All of the talk of people moving to Miami over the last two years is certainly coming through in the numbers. According to this recent rental report by Realtor.com, residential rents in the Miami-Fort Lauderdale-West Palm Beach metro area increased 55.3% on a year-over-year basis (as of February 2022). And the next 2 metro areas on the list are also in Florida. This is compared to a 17.1% increase for national rents, which is quite a bit lower, but still a massive increase. These are clearly unsustainable numbers and eventually things will settle down. How exactly things settle down is yet to be determined. But for right now, the above figure feels to me like a pretty good answer to the following question: If you had the flexibility to work from anywhere, where would you go? Somewhere sunny, I guess.
Tag: miami
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Playful parkades
This is perhaps the wrong post to be writing right now with gas prices where they are, but lately I’ve been thinking about parking garage designs. We have talked a lot about parking minimums and other related topics on this blog, but let’s put all of these aside for today and assume that parking garages are a thing that will continue to exist in our cities.
Generally speaking, parking garages are fairly utilitarian spaces. They store cars and they usually aren’t that nice. And in the case of public garages, they often smell like urine. But there are some extraordinary examples out there. Miami immediately comes to mind as a city with some pretty cool garages. I mean, when you have one designed by Herzog & de Meuron (1111 Lincoln Road) that is usually a pretty good indicator.
When I was there in January, we went walking one night through the Design District and we ended up on the roof of “Museum Garage” to take some photos and take in the views. Once we got there, we found people doing everything from eating dinner to filming TikTok videos. Great spaces attract people. It also helps when all of your parking is above-grade, which is the case in Miami.
Here is another example from Sydney (also pictured above). In this case, it’s a residential parking garage and Craig & Karl were hired to create a colorful geometric mural. Garages are a perfect place to be a bit more playful and have some fun. I think we should do more of this.
Photo via Craig & Karl
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The world’s top performing luxury residential markets
Knight Frank just released the 16th edition of its Wealth Report along with the disclaimer that, with everything going on in Ukraine right now, this outlook is of “little relative importance” and kind of doesn’t matter in the grand scheme of things. In any event, it includes the latest edition of their Prime International Residential Index (PIRI 100), which looks at the annual % change in luxury residential prices around the world. The chart is interactive, but I screenshotted (above) the top risers and fallers. Toronto is 4th in the Americas and 7th globally with a 20.3% year-over-year increase. Miami is also no surprise and came in 4th globally. The top three cities were Dubai, Moscow, and San Diego. Thankfully though, the number two city is in serious jeopardy right now and I suspect that its position will look quite different next year. Money will go where it feels safe and secure.
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Do the best cities have a lot of immigrants?
I tweeted this out last night while watching old reruns of Anthony Bourdain’s Parts Unknown series. This was a great show. If I were to give everything up and become a YouTuber, this is the kind of travel and food channel I would want to make, except that I would naturally have to add in some equal parts around architecture, planning, and real estate.
The responses to my tweet were of course mixed. Some people agreed and some people didn’t. And a few people provided examples of great cities that aren’t particularly known for their openness to new entrants — places like Tokyo. This kind of response is not at all surprising given how divisive this topic has always been throughout history.
But here’s what I was thinking:
1/ There are some obvious current case studies. Consider places like Toronto and Miami, where foreign born residents now make up the majority of the population. These are two fast growing and dynamic cities that wouldn’t be anywhere near as interesting without their immigrant populations. Certainly the food wouldn’t be as good.
2/ Many of the most beautiful cultures in the world are the result of different cultures coming together. Brazil is one example that comes to mind. Throughout history they have been one of the largest recipients of immigrants in the western hemisphere. Sadly, Brazil was also the last country in the western world to abolish slavery.
3/ Rome and Tokyo were cited (in the comments) as two great cities that frankly aren’t all that diverse. According to Wikipedia, less than 10% of Rome’s population is non-Italian. But Rome, while nice, is provincial these days. And Tokyo, while awesome, has a bit of a demographic problem.
4/ Even if you think a place doesn’t have a lot of immigrants and maybe isn’t all that diverse, it is still probably the result of diverse cultures coming together at multiple points throughout history. Maybe because of immigration. Or maybe because of something bad like war. Think of the Moors from northern Africa who crossed the Strait of Gibraltar and conquered the Iberian Peninsula.
5/ An openness to new people could signal and probably does signal an openness to other things. And since we are living in a world that thrives on innovation and new ideas, being open strikes me as being a fairly good and useful characteristic to have.
6/ Lastly, I come from a family of immigrants. I self-identify as being entirely Canadian. But I had to come from somewhere (multiple places, in fact). And so it strikes me as being odd and entirely selfish to want to block the flow of people now that I’m here and established.
What are your thoughts?
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Immersive digital experiences at Superblue Miami
If you happen to find yourself in Miami or London in the near future, I would highly recommend that you check out Superblue. Neat B and I visited Superblue Miami this past weekend and it was an incredible experience.
Above is a short video of one of the immersive installations (click here if you can’t see it embedded above). This one is by the Japanese art collective teamLab and what you’re seeing is a whole year’s worth of seasonal flowers coming to life and then dying off.
It’s meant to show you the continuous change and cycle of life and death that we all live through every day, and you certainly feel that as you go through the space. The installation itself also responds to how you move and interact with it, with some actions encouraging more blossoms.
It’s, of course, all very Instagrammable.
But I think this descriptor is old news and doesn’t do the work justice. Superblue is a serious cultural experience. One of the other works on display right now is a piece by light and space artist James Turrell. And for this one, there were no photos and talking allowed. The timed experience was meant to be more meditative.
It was the first time that I had seen something by James Turrell in real life and it didn’t disappoint. It made me feel things, as did the entire Superblue experience. So again, a top experience that I would highly recommend.
On a related real estate note, the 50,000 sf Superblue space is located in an area of Miami called Allapattah (which is west of Wynwood and 5 miles east of MIA). I’m an outsider to the city building undercurrents of this city, but I keep hearing people talk about the area as the next Wynwood.
The other cultural institution in Allapattah is the Rubell Museum, which I wrote about in 2019 as it was moving over from its original home in Wynwood. Supposedly the family now has the largest private collection of contemporary art in North America. So that’s something.
Maybe these two anchors will be what does it for Allapattah. When we walked around the area there didn’t seem to be much else going on. But we all know how quickly that can change.
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Adam Neumann has quietly acquired some 4,000 apartment units
So it was announced today that Adam Neumann — the cofounder and former CEO of WeWork — has been quietly buying apartment buildings across the United States. According to the Wall Street Journal, he is involved in entities that have acquired more than 4,000 apartment suites valued at least $1 billion.
The buildings, which seem to be fairly typical and have at least a few hundred doors, are located in cities like Miami, Ft. Lauderdale, Atlanta, Nashville, as well as in many other US cities. It’s not clear what the exact plan is for this real estate but people who claim to know things are saying that it will involve “redefining the future of living”, or something along these lines.
Presumably this means catering to young professionals with cool design, fun amenities, and beer taps. Whatever ends up happening, it is interesting to see some of the cities that he/they are targeting. They are the cities that we’ve all been talking about for many years. You know, the ones that are growing quickly and have greater housing supply elasticities.
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How past pandemics affected the urban housing markets of Amsterdam and Paris
Past performance, we are often told, is not necessarily indicative of future results. At the same time, history has a funny way of repeating itself. I recently stumbled upon this research paper by Marc Francke (University of Amsterdam) and Matthijs Korevaar (Erasmus School of Economics) looking at the impact of pandemics on housing markets. More specifically, it looks at the impacts of the bubonic plague on 17th-century Amsterdam and of cholera on 19th-century Paris. Here’s an excerpt that summarizes what they found:
Our analyses for both cities point to substantial impacts of pandemics on property prices. We find that sales prices respond negatively to outbreaks, in particular in heavily affected areas, and that responses are short-lived, with the effects on sale prices being particularly significant in the first six months of an epidemic. Evidence from aggregate house and rent price indices suggests a smaller negative impact on rent prices. Amsterdam and Paris were very resilient to these outbreaks, with population and house price growth quickly reverting to prior trends.
This paper was first published at the beginning of 2021. A lot has changed since then and, in some ways, their findings now seem obvious. There was still a great deal of uncertainty in the market 12 months ago. While it seems like eons ago, I remember our team having discussions around when would be the right time to launch sales for One Delisle. Of course, 2021 turned out to be a record-setting year for housing and that includes the core/urban housing that the media was quick to write off at the onset of COVID.
This is not to say that certain things haven’t changed or that there won’t be further changes — both positive and negative — that come out of this. To give one just example, we all continue to hear anecdotal evidence that a lot of tech talent would now prefer to be in cities like Miami over San Francisco. (I’m not tech talent, but this would be my strong preference.) Did the pandemic help fuel this? Probably. It opened a door for the people who no longer wanted to live in a city with such a supply-constrained housing market. (I’m sure there were other reasons, too.)
These things, of course, happen. Cities are powerfully resilient, but they still need to compete. The bigger point is that cities continue to be our greatest centers of opportunity. And here we have centuries of data and housing records to support the fact that opportunity is both a powerful motivator and a centralizing force for urbanization. This is true even in the face of things like pestilence.
Happy new year, everyone. I think there’s a lot to look forward to in 2022, including far less talk about pandemics and hopefully far more talk of places like Miami.
Photo by Adrien Olichon on Unsplash
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The real smart city is going to be a crypto city
Vitalik Buterin — who is best known as the cofounder of Ethereum — recently penned this post on his blog where he argues that “crypto cities broadly are an idea whose time has come.” (Credit to Shamez Virani for sending the post to me this morning.) There has been a lot of discussion over the years about the rise of smart cities. I for one am not really sure what that means besides the fact that it sounds good and it likely involves a bunch of tech and data collection. But maybe crypto can help.
What Vitalik argues in his post is that we are now at a point in time where blockchain technologies have the opportunity to do two things for cities. One, we can take existing systems and processes and use blockchains to make them more “trusted, transparent, and verifiable.” That would be a very good thing. But the more interesting one is number two. We have the opportunity to use blockchains to create radically new forms of asset ownership (land and other scarce assets) and municipal governance.
One specific example is that of a “city coin”, which cities like Miami are already experimenting with. Supposedly they are one of the first, which of course aligns with Mayor Suarez’s vision to position Miami as a preeminent tech and crypto hub. Though as Vitalik points out in his post, it’s important to maintain some optionality, especially since we are still very much in the early innings of this new frontier. (This recent episode on the Tim Ferriss Show had a great analogy in saying that the anthem at the beginning of the game isn’t even over yet.)
So how might a “city coin” living on a blockchain work?
Well let’s imagine that there are incentives in place for all of us who live in Toronto to own the Toronto coin (there’s still time to come up with a better name). You need it to pay your property taxes, you need it to pay for parking, and you need it to vote in the next election, among many other things. So there’s an incentive to buy and hold it if you’re a resident of this great city, but there is far less incentive to hold it if you don’t live here. (Maybe you own a bit of it because you’re a frequent visitor and/or your relatives live here.)
One of the interesting things about something like this is that it would immediately create economic alignment. Now all of a sudden, everyone who lives in Toronto and owns Toronto coin would have a vested interest in seeing Toronto thrive. At the very least they would want to see the coin hold its value and ideally they would hope to see it appreciate.
At the same time, the Toronto coin could be used for all sorts of governance matters. Take for example, land use and zoning decisions. What if we set things up such that these decisions weren’t made by the people who show up to community meetings in the basement of their local church but that they were instead made by everyone who holds the Toronto coin? i.e. The entire city, all of whom are, in a way, equity holders.
In theory we could do this kind of voting today. However, part of the problem is that the economic alignment isn’t there without something like a Toronto coin. Right now a big part of the economic incentive rests with homeownership. If I own a home and a new development is proposed next to me, I am incentivized to do whatever it takes to selfishly maximize my own individual outcomes. And if that means no development and no more homes for people, then so be it.
But what if we all had part of our net worth tied up in the Toronto coin? And what if when housing supply did not meet housing demand, the value of our coins dropped because it meant fewer residents (less demand for Toronto coin) and more people voting with their feet and moving to other geographies (more demand for some other coin)? This is one of the things about the crypto space. It turns everyone into evangelists because there are now strong economic incentives to be that way.
Who knows if this is the way that things will actually play out. But it is part of the promise of crypto and it is not some pipe dream. It is already starting to take hold around the world and in the US in places like Wyoming and Colorado. For more on this topic, make sure to check out Vitalik’s full blog post.
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The capital of Ethereum
Few people in Toronto seem to be talking about the important role that this city has played and is playing when it comes to cryptocurrencies (specifically Ethereum). And if you believe, as I do, that Ethereum and other blockchain technologies have the ability to form the backbone for an entirely new kind of world, then this is kind of a big deal.
The Financial Times recently published this article about “Wall Street’s crypto whisperer.” It is about a guy named Joseph Lubin who is the founder of a crypto company called ConsenSys and previously the co-founder of Ethereum. Lubin is from Toronto.
If you read the article, you’ll see that Lubin is a pretty bright guy (and now a billionaire with his crypto assets). Born in Toronto, he ended up going to Princeton to study computer science. He worked on Wall Street for a bit (hence the whisperer moniker), but also did a bunch of other interesting stuff, including moving to Jamaica with a girlfriend and working on music production.
In 2013, he was back in Toronto and went to a Bitcoin meetup in the city. The article says it was in a downtown warehouse (which makes it sound pretty cool and underground). And at this downtown warehouse meetup, he met a guy (actually a teenager) named Vitalik Buterin. Vitalik had just written a white paper on what would ultimately become Ethereum and he gave Lubin a copy. Lubin was so “blown away” when he read it that he decided to join the movement.
The two (and presumably others) would then go on to live together in shared houses in Toronto, Miami, and Zug (Switzerland), and work on this new smart contract technology. Today, Ethereum has a market cap of nearly $400 billion (as of September 12, 2021).
Even if you ignore for a second that we’re talking about crypto technologies, this is still a fascinating city building story. It is fascinating because it shows the value of in-person urban interactions (again, the two allegedly connected at a meetup in a downtown warehouse). And it is fascinating because the Toronto braintrust has been instrumental in advancing a technology that could arguably end up powering not only the future of the internet but perhaps the world.
At the same time, it strikes me that we need to be much better at both celebrating and encouraging these kinds of new ideas locally. Are we out in the world telling this story to the best of our abilities? Have we properly positioned Toronto as one of the most important places for cryptocurrencies and innovation in general? Mayor Suarez of Miami has been a great promoter of his city in this regard.
“Innovation” isn’t usually neat and tidy. It happens on the fringe and it is often not obvious at the outset. Imagine what an Ethereum pitch would have sounded like back in 2013. But this is how new ideas start. And Toronto has proven to be full of them.
Photo by Narciso Arellano on Unsplash
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Unicorns overwhelmingly originate in big cities
In the world of startups, a unicorn is used to refer to a company with a market cap greater than $1 billion. A decacorn, the latest benchmark, is what it sounds like in that it’s a company with a market cap greater than $10 billion.
While unicorn status is just one measure, valuations are an important yardstick for cities and countries. How many big new companies are you creating? That is a critical question because, presumably, these big new companies are going to create a bunch of new jobs and generate a lot of new wealth for people.
This recent blog post by Elad Gil is a great summary of what’s happening in the world from this perspective. The raw data is also available if you’d like to dig deeper.
Here are the number of new unicorns since October 2020 by city:
Silicon Valley, not surprisingly, continues to dominate, followed by New York.
Here is a breakdown for the United States as a whole:
Miami and Austin have been in the news a lot over the past year and their startup scenes may very well be on the rise relative to other US cities. But it’s interesting to see other smaller cities on this list, like Salt Lake City, who are, at least right now, holding their own.
I found this last set of two charts particularly interesting:
They are showing unicorn count (first) and unicorn market cap (second) as a percentage of their respective countries. For example, Silicon Valley is sitting at about 47% and 51%, respectively. So about half of all unicorns in the US have originated from this geography.
But for most other cities on this list, the percentage is much higher and, in many cases, it is 100%. (Silicon Valley is perhaps relatively low because the US has lots of other big and important cities.) For me, this shows the continued dominance of cities. If you’re building the next great unicorn or decacorn, the data tells us that you’re probably doing it in a big city somewhere. And I don’t see that changing anytime soon.
