Tag: london

• Toward the childless city

  There is a common narrative that, when it comes time to start a family and have kids, you should probably consider moving to the suburbs. Sure, you’ll have a painful commute, but you’ll get more space for your money, and maybe you’ll end up with better kids.

  I don’t know, obviously not everyone agrees with this. I certainly don’t.

  But it is something that commonly happens and, in many cities, it is now happening more often. Here is a map from the Centre for London showing the change in the proportion of households with at least one dependent child from 2001 to 2021:

  

  A darker borough means that it lost households with at least one child. And a lighter borough means that it gained more kids. Why this is concerning is that it means the trendline is toward more, and not less, childless cities. Here’s an excerpt from a recent FT article:

  A future with dwindling numbers of children is one many cities, including San Francisco, Seattle and Washington DC, are grappling with. In Hong Kong, for every adult over 65 there are, to put it crudely, 0.7 children, and in Tokyo it is even fewer (0.5).

  Of course, this is not a new phenomenon. And we know the main drivers:

  Randal Cremer is one of several planned primary school closures and mergers in inner London triggered by low birth rates, families moving away because of expensive childcare, Brexit, and parents re-evaluating their lives during the pandemic. The biggest factor, says Riley, is that “housing is just becoming unaffordable”. Philip Glanville, mayor of Hackney, calls it “the acute affordability crisis”.

  So how do we start to solve this? Here are a few ideas that we recently talked about on the blog, but it is by no means an exhaustive list. In my opinion, this is a problematic trend that deserves a lot more attention. Because cities are at their best when they work for everyone — from the young to the old.

  2023.07.14

• Dubai is now the top “super-prime” residential market

  People continue to buy expensive homes:

  Global super-prime ($10m+) residential sales bounced back in Q1 2023, with 417 sales across the 12 markets tracked in Knight Frank’s new Global Super-Prime Intelligence report. That’s up 11% on the 376 recorded in Q4 2022 and the highest volume since Q2 last year.

  The biggest market in Q1 this year was Dubai (88 sales), followed by Hong Kong (67), New York (58), Los Angeles (46), Singapore (37) and London (36). While volumes rose in Q1, the total value of sales fell 4% to $7.2 billion. The most expensive average super-prime sales took place in Geneva ($23.8m) and London ($20.4m)

  What is perhaps most interesting, though, is how central Dubai has become in the flows of global capital. In 2019, Dubai accounted for 2% of all super-prime sales in the 12 markets that Knight Frank tracks.

  Today, looking back at the most recent 12-month period, Dubai now accounts for 17% of all super-prime sales, placing it ahead of London, New York, and Los Angeles.

  Part of this jump likely has something to do with the “housing disaster” that Dubai was going through back in 2019. But even still, it is impressive to see just how quickly the city has managed to build and position itself as an alpha global city.

  I much prefer walkable cities, but clearly there are enough other people who don’t care about that sort of thing.

  2023.06.08

• How to brand and market a new development

  The typical way to do it looks something like this:

  • Hire a creative agency
  • Come up with a new name and brand identity that speaks to your target market
  • Create a new website and new social media accounts
  • Start marketing the project with this new single-purpose brand and identity in the forefront (the developer’s brand is usually far less prominent)

  Of course, this is the typical way and things do vary. What I would like to discuss today is this last point: the interrelationship between new project-specific brands and developer brands. Because in most other industries, the brand of the company is paramount. It is everything. When BMW releases a new car model, it is BMW and then the something. It is not the something, with BMW hidden at the bottom of the page.

  So why is real estate any different?

  One possible explanation is the entrepreneurial and opportunistic nature of development. New projects are often the result of people and groups coming together to make a specific “deal” happen. And unless you’re an established player with a long history, you may not have a consumer-facing brand with much equity in it. So you rely on a new single-purpose one instead.

  But perhaps the main reason is that, as an industry, we have never really succeeded at making buildings a product (architects sometimes despise when you call buildings this). It is for this reason that every building can feel like a prototype and that prefabrication remains this dream that never seems to become a reality. A product implies something repeatable and producible at scale. And buildings are generally not that. Every market and site are unique.

  All of this said, there are ways that developers are building meaningful brands for themselves.

  The first way is to obviously focus on building your own brand alongside or in lieu of strong project brands. One example of this is Toronto-based Urban Capital. They build a specific kind of condominium building/product and, to the extent that it’s possible, it doesn’t change whether they’re building in Saskatoon or in Halifax. David Wex, one of the partners, describes this as branded vs. opportunistic real estate development.

  Another example is Toronto-based Fitzrovia (which I wrote about, here). They are one of if not the most active rental developers in the city. And if you go into one of their apartment buildings, you’ll find the same No. 10 Dean coffee shop and bar in the lobby; the same rooftop pool (called LIDO); the same gym (called The Temple); and the list goes on. Their goal is to build a consistent and hospitality-like experience for apartments.

  The second way to go about building a brand is to make it so attractive that other developers will pay you to use it. The best example that I can think of is London-based YOO. A partnership between John Hitchcox (a developer) and famed designer Philippe Starck, they have built a business out of creating branded residences for third-party developer clients. And this is in some ways the holy grail of development: you get paid without taking on the risk of building.

  Of course, this same licensing model is also used with hotels. And hotel brands are globally the most common kind of branded residence. What this obviously tells us is that brands matter a great deal in real estate. They matter so much that developers will pay to use the right one, because it will likely command a premium and it will likely increase sales/leasing velocity.

  It is for this reason that I’ve always felt it important to grow the parent brand alongside any project-level brands. And it’s why we never bother creating new social accounts for our individual development projects. Brand building takes time. If you’re going to invest time and money into one, why not take advantage of the compounding at the very top of the house.

  2023.06.05

• Why so few people drive in Tokyo

  

  Daniel Knowles, who is a correspondent for the Economist, recently authored a book called Carmageddon: How Cars Make Life Worse and What to Do About It. I haven’t read it, yet, but I did just read this excerpt about Tokyo, and it was jam-packed with interesting stats.

  Here are some of them:

  • Among developed cities, Tokyo has the lowest car use in the world. About 12% of trips are completed with a car, whereas 17% of trips are done with a bicycle. Most people walk and/or take transit. Tokyo has the most-used public transit system in the world — about 30 million people each day.
  • Car ownership across Japan is about 590 vehicles per 1,000 people. This is comparable to many European countries. In the US, it’s about 800 vehicles per 1,000. However, this figure drops in Tokyo. Here, the average is about 0.32 cars per household, which was interesting to see because most new housing projects in downtown Toronto have parking ratios that are much lower than even this figure.
  • The average size of a home in Tokyo is 65.9 square meters of usable area. By comparison, the average size of a home in London is 80 square meters. But given that according to Knowles, the average household size in London is 2.7 people, whereas it’s 1.95 in Tokyo. So per capita, Tokyoites actually have more space than Londoners.
  • 35% of streets in Japan are not wide enough to fit a car. If you add in streets that are wide enough to fit a car but not wide enough that a car could stop and not entirely block traffic, this figure jumps to 86%. This to me is a massively significant statistic, because if you want people to walk places you need small streets.
  • 95% of streets in Japan do not allow any sort of street parking — day or night.
  • The average Japanese car owner drives around 6,000 kilometers per year. This is about a third of what the average American does. In my case, it looks like I have averaged about 8,868 kilometers per year over the last 5 years. Though a big chunk of my kilometers would be from longer one-off snowboarding trips. In other words, I don’t drive all that often in the city.
  • Japan has some of the most expensive road tolls/prices in the world. Meaning, Japan does not actively subsidize driving and instead just charges drivers accordingly. Apparently the average is about 3,000 yen per 100 kilometers, which is about CA$30 per 100 kilometers.
  • In addition to not subsidizing cars, Tokyo is also one of the few cities in the world where their public transit does not need to be subsidized. A big part of this has to do with high ridership, but the other important part is that its transit authorities also develop real estate. Shockingly, this means that it tends not to build standalone and single-storey transit stations (ahem, I’m looking at you Crosstown LRT). Instead, they build lots of density where it always belongs: on top of transit.

  I may just have to read Knowles’ book.

  2023.04.21

• New York City is piloting about a dozen motion sensor cameras

  This won’t come as a surprise to many of you. But I recently attended a community meeting where someone was advocating for adding new lanes to a particular road. Their argument was that traffic congestion is forcing too many cars to sit needlessly idle and that that is bad for the environment. The proposed solution of adding new lanes would get traffic moving, reduce idling pollution, and therefore be overall better for the environment.

  I disagree entirely.

  But transportation planning seems to be one of those things that many people feel is intuitive. It’s one of those things where people feel confident saying, “I know how to fix this. We just need to do this.” But the reality is that cities are incredibly complex organisms and it’s not always obvious what should be done. So I think that a big part of making our cities better comes down to having much better data. And that’s why I’m very intrigued by the work that startup Viva, and others, are doing.

  

  Viva uses small street-light mounted cameras and machine learning to track urban mobility (see image above). Currently they track 9 different modes: pedestrian, bicycle, e-scooter, motorcycle, car, van, light truck, semi-truck, and bus. And after they collect this data, the relevant information is extracted and then everything else is deleted for privacy reasons. There are also plans to make this data openly available to the public so that people can use it and/or build on top of it.

  Obviously this is still going to raise privacy concerns and that is something that will need to be carefully addressed. But I do think that the data from a platform like this is going to be invaluable for cities. Among many other things, it will help us to better allocate space among the various modes and design much safer streets. Hopefully it can also help to take some of the politics out of these sorts of decisions: “Here’s the data. Take a look.”

  Viva currently has 1,000 sensors already installed in London (where they are being used to evaluate the impacts of congestion pricing), and about half a dozen in New York. So it’ll be interesting to see what this leads to. And who knows, maybe it will actually turn us all into amateur transportation planners. We’ll certainly have access to a lot more data.

  For more information on Viva, here’s their website.

  Image: Viva

  2023.04.17

• Yes, the most surveilled cities in the world are in China

  Toronto has a lot more CCTV cameras than I would have thought.

  According to this (2022?) data from Comparitech, there is estimated to be about 19,236 cameras installed around the Greater Toronto Area. With a population of around 6.31 million people, this translates into a per capita rate of 3.05 (CCTV cameras per 1,000 people). What this means is that there is almost surely footage of me enjoying a late-night shawarma sandwich after the bar somewhere on the streets of Toronto.

  In some ways, this is a high number of cameras. Tokyo, which is usually considered to be the largest metro area in the world with nearly 40 million people, only has 1.06 cameras per 1,000 people. Dhaka is 0.71. Sao Paulo is 1.04. Osaka is 1.57. And Montreal is 1.03. Though to be totally fair here, Rio de Janeiro is up at 3.34 (and it may be the most dangerous city mentioned in this post). Paris is 4.04. New York is 6.87. Los Angeles is 8.77. And London is 13.35.

  But where things get really exciting is in authoritarian places. Moscow is estimated to have 16.85 CCTV cameras per 1,000 people. And in China as a whole, there is estimated to be roughly 540 million cameras scattered around its cities, which works out to an average of 372.8 cameras for every 1,000 people. For a city like Shanghai, this crudely equals something like 10.6 million cameras.

  It turns out that surveillance is pretty important for things other than shawarma-eating videos:

  Vyborov wasn’t arrested that day, but the police informed him that he was under surveillance through Sfera, one of Moscow’s face recognition systems, for participating in unsanctioned rallies. Considered one of the most efficient surveillance systems, Sfera led to the detention of 141 people last year. “Facial recognition, and video cameras in general in a totalitarian state, are an absolute evil,” Vyborov says.

  Here’s the other thing. Safety is usually touted as the reason to have lots of cameras. But Comparitech’s data suggests that there’s an almost non-existent correlation between lots of cameras and lower crime. I mean, just look at Tokyo. It is basically the model megacity, and its per capita camera rate is only 1.06. The real utility, it would seem, is using cameras and face recognition software to restrict personal freedoms.

  2023.02.06

• Bright Moments should come to Toronto

  I love what Bright Moments is doing. And Fred Wilson’s post this morning — about their latest event in Mexico City — reminded me of that.

  Bright Moments describes themselves as “an NFT art collective on a mission to create environments where artists and collectors witness the birth of generative art together.”

  What this means is that they are working to move the experience of NFT art away from individual computer screens toward physical events where the art can be consumed and also created (i.e. minted) in a group setting.

  For a taste of what this actually means, check out their website and then hang out for a bit with their homepage video.

  So far they have hosted an event in the following 5 cities: Venice Beach (okay, actually a neighborhood), New York, Berlin, London, and Mexico City. And at each stop on their tour of what will be 10 places, they have done an in-person minting of their official collection, called CryptoCitizens.

  I haven’t been to one of them, but I can see how it would be a lot of fun and how it might change your perception of NFTs. So I am hoping that for one of their last 4 stops (the first stop was in the “Galaxy”), they’ll come to Toronto. Ethereum was pretty much created in this city, so I think it only makes sense for there to be Toronto CryptoCitizens.

  If you too would like to see this happen, make sure you tweet at Bright Moments and tell them that they should come to the greatest city in the world.

  2022.11.21

• Koto open day at Fritton Lake, UK

  

  I have written about Koto a few times before (check here and here). They design and fabricate beautiful modular homes and cabins that are designed to connect you back to nature.

  One location where you can already find these cabins is on Fritton Lake, which is about 2 hours and 45 minutes outside of London. The way it works is that you buy a plot of land in the Fritton Lake community and then you choose which Koto home you would like.

  There are two models available — Ki and Miru — and they can be customized as either 2 or 3-bedroom cabins. Apparently it then takes somewhere between 4 and 6 months for your new cabin to be fabricated and delivered to site.

  Prefabrication is, of course, not a new idea. But it does feel like we are finally starting to see some meaningful traction. As recent as 2016, only about 2% of new single-family homes constructed in the US were prefab or modular.

  But today it’s perhaps easy to imagine a world where only the top end of the market builds on-site and custom. Koto is also evidence that these homes can be just as, if not more, beautiful and sustainable.

  FYI: The Koto team is having an “open day” on Saturday, October 1, 2022 at Fritton Lake. If you happen to be in the area and would like to check out the cabins (and do things like swim in the lake), drop them a note to book a spot.

  Image: Koto

  2022.09.25

• Super-prime home sales in New York and London

  Here’s what I can tell you this morning: Real estate development is a bit more fun when you don’t have to constantly worry about supply-chain issues, access to labor, high inflation, and regularly increasing interest rates. That said, if you just want to buy a super-prime property in one of the world’s preeminent global cities, things seem to be just fine:

  

  

  According to FT, both New York and London have continued to see a rise in super-prime sales this year and both have seen more of these sales in the first 8 months of 2022 compared to all of 2019 (before the pandemic). Note: These charts are showing home sales greater than US$10 million and greater than £5 million, respectively.

  On top of this, many or most of these buyers are, apparently, still able to access financing at LTVs of 100% (i.e. no money down). For what it’s worth, there is a London mortgage broker quoted in the article saying that he has arranged more 100% mortgages this year than in his entire 20-year career. Turns out that the best way to ensure access to debt is to not need it in the first place.

  Charts: FT

  2022.09.24

• Interview with the mayor of Amsterdam, Femke Halsema

  

  Back in 2014, Amsterdam became the first city to have what is called a “night mayor.” The role of a night mayor is what the name suggests. They are intended to be the chief executive officer of a city’s nighttime economy. And so it was and it continues to be recognition that the night can be an important economic development tool.

  This seemed to work out well for Amsterdam, which is why many other cities quickly followed suit with their own night mayor elections. During this time, a number of us here in Toronto also started advocating for our own nighttime CEO. (FYI, here is a link to the current night mayor of Amsterdam.)

  But fast forward to today and the tone seems to have changed in Amsterdam. The city’s daytime mayor, Femke Halsema, is now actively concerned about over-tourism and, in particular, the way that some tourists behave when they check-in to Amsterdam.

  Here’s an excerpt from a recent interview that she did with Bloomberg:

  We have to tackle two problems. The first problem is what I’d call the London problem: Our city is becoming too expensive. That is also part of being an international city and having many expats living here. But it has consequences for the middle classes. It’s very difficult to find a house in Amsterdam except for the highest incomes, so our middle class — teachers, police officers, people working in health care — are leaving the city. We’re very alert about it. For a city to survive in the long run you need social stability and people from middle or lower classes to also feel at home.

  Our second problem is the Venice problem: The people who live here become estranged especially in the city center, because it’s no longer part of their city. We have to find a new balance, in being a home for people from Amsterdam and at the same time welcoming international visitors and tourists.

  More specifically, the Venice problem seems to be a problem of behavior:

  It’s not a form of tourism we welcome or don’t welcome — it’s a form of behavior. What we do not welcome is people who come here on a vacation from morals. They express a form of behavior they would not express at home. People coming here to lose their morals is a problem for us.

  It is for this reason that the city is hoping to relocate its red light district to outside of the city center. The intention is not to get rid of it, or for the city to turn its back on its long history of tolerance, but it does want to move it somewhere else in the hopes that Amsterdam will become more associated with culture than hedonism.

  But does moving it actually change any behaviors? If one were to develop a purpose-built “erotic center” from the ground up, is it even possible to make it more integrated with the broader city (minimize the Venice problem) and, to use the mayor’s words, make it more chic than what currently exists?

  These are all exceedingly tough city building questions that can’t really be untangled from questions of morality.

  For the full Bloomberg interview with mayor Halsema, click here.

  Photo by Azhar J on Unsplash

  2022.07.24