Tag: housing

• Living minimally

  

  “The wisdom of life consists in the elimination of non-essentials.”
  – Lin Yutang
  

  Yesterday I posted the above photo on social media with the caption: 

  “This year I decided to go ALL OUT for Halloween.” 

  A friend then responded and said: 

  “A minimalist does Halloween. Love it.”

  I’ve been called a minimalist many times before. And it is certainly something that I think about. Oftentimes I feel like life is a constant battle against physical and mental clutter. But that the more you can rid yourself of that clutter, the happier and freer you will feel.

  It’s why I scan most of my paperwork into Evernote and then throw out the hard copies. It’s why I tend to wear a lot of white dress shirts and black t-shirts – it keeps life simple and reduces decision making. And it’s one of the reasons I’m so attracted to laneway houses and small spaces. I don’t think most of us need as much home as we think we do.

  If this is something that also interests you, I recommend checking out a blog called The Minimalists. I just recently subscribed to them.

  2015.11.01

• Make Way for Laneway

  I was speaking with a friend this morning and he told me that he had a Pavlovian association between me and laneways. That made me happy. 

  If you’re a regular reader of this blog, you’ve heard me go on and on about the great potential of laneways and laneway housing (accessory dwelling units) in Toronto, as well as in other cities around the world.

  So I won’t do that today. Instead, I’m going to link to a report that was just released by the Pembina Institute called Make Way for Laneway: Providing more housing options for the Greater Toronto Area.

  The report is obviously about Toronto, but there’s no reason that the lessons and ideas won’t also apply to your city. So I would encourage you to give it a read.

  For those of you who have emailed me about my own laneway house, the project is still on hold. And it will likely remain that way until the city becomes a bit more accepting of this housing typology. Hopefully that will happen soon.

  2015.10.23

• What tax policy could be doing to home sizes in Ontario

  

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

  In yesterday’s post I made a remark that we have antiquated tax policies here in Ontario that encourage the building of smaller new construction condominiums. There seemed to be a lot of interest in that comment, and so I’d like to talk about that today.

  Some people thought I was referring to development charges, but I was actually thinking of the GST/HST New Housing Rebate in Ontario. 

  The way it typically works in Ontario is that when buy a new construction home, the price you pay is inclusive of HST (harmonized sales tax) and net of any applicable rebates, such as the rebate program mentioned above. 

  This means that the price you see on your agreement is usually the price you pay. I say usually only because there are ways that you could disqualify yourself from the New Housing Rebate program. But that’s a different post.

  So what does this mean in practice?

  Let’s say you went out and bought a new construction condo for $368,200 (there is a reason I’m picking what seems like an arbitrary number). If there was no such thing as the New Housing Rebate program, then the sales tax owing on this home would be the full 13%. And that would mean that the price paid before any taxes is actually $325,841 (x 13% = $368,200). This is an important number because it represents revenue to the developer.

  But since there is a New Housing Rebate program, the effective tax rate actually works out to be 5.20% for this particular sale price, which means that the price paid before any taxes is now $350,000 (a nice whole number). And so because of rebates and because they are now paying less HST, the developer’s revenue number has increased. It has gone from $325,841 to $350,000.

  The way this logistically works is that purchasers usually assign the New Housing Rebate benefits to the developer who then processes all the paperwork. This is what I mean when I say that the “sticker price” is inclusive of HST and net of any rebates – it already factors in the possible deductions.

  So far things are looking good. And I want to be clear that I don’t have concerns with the New Housing Rebate program in its entirety. In fact, it’s a hugely important part of the new home industry. Without it, many projects would simply not be feasible to build.

  However, as the price of the new home increases (which typically happens as the home gets bigger), the rebates start to fall off. The federal portion of the rebate maxes out at a base purchase price of $350,000 (which is why I chose that number) and the Ontario portion maxes out at a base purchase price of $400,000.

  What all this means is that as the unit sizes get bigger and more expensive, the effective tax rate is no longer at 5.20%, as was the case in the example I gave above. It increases. And if you hold prices constant for the purchaser, it means that the developer’s revenues now start to drop.

  To illustrate why this matters, consider the following chart:

  

  In the first scenario, the developer builds and sells 2 units for a price of $368,2000. This translates into revenue of $700,000. However, if the developer instead decides to combine those 2 units and sell the larger single unit for $733,100 (roughly double the price) then the effective rate of HST goes up and revenue drops by $30,000.

  The second scenario is similar to the first one except that instead of 2 units, it’s 3 units which then get combined into one. Here revenue drops even further – by $50,000.

  Now, you could argue that there are some cost savings associated with building fewer suites, but I don’t think it would offset the differentials shown above, especially if you multiply those revenue numbers across an entire project. So what this all means is that it can be more profitable for developers to build smaller units priced below the thresholds mentioned above, as opposed to a smaller number of larger units. 

  Again, I’m not saying that HST rebates are bad. They’re critical to the industry. I love them. But I do believe we should be thinking about the possible implications that the current set up could be having on what we’re building and in particular on unit sizes.

  If you’d like to learn more about how the rebates work, check out this PDF from the Canada Revenue Agency. I tried to keep things simple in this post.

  2015.10.18

• The future of housing in Toronto

  On Monday evening I gave a 45 minute talk at the Rotman School to a delegation of about 70 people from Portland. The talk was about Toronto housing, but more specifically about the history and possible future of high-rise housing in this city. 

  Thanks to everyone who commented on my lead-up post over the weekend. It was really helpful to hear what other people in this city (as well as people not from this city) are thinking. Many of the comments also echoed my own beliefs.

  The narrative I told in my presentation was about two significant, yet very different, periods of time when Toronto built more high-rise than low-rise housing. The first was our post-war suburban slab tower boom. And the second, which we are currently living through, is really the outcome of the Places to Grow Act (2005).

  But as I mentioned over the weekend, the really interesting question is: what’s next?

  In my view, what we are seeing today is fundamentally different than what we saw in the post-war years. Despite the fact that we were building towers then and we are also building towers now (albeit much taller ones), the ideology behind them has changed. It has gone from suburban to urban.

  Toronto’s post-war towers were built upon a particular dream. The dream of getting in your car, escaping the decay of the city, whisking up the Don Valley Parkway (nobody whisks on the DVP), and being rejuvenated by all the light, air, and green space afforded to you in your Ville Radieuse.

  But it turns out that people of means didn’t want that back then. They wanted a suburban house. That was the dream.

  Today, however, cities are back in vogue. 

  Companies are moving into city centers to compete for the best talent. Retailers are moving downtown to capture disposable income. And the most pressing problems are no longer about decay and urban blight, they are about housing affordability, gentrification, and too many rich people pushing out the poor.

  The narrative has changed.

  So in the context of Toronto, I feel as if we are at an inflection point when it comes to housing. The multi-family dream may not have stuck decades ago, but I believe it will stick for many, though not all, today. And this will happen for a variety of reasons ranging from sheer preference to sheer necessity. The alternative is no longer an affordable bungalow on a 50′ x 150′ lot that happens to be 10 minutes from the subway.

  But as a result of this shift, I also think a number of other things will happen. 

  Eventually, Toronto will look to loosen some of the land use restrictions on its single family neighborhoods. This could mean “gentle” low-rise intensification (new planning buzzword, take note), as well as the acceptance of laneway or accessory dwelling housing. This won’t be popular, as one person said in the comments over the weekend, but eventually the pressures will become too great.

  At the same time, I think we’ll be brought full circle with respect to our suburban towers. The suburban ideals in place at the time means that many of these tower communities have relatively low densities. That represents a tremendous opportunity for this city and it’s only a matter of time before we truly figure out how to unlock them.

  But for all the change and disruption that’s happening in Toronto, I think it’s also worth saying that those of us who live here should consider ourselves a lucky bunch.

  One of the things I actually asked the delegation from Portland was, what struck you the most when you arrived in Toronto? The response I got was: its vibrancy. 

  Everywhere you walk downtown, they said, people are on the streets – walking, cycling, and hanging out. In fact, some said it’s almost hard to remember which street is which because every street seems to be so full of activity. Most North American cities do not have this kind of sustained vibrancy in the core, I was told. And so that makes us a pretty special place. We must be doing something right.

  It’s easy to take those sorts of things for granted when you live somewhere. So today I’m trying to do the exact opposite of that. I’m trying to stop and appreciate the place I call home.

  2015.09.30

• Is Hongcouver better off than Vancouver?

  

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  It’s raining this morning in Toronto. The sun really hasn’t come up and out yet. And I’m spending the morning drinking coffee and reading a City Journal article from this past summer called “Hongcouver.”

  The article talks about how the Chinese – first from Hong Kong and then from mainland China (PRC) – have dramatically reshaped the economic and cultural landscape of Vancouver.

  I, unfortunately (it’s a great city), don’t spend a lot of time in Vancouver and so I don’t have an accurate sense of the local sentiment towards all of this change. But there’s no question the city has changed. 

  Here’s a snippet from the above City Journal article:

  As for the notion that Chinese money tended to be ill-gotten, Yu pointed out that the property boom was propelled by the structural disparity between prosperous Hong Kong, a dynamic economy, and the comparative backwater of Vancouver, still “living on the fumes of empire.” For the price of a Hong Kong flat, a Chinese immigrant—even, say, an accountant—could buy a splendid home on Vancouver’s West Side. “The Hong Kong Chinese who came could buy their way into any neighborhood. [They] knew that money was a tool,” Yu told me. “They weren’t going to accept a second-class citizenship in Vancouver. They could say, ‘I don’t care about your British Imperial manners, I am going to buy your house.’ ” The irony was that the Hong Kong arrivals—“more sophisticated than the people they were displacing,” with “better schooling, better English accents,” Yu said—were themselves the products of a system of law and finance instituted by the British with the establishment of their Hong Kong colony in the 1840s, after Britain thrashed China in the First Opium War.

  A lot of this was fuelled by the now defunct Immigrant Investor Program. The intent of the program was to allow “experienced business people” into the country in order to contribute to economic growth. If you had business experience, a net worth of at least C$1.6 million (that was gained legally, of course), and were able to invest C$800,000, then you could get permanent residency.

  Between the mid-1980s and the end of the 1990s, approximately 30,000 Chinese came to Vancouver via this investor-class visa. And between 1987 and 1997, it is estimated that this group of Chinese possessed about $35 to 40 billion in disposable income. No wonder they bought real estate.

  But the interesting question is whether or not Vancouver is better off now than it was in the 1970s before all of this migration really took hold. 

  There many who would argue that it is not. Vancouver now has the most expensive real estate in Canada and prices have completely detached themselves from local income levels – as they have in many international cities.

  But there’s also a strong argument to be made that this influx of money has made the Vancouver economy more dynamic. Unemployment in the city was cut almost in half between the early 1980s and 1991 during the first wave of migration. It went from 13.6% to 7.7%.

  In a way, it’s not all that different than what’s currently happening in San Francisco with tech and housing. I’m not saying there aren’t problems to be solved. But I think many of us can agree that the answer is not to eradicate the tech sector.

  That’s throwing the baby out with the bathwater.

  2015.09.28

• Toronto housing — where we came from and where we’re probably headed

  This morning I’m working on a presentation that I’m going to be giving one evening next week to a delegation coming in from the US. The title of the presentation is the title of this blog post: Toronto housing – where we came from and where we’re probably headed.

  My plan is to start in and around the 50s and 60s and talk about Toronto’s first tower boom following the war. For this time period, I’m relying a lot on the work of Graeme Stewart of ERA Architects, who is one of, if not the, expert on post war towers in this city.

  

  I’m then going to move onto our current high-rise condo boom and compare the two.

  Because the interesting thing about the first boom is that, after it finished, we basically returned to the typical North American housing model: building single-family homes. And it wasn’t until this recent boom of the early 2000s that we once again resumed building more high-rise than low-rise housing. That is still the case today.

  But the question I want to address is really, what’s next? Where are we headed? Is history going to repeat itself or is – dare I say – this time different?

  I’ll eventually get to those questions here on Architect This City, but first I want to hear from you. So here’s what I’m proposing: leave your thoughts in the comment section below and I will feature the best ones in my presentation next week as the voices of Toronto. I’m sure many of you know that I’m a big fan of crowdsourced information.

  So here goes. Where is Toronto housing headed and how will we be living in the next 10+ years? Will we be raising families up in towers or not? Please comment by Sunday, September 27, 2015 at 6pm (ET) to make sure I have time to feature you in the presentation. 

  Thanks for participating 🙂

  2015.09.26

• The housing typologies of American cities

  Yesterday the Washington Post published a great chart showing the housing types of the 40 largest cities, by population, in the US. The list is ordered from lowest to highest according to the percentage of single-family houses in the city (green bar).

  Here’s the chart:

  

  Not surprisingly, many of the cities at the top of this list (meaning they have the lowest percentage of single-family houses) are in the older east coast cities. 

  It’s also interesting to see just how much the rowhouse dominates the urban landscape in Philadelphia and Baltimore. In Philadelphia, almost 60% of the housing stock is an attached rowhouse.

  Housing is the backdrop for such a big portion of our lives. And when you live in a particular kind of home, it impacts your life whether or not you realize it. The dense rowhouses of Philadelphia and the single-family houses of Oklahoma City are the result of two very different kinds of urban landscapes.

  In Toronto, that backdrop is in the midst of a dramatic change. More and more of us are now living in high-rise condos. That hasn’t always been the case, of course. It’s a recent shift. But it looks like it’ll be a big part of our future.

  2015.09.22

• Mega-cities vs. networked cities

  

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

  Ed Glaeser, Giacomo Ponzetto, and Yimei Zou recently published a new academic paper called, Urban Networks: Spreading the Flow of Goods, People and Ideas. 

  The paper looks at whether it’s more advantageous to build huge and consolidated mega-cities or build connected networks of smaller urban centers (perhaps connected by high speed rail). As countries like China rapidly urbanize, this is something that many people are thinking about.

  In China, there is a lively urban planning debate
  about whether to facilitate the increased expansion of the vast agglomerations of Beijing and
  Shanghai or whether to focus on creating networks of cities that are smaller, albeit still much
  larger than almost all of the cities of Western Europe. The current government policy favors
  networks, in the hope that connected smaller cities may be free of the extreme downsides of
  mass agglomeration, such as extreme congestion, pollution and high housing costs.

  Like most things, there are real trade-offs. 

  In the paper, they assume that larger cities lead to more urban amenities, which in turn serves as an important magnet for skilled workers. However, for unskilled workers who may not care/benefit from the same urban amenities, it is possible for them to dislike the bigger cities. In this case, the benefits do not outweigh the negatives of urban expansion and an urban divide is created (rich/poor).

  One of the potential negatives is housing.

  The attraction of denser, not larger, mega-cities is determined also by the elasticity of
  housing supply. When it is easy to add extra homes on a narrow plot of land, as in Texas,
  then density becomes more attractive. European urban networks may well be the right
  answer because history and regulation makes it so hard to build in Europe’s older cities.
  Even though China has usually been quite friendly towards skyscrapers, the sheer scale of
  the Chinese population may still make the case for urban networks.

  If you’re interested in this topic, there’s a section (#2) in the paper on the history of urban networks that you might like.

  2015.09.21

• Where will we live?

  

  This evening I participated in a roundtable discussion at WORKshop here in Toronto. It was part of an exhibition that they currently have on called, Toronto 2020: Where Will We Live? They are located in the concourse level of 80 Bloor Street West, so go check them out.

  The discussion this evening was all about the dramatic change in Toronto’s urban form over the last decade. In other words, the condo boom. We covered everything from the life cycle of buildings and urban design to demographics and policy. It was a lot of fun and I am certain the group could have continued talking all night.

  But one thing that I was reminded of this evening is how important it is for great city building to be cross-disciplinary.

  Take, for example, architects and (real estate) developers. 

  The stereotypical developer is greedy and only concerned with money. They don’t care about the impact that their buildings have on the built environment. On the other hand, the stereotypical architect is only concerned with design and not with the economic feasibility of projects. (I’m exaggerating here for effect.)

  The point is that neither of these participants in isolation could build a great city. A beautiful design doesn’t have much value if it can’t be financed and built. And a highly financeable project could end up contributing nothing to the city. In some cases it could actually detract from the built environment.

  So if we really want to build truly great cities, I believe it needs to be a collaborative effort. We need to bridge the divides in thinking and leverage each other’s strengths. 

  I have felt very strongly about this since I first started studying architecture as an undergraduate student, which is how I ended up taking business and real estate classes. I felt and continue to feel that the greatest opportunities exist at the intersection of different ways of thinking.

  2015.09.10

• From stuff to services

  This morning Fred Wilson linked to a Bloomberg article on his blog called, Maybe This Global Slowdown Is Different. There are a bunch of great charts throughout the piece and I’d like to share 3 of them here.

  The first chart shows how per capita energy consumption has dropped remarkably in the United States since the 1990s, but how, not surprisingly, China’s rate is increasing.

  

  The second chart shows car sales in the US. There was a big drop off during The Great Recession, and though sales have rebounded, they still haven’t reached their late 1990s peak. But that’s not to say that they won’t.

  

  And the third chart shows the tremendous shift in the US over the last 65 years from the consumption of stuff to services.

  

  This last one is fascinating. And it ties into the argument that the way value is created in our economy has shifted dramatically.

  But I wonder if this change is really as sharp as it seems. 

  If you look at what makes up “services”, you’ll see that housing (and utilities) and healthcare make up over 50% of what is considered to be personal spending on services. And if you look at housing and utilities spending since the 1960s in the US, it has increased dramatically. 

  

  So how much of this shift from stuff-to-services is actually being driven by housing?

  2015.09.01