Daily insights for city builders, delivered every morning at 6 AM ET. I’m Brandon Donnelly — a Toronto-based real estate developer and founder of Globizen. I’ve been writing here since 2013.
There are many reasons why one might want to host the Olympics. Brand building is certainly one. Making some kind of profit is another. But the direct economic benefits aren’t always clear. Embedded above are two recent charts from the WSJ outlining 1) the cost of the Olympic Games over the years (the exact numbers are likely debatable) and 2) some of the overruns that host cities have seen. Montreal stands out as an unfortunate outlier with cost overruns exceeding 700%. And Tokyo stands out as being the most expensive games ever. As I understand it, the economics are challenging in the best of times. So one can only imagine what kind of dent the Tokyo Olympics might leave behind.
The urban-to-rural transect is a New Urbanist planning framework that prescribes a smooth continuum of settlements that go from least dense to most dense. The six zones are as follows: natural (T1), rural (T2), sub-urban (T3), general urban (T4), center (T5), and core (T6).
Part of this framework is about rejecting single-use Euclidean zoning. Instead of segregating uses, New Urbanism looks to return to a mix of uses within close proximity of each other. This is a good thing.
But the transect also advocates for a certain orderliness. There should be a smooth transition as you move outward from T6 toward T1. It is about placing things in their useful order and maintaining a certain kind of character.
Witold Rybczynski makes an interesting observation about this in a recent post called “urban discontinuities.” The point he makes is that some of the most remarkable urban moments are the result not of smoothness, but of “odd juxtapositions.”
Think:
– Mount Royal (T1) in the middle of downtown Montreal (T6).
– The North Shore Mountains (T1) that terminate views from within the building canyons of downtown Vancouver (T6)
– The walls of tall buildings (T6) that frame Central Park (T1) in Manhattan
– The wonderful ravines (T1) that cut through Toronto’s urban fabric (T6)
These are contrasting zones in the transect bumping up against each other. And it turns out that most of us really like these moments. But I think that the bigger point to be made here is that urban environments aren’t always neat and tidy, and that’s because they are a constantly evolving organism.
That’s not a bug. It’s actually a feature to be celebrated.
Rachelle Younglai’s recent piece in the Globe and Mail does a great job summarizing Canada’s COVID-19 housing boom. The title of the article is, “How Canada’s real estate market defied expectations in the COVID-19 pandemic.”
Non-mortgage debt is down. Mortgage debt is up. Money is cheap. And people are clamoring for drivable vacation homes. Average home prices in places like Prince Edward County and the Kawartha Lakes (both outside of Toronto) are up ~30% from Jan 2020 to Jan 2021.
But after I sent this article around this morning, I was reminded that this is a good summary of what has just happened. It, for the most part, does not speak to what might happen going forward.
None of us can travel anywhere. We’re stuck at home. And immigration volumes last year were down some 48% in Toronto, 43% in Vancouver, 40% in Montreal, and 46% in Calgary. The Toronto region went from about 120,000 new permanent residents in 2019 to about half that last year.
The behaviors and market outcomes that we have seen over the last 12 months, therefore, make intuitive sense. But how about the next 12 months or the next 5 years? I would prefer to use this latter time period for decision making right now.
Proptech Collective has just published their inaugural 2021 Proptech in Canada report. Here are a couple of screen grabs that you all might find interesting:
What these images should tell you is that the Canadian proptech landscape is fairly Toronto-centric, but that it’s also very much in its nascent stages. We’re just getting started here.
This is an excellent article by Alex Bozikovic, Joe Castaldo and Danielle Webb about the 15-minute city. In it, they do a block-by-block analysis of how many Canadians actually live in what they are calling an “amenity dense” neighborhood.
Their definition of amenity dense:
Grocery store, pharmacy, and public transit stop within one kilometer
Childcare facility, primary school, and a library within 1.5 kilometers
Healthcare facility within three kilometers
Place of employment within 10 kilometers
Once you apply this filter to Canadian cities, it turns out that only about 23.3% of city dwellers live in this kind of amenity dense neighborhood. It’s really only our three largest cities. For the most part, we have built environments that want you to have a car.
When it comes Toronto, and also Montreal, it is a tale of two almost equally divided cities. If you live in a central neighborhood, you’re probably dense with amenities. But in the inner suburbs, it becomes pretty spotty. And though it can be done, this is not an easy change.
The full article has many more of these city maps and so I would encourage you to check it out. It’s a great piece of journalism.
I recently discovered a company called Hinter (a colleague, who clearly knows me very well, sent it to me). It’s exactly the kind of the company that I would love to start, if only there were 30 hours in a day. They’re a non-traditional hotel in that they work with “iconic architects” to build unique spaces that are distributed and hidden in nature. (They also have a policy of planting 10 new trees for every booking.)
Today’s post is a profile of their Hinterhouse (hh1) by Montréal-based Ménard Dworkind Architecture & Design. The space is located in La Conception, Québec, which is about 15 minutes from Mont-Tremblant. It’s 980 square feet (which is all you really need) and has 2 bedrooms. There’s also a private sauna and outdoor shower in a separate outbuilding. As soon as I saw it, I felt inspired and immediately opened up Realtor.ca to look for available land. Maybe it will do the same for you.
I was in Montreal for the long weekend and I decided to take the time off from writing. I don’t do that very often, but it was the right thing to do this past weekend.
Montreal is one of my favorite cities. I spent quite a bit of time there when I was in my early 20s and I almost ended up at McGill for my undergraduate degree. So I have a soft spot for the place.
One of my friends once described Montreal to me (and contrasted it against Toronto) by saying that it has grandeur. And I think that is exactly the right word.
There are so many moments throughout the city where you just feel its impressiveness. It’s almost as if, from the very beginning, the city knew what it was destined to become.
In contrast to this, urban planner Joe Berridge has, in the past, referred to Toronto as an accidental metropolis. And I think that is a similarly accurate way of describing our city.
Sometimes in Toronto (or perhaps oftentimes, depending on who you ask), you have to scratch a little beneath the surface to find what makes Toronto a truly great city.
It’s as if the city didn’t know what it was destined to become, and built accordingly. Things just happened — accidentally.
Grandeur isn’t usually something that is discussed today in city planning circles. We instead talk about things like angular planes, context and, of course, building height.
But maybe it’s time we rethink our list of requirements. Maybe it’s time we ask ourselves: “Are we creating a city with grandeur?”
I received an email this week from a senior real estate executive who was sharing the fact that, in response to COVID, he had decided to give up driving completely. He was now cycling everywhere — whether for work or for personal errands. And it was doing wonders for his health and his overall well-being.
Indeed, this feels like some sort of golden era for urban cycling. Back in May I wrote about how Toronto City Council had just approved the largest ever one-year expansion of bike lanes. Some 40 km. When have we ever moved this quickly and without months (okay, years) of painful debate? Probably never.
Of course, it’s not just Toronto. This is happening all over the world. Here are some of the numbers (taken from this recent Journal article):
Paris added 400 miles of pop-up bike lanes across the region — all of which didn’t exist before the pandemic – some of the streets being tracked have seen a doubling in usage
Oakland closed almost 10% of its streets to cars
Montreal is adding an additional 70 miles of pedestrian and cycle paths
Bogota is the midst of planning for 47 miles of temporary bike lanes
The UK has fast tracked over $315 million in capital spending for bike infrastructure — referring to this as a “once-in-a-generation” opportunity
New York’s bike share service (Citi Bike) saw year-over-year usage surge 67% in the first 10 days of March alone — before any shelter-in-place rules were even imposed
There are obvious reasons for this rush to build out cycling infrastructure. We’re in the midst of a global health crisis and people are staying away from public transit in big numbers. But I think it’s also important to keep in mind that in many / most cases, there is really no other viable mobility solution. You cannot take all the people that used to ride the tube in London and plop them into cars. There isn’t enough space.
So cities all around the world are doing the sensible thing and acting fast to make sure that it’s safer for people to move about on bikes. But as we all know, humans tend to have a bias toward the status quo. And so when this is all said and done, I suspect that many of these pop-ups will end up sticking around. And that will be a good thing for cities.
This week, RBC Economics published a study on Canada’s rental market where they argued that the pace of new supply needs to at least double in markets like Toronto in order to meet future housing demand and balance the market. Similar things, I’m sure, could be said about many other housing markets around the world.
The report pegs the current rental housing deficit in Toronto at about 9,100 units:
And because they believe that the cost of ownership is pushing more people into rentals, the number of renter households is expected to grow at an average rate of 22,200 units per year in Toronto.
If you take 22,200 units per year over the next two years, and add in the current deficit of 9,100 rental units, you get to a total count of 53,500 rental units. This is what RBC Economics believes must be delivered to the market in order to restore equilibrium, and decrease the upward pressure on rents.
Rental units are, of course, delivered to the market in two main ways. There’s purpose-built rentals and there are for-sale units that end up as rental housing. But even if you amalgamate both of these tenures, we are not building enough housing.
Against this backdrop, I find it curious that developers are so often vilified. Earlier this week, I saw Jennifer Keesmaat tweet out that — as we ready for this fall’s federal election — any sensible housing plan must move away from our current for profit housing delivery model.
Who, then, will build these 53,500 rental units? That part wasn’t clear to me.
A colleague of mine sent me this Bloomberg article today and said, “Here’s an article about things you already know.” The article cites a recent report by Altus Group that compared government-related fees on new housing across Canada and the U.S. What they discovered will not surprise any of you who are in the industry: Toronto has some of the highest government-imposed charges on new homes.
For new condo apartments, the report found that government charges can add up to as much as C$124,582 per unit. That’s about 50% higher than the average unit in the U.S. and about 30% higher than the average unit in Canada (see above chart for the list of cities). While all of us in the industry can appreciate this, I don’t think most homeowners and tenants understand this. Hopefully they’re reading this post.
