Tag: housing

• Survey: Homes for families

  I was looking through real estate listings this morning (which I do quite often out of sheer interest), and I started noticing a number of 3 bedroom condos (here in Toronto) that were priced under $1 million.

  Now, this is a lot of money now matter how you slice it. But given that the average price of a detached home in the city is now well over $1 million, I can’t help but wonder if condos will become more accepted as the family home.

  I’ve written about this topic a lot, because it’s something I’m interested in and I like living in a condo. But I’m seeing far more of my network looking for a low-rise house upon marriage/kids than for a bigger apartment/condo.

  So today I thought I would run a very quick survey. There are only 3-4 questions depending on how you answer and it basically revolves around housing type and whether or not you have or plan to have a family. I also ask what city you live in because I think this will have an impact on preferences.

  If you have 30 seconds, I would love to get your input and I’m sure the ATC community would be interested as well. The responses are anonymous, but I’ve made them public. Click here if you can’t see the survey below.

  [googleapps domain=”docs” dir=”a/brandondonnelly.com/forms/d/1wyMguhSlNv6pe6DS3duyJUqpzjImHI_KiYer1CKTVxo/viewform” query=”embedded=true” width=”640″ height=”600″ /]

  2015.05.31

• “Regulation for thee but not for me”

  Urbanist Aaron Renn recently published an interesting article in City Journal called “Libertarians of Convenience”. It talks about how today’s urban progressives are selectively favoring deregulation for the things that only matter to them – everything from urban housing to food trucks.

  Here’s a snippet:

  But it’s hard to avoid thinking, too, that some of the inconsistency reflects elite biases. The things that liberal-minded city residents like and want to do—eat from hip food trucks, smoke dope, and other “bourgeois bohemian” pursuits—should be left as free as possible, consequences be damned (raw-milk advocates downplay the nearly 1,000 cases of illnesses caused by it from 2007 through 2012). Those that they consider déclassé—Big Gulps, Marlboro Lights, McDonalds—should be restricted or even shut down. It’s regulation for thee but not for me.

  I like his angle, because we’re probably all – at least a little – guilty of subjectively wanting more of the things we like and less of the things we don’t like.

  What do you think of his argument?

  2015.05.14

• Red stripes, iceberg homes, and laneway houses

  This morning I was reading a CityLab article talking about a homeowner in London’s wealthy Kensington neighborhood who painted her house in red stripes after the city and her neighbors derailed her renovation plans. I’m thinking it is supposed to be symbolic of government “red tape.”

  She had hoped to add a two-floor “mega-basement” to her home, which is curiously enough a thing in London due to how restrictive traditional home expansions can be. Locally they are called “iceberg homes.”

  What’s interesting about this phenomenon is that it shows you how far people will go to find and/or create the space they want in the neighborhoods they want to live in. Kensington is an incredibly wealthy area and so one has to assume that she is not without other housing options.

  As another example, here’s how the article describes her house:

  The candy-striped home in question, for example, is actually a mews house, a kind of outbuilding running along an alley behind a great house, originally intended as a place to tidy horses, carriages and maids away from the main residence.

  So not only did she want to create an “iceberg home”, but she wanted to do so in what was previously a back alley. In Toronto, this home would be called a laneway house.

  What this tells me is that as real estate values rise, people will naturally start to seek out overlooked spaces to repurpose. They will look for some way to carve out a home. And it’s for that reason that I think laneway housing is an inevitable outcome here in Toronto.

  2015.05.11

• Name your laneway

  

  Urban Explorer by Andrew B. on 500px

  Laneway housing is becoming an incredibly popular topic here in Toronto. Lots of people seem to be interested in building, or least living in a compact ground-related laneway dwelling. 

  A big part of this, I think, has to do with affordability (or the perception of affordability). A lot of people want to live in a central urban neighborhood, but it has simply gotten both expensive and difficult to secure low-rise housing. Here’s an example of a young couple in Toronto who went door-to-door in their desperation to find a house.

  I believe that laneway housing has the potential to be a more affordable low-rise housing solution in this city, as well as in many other cities around the world who have a similar urban condition. But today, at least here, it’s not that way.

  Since the City of Toronto does not officially support laneway housing, it would be an uphill to get one approved and you need to be willing to put a significant amount of money at-risk in order to try. It’s unfortunate, but that’s the reality today.

  I’m certain that will change. But it will take a bit more pioneering. The Laneway Project, which I advise, is working to change the way Toronto thinks about its laneways and I know that there are many other small entrepreneurs working on doing the same.

  One of the first things that will need to happen is that we’re going to need to name our laneways. Some of them are already named, but many of them are not. And while this may not seem like a big deal, it is. For laneway housing to become a reality, they will need to have addresses and we will need to think of our laneways as legitimate streets.

  Recently The Laneway Project published a how-to guide called: How to Name Your Laneway. So if you’re interested in laneways and laneway housing here in Toronto, I would encourage you to give it a read and then try and get your local laneway named.

  2015.05.10

• Tesla introduces a battery for your home

  

  By accident, this week on Architect This City seems to be turning into Elon Musk week.

  Yesterday, Musk announced something called the Powerwall home battery. Measuring about 3′ x 4′, the shield looking battery pack will charge using the electricity generated from solar panels (or from the grid when rates are at their lowest) and then power your home.

  It’s designed for consumers and will cost between US$3,000 – $3,500 depending on capacity. The individual Powerwalls can also be daisy chained to increase capacity. It will be available starting this summer.

  A wall battery may not seem all that interesting to some, but I think this is actually a big deal for a few reasons.

  Renewable energy is often both intermittent and produced when you don’t need it. Here’s a great chart from Tesla that shows what I mean:

  

  During peak solar hours, most people aren’t home and most people aren’t consuming at peak levels. That’s why it’s important to be able to store the energy that you collect, whether it be from solar, wind or other renewal energy source. And from what I hear from my friends in the industry, storage has been a bit of an Achilles heel for adoption.

  It will also help to further decentralize energy production. What is produced locally (from say solar panels) will be stored locally for when it’s needed locally. This is in contrast to centralized production or producing energy locally and then feeding any excess capacity into the grid for use somewhere else. That requires transmission and will be by definition less efficient.

  Finally, the other interesting thing about Powerwall is that it closes the loop on two of Musk’s businesses: SolarCity and Tesla. SolarCity is about the production of renewable energy and Tesla is about the consumption renewable energy. But as the chart above shows, storage is often needed to link those two activities in an efficient way.

  All of this makes me excited about Powerwall.

  If any of you are an expert in this industry (which I am not) or you just have additional thoughts, I would love to hear from you in the comment section below.

  Images: Tesla

  2015.05.01

• Where are Millennials going to move when they start having children?

  

  Kembangan by Jason Waltman on 500px

  Earlier this week I attended RealNet’s Q1 2015 market update webinar for the Greater Toronto Area. If you don’t already subscribe to RealNet, you should consider it. They’re one of the best sources for Canadian real estate market information.

  During their webinars, they occasionally run interactive surveys where they ask the audience a question and participants respond using their web browser. On this particular webinar, they asked the following question, which I thought was interesting:

  What is the likely housing moving by Millennials in raising their families?

  A) Move Up – Embrace urban high-rise housing forms

  B) Move Out – Accept extended commutes (including the Greater Golden Horseshoe and Hamilton Area) to find affordable ground oriented housing
  

  C) Move In – Cohabitate parental homes

  It’s an interesting question because it’s one that I’ve asked myself a number of times. Sure, Millennials are rushing back to cities and living in high density and walkable communities, today, but what are they going to do and where are they going to move when they start having children?

  As a Millennial myself, I know that I’ve always told myself that I want to stay urban for as long as I can (i.e. Move Up). But I’m only one data point. And given the seemingly endless demand for low-rise housing in Toronto, I always felt like I was in the minority. I figured that the majority of people, at least here in this city, still want a ground-related home when it comes time to raise a family.

  Putting aside economics, I still think that may be the case for a lot of home buyers. But the majority of people on this week’s RealNet webinar (which would be almost exclusively folks from the real estate industry) either think that preference is going to change (or already has) or that consumers won’t have a choice due to affordability.

  50% of the people on the call answered A – move up and embrace urban high-rise housing forms. The balance was about 44% for B and 6% for C.

  That’s not the outcome I expected to see. So today I’d like to re-ask this question to the Architect This City Community. Where do you think Millennials are going to move once they start having children? Please let us know in the comment section below.

  2015.04.24

• Art and apartments

  

  Image Source: Vancouver by Marc M on 500px

  According to a recent Bloomberg article, this is where the rich are putting their money today:

  “The two greatest stores of wealth internationally today is contemporary art….. and I don’t mean that as a joke, I mean that as a serious asset class,” said Fink. “And two, the other store of wealth today is apartments in Manhattan, apartments in Vancouver, in London.”

  In case you wondering, Laurence Fink is the founder and CEO of BlackRock Inc., which today is the largest asset manager in the world. They have over $4.77 trillion in assets under management according to their website. That’s a mind boggling number.

  And if you read the Bloomberg article cited above, you’ll see that this interest in both art and apartments represents a shift away from gold as the de facto safe haven.

  “Historically gold was a great instrument for storing of wealth,” the chairman of BlackRock Inc. said at a conference in Singapore on Tuesday. “Gold has lost its luster and there’s other mechanisms in which you can store wealth that are inflation-adjusted.”

  What’s interesting and probably most relevant to the Architect This City community though is this investment focus on apartments.

  When people talk about a possible housing bubble in Canada they often cite house prices to median household income as a key ratio. The question then becomes: How can house prices be such a high multiple relative to local incomes?

  That’s relevant, but it’s not the entire story for cities like New York, London, and Vancouver. That ratio alone assumes that real estate isn’t a global investment vehicle. And for some people people it is exactly that.

  2015.04.21

• A comparison between low-rise and high-rise housing costs

  Earlier this week the Globe and Mail reported that the average price of a house in Toronto has risen to $613,933 and that the average price of a detached house has risen to $1,042,405. Those are a big numbers.

  Low interest rates are a big part of this story. But there’s also a supply story at play here. The low-rise housing market in this city is heavily supply constrained and so we have an environment where people with more money simply outbid those with less money.

  The high-rise side of the market, on the other hand, is creating lots of new supply. And in my opinion that’s why its price growth has been more moderate in recent years and why the pricing spread between low-rise and high-rise housing continues to widen.

  Assuming these trends continue, one of the things I’ve thought about and written about in the past is whether we’ll eventually seeing a point where high-rise housing actually becomes a more affordable option for families. Because right now, if you’re in the market for a 3 bedroom home, a low-rise house is likely your most affordable option.

  Here’s a quick comparison that I did up this morning between a detached house and a high-rise condo:

  

  For the detached house, I assumed 1,800 square feet at a price of $1,042,405. That’s the average price mentioned above. 

  For the condo, I assumed a 1,500 square foot 3 bedroom home. I priced it at $650 per square foot (which would be above average for the city) and then added $40,000 for a parking spot. Here you have a slightly smaller condo, but it’s also priced slightly less.

  I then compared operating/maintenance costs. For the condo, I assumed a maintenance fee of $0.59 per square foot (which I think is reasonable) and then added $100 per month for electricity. Typically electricity is billed outside of maintenance fees.

  For the detached house, I tried to create a similar living situation. I assumed that the owner wouldn’t be cutting their own grass or shovelling their own snow. I assumed that money would be put away each month as a capital reserve for future house expenses (similar to the reserve fund in a condo). And I assumed a gym membership since most condos have a gym. I ignored property taxes and insurance.

  The detached house still works out to be a less expensive to operate in this scenario, but not by much. Overall, the two appear quite comparable. Which is why I wouldn’t be surprised if we see a tipping point in the future where all of a sudden families start finally adopting the mythical 3 bedroom condo.

  I have published my spreadsheet to the web in case you disagree with my assumptions and want to create your own.

  2015.04.10

• The high cost of poor land use

  

  London street of early 20th century Edwardian terraced houses by Bombaert Patrick on 500px

  Over the weekend The Economist published an interesting article called, Space and the city: Poor land use in the world’s greatest cities carries a huge cost. The argument is that land isn’t scarce. It’s the land use policies we have created that are artificially limiting supply and driving up real estate values.

  In fact, land is not really scarce: the entire population of America could fit into Texas with more than an acre for each household to enjoy. What drives prices skyward is a collision between rampant demand and limited supply in the great metropolises like London, Mumbai and New York. In the past ten years real prices in Hong Kong have risen by 150%. Residential property in Mayfair, in central London, can go for as much as £55,000 ($82,000) per square metre. A square mile of Manhattan residential property costs $16.5 billion.

  And part of the reason this has become so prevalent is because of the shifts we’ve seen in our economy and the great return back to cities.

  In the 20th century, tumbling transport costs weakened the gravitational pull of the city; in the 21st, the digital revolution has restored it. Knowledge-intensive industries such as technology and finance thrive on the clustering of workers who share ideas and expertise. The economies and populations of metropolises like London, New York and San Francisco have rebounded as a result.

  So how do we get better at meeting real estate demand in our cities? The Economist has two suggestions.

  One:

  First, they should ensure that city-planning decisions are made from the top down. When decisions are taken at local level, land-use rules tend to be stricter. Individual districts receive fewer of the benefits of a larger metropolitan population (jobs and taxes) than their costs (blocked views and congested streets). Moving housing-supply decisions to city level should mean that due weight is put on the benefits of growth. Any restrictions on building won by one district should be offset by increases elsewhere, so the city as a whole keeps to its development budget.

  Two:

  Second, governments should impose higher taxes on the value of land. In most rich countries, land-value taxes account for a small share of total revenues. Land taxes are efficient. They are difficult to dodge; you cannot stuff land into a bank-vault in Luxembourg. Whereas a high tax on property can discourage investment, a high tax on land creates an incentive to develop unused sites. Land-value taxes can also help cater for newcomers. New infrastructure raises the value of nearby land, automatically feeding through into revenues—which helps to pay for the improvements.

  These recommendations will probably be unsettling for a number of people. 

  I would imagine that many communities would prefer to have planning and growth decisions happen bottom up, as opposed to top down. But I think there’s some truth to this recommendation and I don’t think it has to mean completely excluding bottom up feedback. Communities and individuals are naturally going to look out for their own self-interests. And so I think many would agree that there’s value in having a holistic urban strategy in place.

  Recommendation number two pertaining to land value taxes is a loaded one. So I’m going to save my specific comments for a dedicated post on LVTs. 

  But I will say that I don’t think trying to squeeze landowners into development via taxes is the most efficient and immediate way to address supply shortages. In advance of this, we should be examining the current barriers to development. Because we’re talking about hyper competitive global cities with perpetual supply deficits. And I don’t believe the problem is incentive-based. The problem is finding sites. The problem is finding ways to build.

  What do you all think? This is an interesting topic of discussion.

  2015.04.07

• From seigneurial land tenure to condominium plans

  One of the things I noticed this past weekend when I was on my Porter Escape in Quebec City was that there’s still evidence of the seigneurial land use system. I saw it on île d’Orléans.

  Established in 1627 in New France, the seigneurial system was a feudal way of distributing land and creating subsistence farming for those who occupied it. It was ultimately abolished in 1854, but you can still see vestiges of it.

  With the seigneurial system, a typical farming lot was a long and narrow strip of land emanating from the water, which in this particular case was the St. Lawrence River. Here’s a map from 1641 showing what that looks like:

  

  The reasoning behind this spatial arrangement was rather simple. By having long narrow lots, it meant that you could maximize the number of farmers who had direct access to water. This was needed for navigation, but also for many other obvious reasons. This was an efficient layout.

  At the same time, the long strips meant that each farmer had access to a broad cross section of different kinds of land. They had fertile land for growing, land for their home, and frequently land with trees so that they had material to build, fuel to burn, and so on. It also meant that, despite the overall lot sizes, people actually lived fairly close to each other. It created communities.

  Of course, there’s a lot more to the seigneurial system than just its physical form and there are reasons it was eventually abolished. But today I just want to focus on spatial layout. Because I think there are parallels to how we continue to plan our communities.

  If you live in a city you’ve probably come across a narrow rowhouse, a narrow townhouse, and/or a long and narrow condominium – which many people like to pejoratively refer to as a “bowling alley” plan. In these cases, the width of the home could be somewhere between 10 and 13 feet.

  If you stop and think about this, it’s exactly the same spatial principles as the seigneurial land use system. But instead of maximizing the number of people with access to the St. Lawrence River, it’s about maximizing the number of people who front onto the street and who have access to natural light.

  In tight urban conditions, it’s not uncommon to have no “side yard windows.” In my case, I live in a condominium with 20′ feet of windows on one side only. The other 3 sides of my box have none. And that’s a fairly common urban condition.

  I find this interesting because as much as the world is rapidly changing, some things don’t actually change all that much.

  Image: Wikipedia

  2015.04.03