Brandon Donnelly

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.

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Tag: new construction

  • The definitive but crazy guide to creating more affordable housing

    Okay, so maybe this isn’t an entirely definitive guide. But the intent is to make this post a kind of working post. As new ideas emerge (from my end or from your ends), I will endeavor to update it, so that maybe one day it will become a bit more definitive. I also think it’s important to keep it a little crazy. Because housing affordability is clearly a tough problem to solve, so unless we start thinking differently and acting boldly, we may not get there.

    Here goes.

    • Encourage new housing at all scales (low, mid, high)
    • “Upzone” all major streets and transit station areas
    • Allow multi-unit dwellings in low-rise neighborhoods and ensure that any applicable codes and/or policies are not creating unnecessary obstacles to building at this scale
    • Work to make the largest possible housing scale permissible on an as-of-right basis — that is, remove the rezoning process wherever possible and allow builders to go right to a building permit (a lengthy rezoning process can cost millions)
    • Avoid the use of inclusionary zoning policies that do not provide an equal offset or subsidy (such as a density bonus)
    • Ensure that any development charges and levies are commensurate with the burdens created by new housing and that existing property owners are funding their fair share through property taxes
    • Identify the areas that are NOT seeing new housing and then create incentives to make development feasible
    • Search for underutilized land and other opportunities to add new housing — no land parcel should be considered too small
    • Incentivize small-scale prototypes as a way to test out new ideas and foster innovation — specifically with respect to climate change and construction productivity
    • Eliminate all parking minimums – no ifs, ands, or buts
    • Depoliticize the planning process as much as possible — local politicians are not generally incentivized to encourage new housing
    • Eliminate the ability for individuals to block or significantly delay new housing
    • Ensure that there are enough staff to expeditiously review and process development and building permit applications — if builders are hiring “expediters” in the hopes of moving these things along, it means something is broken
    • Put in place strict response and issuance timelines for building permits
    • Bonus city staff (and anyone else who touches housing supply) based on the number of housing units approved and permitted each year
    • Design smaller and more urban-friendly garbage trucks so that less space is lost in every new housing development
    • Reduce/eliminate complex urban design guidelines, such as Toronto’s widely used 45-degree angular plane guideline

    What is missing from this list? And/or what did I get wrong?

    Last updated: July 25, 2022

  • Our cities are full

    One of the most common objections to new housing is that the place is already too crowded and potentially even full. But Jerusalem Demsas’ recently article in The Atlantic about how much people seem to hate other people is a good reminder that the topic of overpopulation can be a complicated one.

    Because what are we really saying when we say a place is too crowded or full? Is it just that this particular neighborhood is full, or are we talking about entire cities being full?

    Moreover, who determines when a place is full? Berkeley, California is, for example, a hell of a lot less dense than a city like Paris. So if a place like Berkeley can be considered full by some people, what does that mean for Paris? Presumably it’s entirely unliveable.

    Or could it be that the entire world is simply full and we should be looking at more drastic measures to curb population growth (in the places that are actually reaching replacement-level fertility rates)?

    It’s all very complicated. Thankfully Demsas offers up some possible solutions in her article:

    We have, of course, discovered an elusive technology to allow more people to live on less land: It’s called an apartment building. And if people would like fewer neighbors competing for parking spaces, then they should rest assured that buses, trains, protected bike lanes, and maintained sidewalks are effective, cutting-edge inventions available to all.

    The rest of the article is just as good.

  • Zoned housing supply vs. actual housing supply

    This Twitter thread by UC Davis Law Professor, Chris Elmendorf, is a good reminder that there can be a meaningful difference between actual completed homes and zoned land that might one day becoming new housing.

    The point he makes is as follows: The state of California’s housing needs allocation for the city of San Francisco is approximately 80,000 new homes over the next decade. In the past, cities could demonstrate that they were able to meet these targets through, as I understand it, some fairly loose assumptions. But more recently, amendments have made it such that the probability of new homes actually getting built needs to be considered.

    San Francisco has been doing this and, according to Chris, the conclusion was that the city should upzone portions of the city — primarily on the west side — to allow for some 22,000 new homes. Sounds cool. But as part of this process, the city also hired an outside consultant to run indicative pro formas and assess overall development feasibility. This is what they found:

    I haven’t seen any of the actual numbers, but what this chart is saying is that nobody is going to develop on the west side of the city no matter what entitlements you put in place (tier 3 and tier 4 market areas). The only new development that is likely to take place is high-rise development over 24 storeys in the highest value submarkets (tier 1 and tier 2 market areas).

    Based on this, the 22,000 new homes figure is probably closer to 0 new homes.

  • Does new housing supply need better economic incentives?

    I watched a bit of the English leadership debate the other night. Eventually I got frustrated and went to bed, but I understand that housing affordability and overall affordability were important topics.

    What is clear, to anyone who cares to look, is that in most big cities we are not building enough new housing. According to the above Economist article (linked in the above tweet), the “rich world” has seen new housing production drop by about 50% (relative to population) since the 1960s.

    There are many reasons for this. But part of the problem is bureaucracy. Things move exceedingly slow. And another part of the problem is community opposition. Urban sprawl can be easier to swallow because there’s an out-of-sight-out-of-mind phenomenon at work. Stuff may be happening, but it’s not happening in my backyard.

    But now that so much of what we do is centered around intensifying existing neighborhoods, we are faced with a battle between the incumbents (existing residents) and the future residents of a community that don’t have nearly as much say — if any at all.

    What I like about the Economist article is their line of thinking for how to address this dynamic, which, at the end of the day, is rooted in what I will call expected selfishness.

    The approach is around aligning incentives. How could we better structure the delivery of new housing so that more stakeholders stand to directly benefit? Because as we have seen with laneway housing here in Toronto, homeowners will gladly build in their backyard when they stand to benefit directly.

  • Accessory dwelling unit (ADU) supply in California

    This recent article by Bloomberg CityLab, about “how California set off a backyard apartment boom,” has some interesting stats about the extent in which accessory dwelling units (ADUs) are quickly being adopted and delivered across the state.

    For one, a majority (87%) of jurisdictions have enacted at least one ordinance related to ADUs, though many have several. These policies might include everything from by-right zoning to some form of financial assistance if you build. Here is a graph showing the cities and counties that have created ADU ordinances since 2013:

    All of this has translated into housing supply. In 2019, California homeowners brought over 12,000 accessory dwelling units to the market (based on permits issued). Though a relatively small quantity based on the state’s overall housing deficit, this number is surely growing thanks to policies and programs, like this one here, that are working to remove the barriers to building.

    For the full CityLab article, click here.

  • Net new housing units in New York City since 2010

    Here are a few interesting stats from a brief report that New York City published this month about their supply of new housing units:

    • From January 1, 2010 to June 30, 2020, New York City delivered 205,994 net new housing units across the five boroughs.
    • This total includes 202,956 units from new construction and 29,161 units from the alteration/conversion of existing buildings. However, it also factors units that were lost as a result of demolition (-17,400) or alteration (-8,723).
    • Brooklyn saw the most supply, followed by Manhattan. The four highest-growth Community Districts were responsible for 1/3 of all new housing additions. These CDs are all formerly non-residential areas that were rezoned to allow living.
    • Manhattan saw the greatest loss in housing units as a result of alterations (people combining units). This was most prevalent in wealthy neighborhoods such as the Upper East Side, Upper West Side, and Greenwich Village.

    What is interesting about this last point is that it shows you that cities are far from static. New York City lost 26,123 housing units during the above time period, with 8,723 units being lost to alterations and people combining units.

    The orange areas on the above map are neighborhoods which actually became less dense over the last decade. And of course, this phenomenon is not unique to New York City. We are seeing the same thing play out in some/many neighborhoods in Toronto.

    What this mean is that the role of new development is really twofold. It allows a city to grow (i.e. house new New Yorkers), but it also replaces lost housing and relieves some of the pressures on the existing housing stock. I don’t think many people appreciate this dynamic — or perhaps they don’t care.

    For a copy of the full report (it’s only two pages), click here.

  • I want an expensive condo

    The Globe and Mail published this headline today: “Developers building more small condos, despite people clamoring for more space.” It’s behind a paywall and so some of you may not have read it. But the data looks something like this. Of all the new condo project launches that happened this year in Toronto, studios and one-bedroom suites accounted for 61% of all new inventory, according to Urbanation. This is a higher percentage than what the market saw in 2019 and 2018, and this is despite the fact that many/most people are still working from home and would probably appreciate a bit more space.

    The short answer as to why this is happening is affordability. For years I have been clamoring for a dual aspect oceanfront penthouse on Miami Beach, but that time hasn’t come for me yet. Things cost money. And the downward pressure on unit sizes is a direct result of developers trying to ensure that their inventory is within the reach reach of buyers (there’s a sweet spot somewhere in the range of $500-700k right now). Developers are heavily incentivized to build what sells and rents, both quickly and at the highest price. That tends to be smaller units, especially early on.

    Where this goes in the future is anybody’s guess. But with the dramatic price increases that we have seen on the low-rise side of the market, I suspect that we’ll see a subsequent surge in demand for condos — maybe even larger condos.

  • Register your interest for One Delisle

    Toronto will soon be home to One Delisle — the first residential building in Canada designed by visionary architect, Jeanne Gang of Studio Gang.

    Jeanne Gang is known for challenging the stylistic and technical parameters of architecture. Named one of the most influential people in the world by TIME 100 in 2019, Gang is a MacArthur Fellow and a leading advocate for gender equality in the field of architecture and design.

    Gang and her eponymous studio are responsible for some of the world’s most diverse and compelling buildings and spaces. One Delisle, as seen in the rendering above, will break from convention and refresh Toronto’s skyline. The rhythmic exterior maximizes natural light, views, and outdoor living for residents.

    One Delisle was revealed this evening for the first time to a select group of Toronto’s top real estate brokers. Follow #onedelisle on IG for some of the reactions. It was done online via a livestream, which was exceptional for what it was, but is obviously not as great as being in one room together. That time will return.

    At this point, we are thrilled to announce that we are opening up “limited registration” for the project. If you’d like to register your interest, you can do that now at onedelisle.com. However, to register at this phase of the project, you’ll need to pay a one-time fee of C$150.

    Why are we doing that?

    We’re doing it to ensure that those who are genuinely interested in a One Delisle residence get first access to the project when it launches next year. Anyone who registers during this “limited registration” phase will be guaranteed a private appointment at our sales gallery before the general public.

    So what else do you get?

    In addition to first access — including first access to the project’s terrace suites — limited registrants will receive a copy of Studio Gang: Architecture (retail price, US$100), an invitation to our One Delisle Film Series, an invitation to our launch event (including a talk with Jeanne Gang), as well as other exclusive news and updates.

    The other thing I’d like to point out about the project’s website is that the animation you see on the homepage (pictured above) will, in fact, change depending on the time of day wherever you are and when you visit the website.

    This allows you to get a feel for how the architecture might respond to light and shadow throughout the day and how it might be illuminated at night. What you’re seeing above is an artist’s impression of that night view.

    For more information and to register your interest, visit onedelisle.com.

  • First shoring rig arrives at Junction House

    Our first shoring rig was delivered and setup today at Junction House. A second one is on the way shortly.

    It will take a couple of months to complete all of our caisson piles. If you’d like to learn about how shoring is constructed, check out this “explainer” from UrbanToronto.

    It was also an absolutely beautiful day here in Toronto — not a cloud in the sky. So here are a few photos from site.

  • Dubai’s housing crisis

    This week Bloomberg reported that Dubai is facing a “housing disaster” as a result of overbuilding. There’s simply too much supply coming onto the market. About 30,000 units are expected to be completed this year, which the industry believes is about 2x actual demand. As a result, the industry — yes, the development industry — is calling for a 1-2 year pause on all new construction in the city so that the excess units can be absorbed and demand can catch up.

    I’m not an expert on the Dubai market. And I’ve only been to the city once. But my sense is that there are relatively few barriers to new supply, especially compared to markets like Toronto and San Francisco. And so it’s not surprising to hear that supply is and has been outstripping demand. According to Bloomberg, the market peaked about 5 years ago.

    For the industry to call for a moratorium on new construction it must mean that there’s concern of a prolonged housing slump and perhaps even some sort of systemic collapse. But if the objective is more affordable housing, than you might argue that Dubai has been doing a pretty good job of that. Here is a global city with a “housing crisis” on the opposite end of the spectrum. So what is it that makes Dubai different than, say, London or San Francisco?

    Photo by David Rodrigo on Unsplash