a 4-person apartment. Here is the floor plan (from the New York Times):

  

  The living/dining room was divided up using a T-shaped partition wall – which is required to stop 2 feet shy of the ceiling – to create two additional bedrooms. The original bedroom is then shared via two twin beds. Et voilà. Now you have an apartment where the $3,750 per month rent becomes less than $1,000 per person.

  Probably the most annoying thing about this setup would be the lack of acoustic privacy. Since the partition walls don’t go all the way up to the ceiling (photo here), you’d obviously hear everything. One person in the article described it as living in the same room as all of your roommates, but not being able to see anyone.

  Of course, there’s also a space consideration:

  Mr. Meyer, 23, has the smallest room by far. “It kind of feels like you’re living in Harry Potter’s cupboard,” said Mr. Meyer, who is in his freshman year at Columbia after serving for three years in the Israel Defense Forces.

  The roommates, three of whom grew up together in Toronto, don’t mind the close quarters or the lack of privacy. “It’s definitely not for everyone,” Mr. Meyer said. “When you live with your best friends, it couldn’t be better. We hardly spend time in our rooms.”

  I saw a lot of this here in Toronto while I was in undergrad. 55 Charles Street West was always a great candidate for these sorts of hacks because the units are large and because the building is filled with solariums. Inevitably, they became additional bedrooms. 

  (Sidebar: My understanding is that there was a period of time in Toronto where solariums were excluded from gross floor area calculations. So developers used to always put them in to capture more area. That’s why buildings of a certain vintage always seem to have them.)

  In any event, the above certainly makes the case for more micro units and co-living arranagements. Many people seem willing to deal with a variety of living situations in order to live where they want to live. Urban affordability is certainly a global concern.

  2016.12.09

• Opendoor.com is so risky that it may just work

  

  I have been writing about the startup Opendoor.com for over 2 years now. And I continue to believe that they are the most promising disruptor in the residential real estate space. 

  Here is the first post that I wrote back in July 2014 after they raised their first round of funding. Here is the second post that I wrote after they launched in Phoenix. And here is another post that I wrote 6 months ago where I argued, once again, that they are doing something worth paying attention to. (This last post explains how the platform works.)

  Well, about a week ago it was announced that they have raised another round of funding: a $210 million Series D. In all likelihood, the company’s valuation is now over $1 billion. Here’s the Techcrunch announcement where the message was: huge ass number; risky business model.

  In response to this, Ben Thompson wrote a terrific and widely shared blog post called, Opendoor: A Startup Worth Emulating. I love his post because he says what I have firmly believed and argued for many years: Zillow and Redfin are not disruptive real estate startups.

  This is what he says about Zillow:

  “And yet, the most successful real estate startup, Zillow (which acquired its largest competitor Trulia a couple of years ago), is little more than a glorified marketing tool: the company makes most of its revenue by getting real estate agents — the ones collecting 6% of fees, split between the buying and selling agents — to pay to advertise their houses on the site. Certainly a free tool that makes it easier to find houses in a more intuitive way is valuable — Zillow has acquired the sort of userbase that allow it to build an advertising business for a reason — but at the end of the day the company is a tax on a system that hasn’t really changed in decades.”

  And though very risky, he argues that Opendoor is far better positioned to shake up the status quo. 

  Here are two of his key points:

  “Sellers are uniquely disadvantaged under the current system, which is another way of saying they are an underserved market with unmet needs.” [Sellers are the side of the market that Opendoor is specifically targeting.]

  “Opendoor has a new business model: taking advantage of a theoretical arbitrage opportunity (earning fees on houses sold at a slight mark-up) by leveraging technology in pursuit of previously impossible scale that should, in theory, ameliorate risk.”

  And here’s what that could ultimately mean for the industry:

  “Opendoor has many more reasons why it might fail than Zillow or Redfin, but its potential upside is far greater as a result. First is the immediate opportunity: sellers who can’t wait. However, as Opendoor grows its seller base, especially geographically, its risk will start to decrease thanks to diversification and sheer size; that will allow it to lower its “market risk” charge which will lead to more sellers. More sellers means both less risk and an increasingly compelling product for buyers to access, first with a real estate agent and eventually directly. More buyers will mean lower marketing costs and faster sell-through, which will lower risk further and thus lower prices, pushing the cycle forward. It’s even possible to envision a future where Opendoor actually does uproot the anachronistic real estate agent system that is a relic of the pre-Internet era, and they will have done so with realtors not only not fighting them but, on the buying side, helping them.”

  I’m with Ben on this.

  2016.12.08

• Show some laneway love

  

  I just want to do a quick follow-up to my recent post about the momentum currently developing around laneway housing here in Toronto. 

  In the post, I mentioned that two councillors have come out in support of this housing typology. However, I neglected to mention that Evergreen CityWorks is also at the table, as well as a housing advocacy group called Lanescape. It was mentioned in the comments, but I know that not everyone checks that part of the blog.

  I say this for two reasons:

  1) I thought about starting a similar initiative to Lanescape. (I’ve had lanewaylove.com registered for many years. Brand identity shown above.) But after meeting one of the Lanescape founders this past week, I think it only makes sense for me to instead throw my support behind them. They are accomplishing a lot in this space.

  2) Lanescape has a survey up on their website and the results will be used to guide a laneway suite planning framework that will (hopefully) be implemented by the City of Toronto. So I wanted to encourage you all to complete it. Even if you don’t live in Toronto, still fill it out. It’s important for cities to learn from each other.

  Your support will go a long way in making laneway housing a reality in the city.

  2016.11.26

• New political support for laneway housing

  There’s some great news in the Toronto Star this week.

  (Thank you Mike for bringing this to my attention.) 

  Two councillors – Mary-Margaret McMahon and Ana Bailao – have come out in support of allowing laneway housing in Toronto. Some cities call them detached accessory dwelling units (DADUs). 

  If you’re new to laneway housing, check out this post and this post (both are 2+ years old). I’ve been on this horse for over a decade.

  Because going beyond their small space cool factor, laneway housing has the potential to fundamentally alter the housing supply constraint that I wrote about a few weeks ago – namely the yellowbelt. It’s a way to gently allow for new housing, while at the same time preserving the character of our “stable” neighborhoods. 

  And frankly, I can’t think of any other way to add new ground related housing at any sort of meaningful scale within the city limits – not unless we’re willing to give up the “stability” of our neighborhoods. So this is it.

  If you’re on the same page, I would encourage you to reach out to Councillor McMahon and Bailao and let them know that. There’s also a public workshop scheduled for Monday, December 5th at 7pm at the Evergreen Brick Works (550 Bayview Avenue).

  2016.11.16

• Airbnb’s 5 point plan

  New York State Governor Andrew Cuomo recently signed a bill that will levy heavy fines (up to $7,500) on Airbnb hosts who do not abide by local housing regulations.

  Hours after, Airbnb filed a federal lawsuit claiming “irreparable harm.”

  However, they also proposed a 5 point plan that they hope will make home-sharing work in New York City and then serve as a framework for new legislation.

  Here are Airbnb’s 5 points (summarized by me):

  1. One host, one home: Just like it sounds, this would limit people to renting a single home within the five boroughs.
  2. Require registration: State would require short-term rental hosts to register. Airbnb would be authorized to register people on behalf of the state.
  3. Make home-sharing work for all: Landlords would be able to set specific rules for short-term rentals in their buildings and then secure a portion of the revenue for maintenance and so on. (I would imagine that the same could be done by condo corporations.)
  4. Good neighbor rules: Platforms would be required to have dedicated 24/7 hotlines should any neighbor complaints arise as a result of home-sharing.
  5. Taxes to support affordable housing: Airbnb would collect and remit additional taxes on behalf of hosts, which could then be used for things such as affordable housing.

  It’s interesting to think about Airbnb’s evolution. It started out as air mattress rentals on the floor and nobody thought it would ever work as a business. Now it’s a huge business and governments everywhere are trying to figure out an appropriate response. Hopefully a suitable middle ground will be found.

  How do you feel about Airbnb’s proposed 5 point plan? With this framework, would you be comfortable with Airbnb in your building? I know that many of you are also hosts (some of you do it for a living), so I would be curious to hear your thoughts.

  2016.10.24

• Low-rise vs. high-rise

  Yesterday I sent out this tweet, which included this graph:

  

  The chart is from Altus Group and it is a monthly price index of new low-rise vs. high-rise housing in the Greater Toronto Area (GTA). I have posted similar charts in the past, but every time this chart gets updated the spread widens and the market looks even crazier.

  Some people responded on Twitter by saying that this is clearly an indication of a bubble. I don’t know if that is the case. 

  But, as I have said many times before, I do believe that it tells a vivid story around supply. Low-rise housing is severely supply constrained in the GTA and high-rise housing is less so. That has helped to stabilize pricing in the latter case.

  Now, you could look at this chart and say that the pace of low-rise price increases is simply unsustainable. The market must correct. 

  But you could also look at it and say that the market is going through a fundamental shift whereby more and more families will start living up, as opposed to out – which should then translate into high-rise pricing trending upwards as unit sizes increase. This is where I think we are headed. 

  What do you reckon is happening?

  2016.10.21

• 6 things about cities from Richard Florida

  Last week Richard Florida headlined an “Urban Lab” panel at the NYU Schack Institute of Real Estate. It was moderated by Sam Chandan, who is dean of the Shack Institute. 

  Here are 6 takeaways from the discussion, with a few of my own thoughts attached:

  1. Suburban brain drain. This is happening. Florida states that (real estate) development is the key to rebuilding the suburbs. It will challenging to reorient the suburbs away from the car (though suburbs vary greatly), but I do agree that many suburban areas need a refresh to keep them relevant against this brain drain.

  2. Decline in home ownership. Florida believes we will see owning vs. renting drop to about 50-50. This would be a pretty big change given that US homeownership is currently hovering in the low 60s and this is already at historic lows. However, the trend is towards urban and that often means more renting.

  3. New city characteristics. Access to urban amenities, cultural capital, and transportation is critical and should drive new development. Transit and rail infrastructure can “open up” new areas and combat issue #4, below.

  4. Housing affordability. Florida reiterates “the great inversion.” Poverty moving to the suburbs; cities now housing the rich. He also isn’t sure that capitalism alone will solve this problem. Gives example of Manhattan where market is focused on high-end luxury residential.

  5. Florida argues that planning and real estate knowledge need to come together to overcome some of the information-asymmetries inherent in the development industry. I’ve written about similar ideas before. I try and apply this sort of multi-disciplinary thinking to urban issues.

  6. Micro-living is not a silver bullet for “chronic poverty.” I think it serves a segment of the housing market.

  2016.10.17