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.

Tag: new york

  • The great intensification debate–what’s better for cities?

    Photograph San Francisco Bay Blues by Stefano Termanini on 500px

    San Francisco Bay Blues by Stefano Termanini on 500px

    I recently stumbled upon a great Treehugger article by Lloyd Alter called: The real triumph of the city will be seen in Buffalo (2014). The post is partially a response to economist Ed Glaeser’s popular book, Triumph of the City, which I’ve mentioned and cited many times before here on ATC.

    Lloyd’s thesis is basically that Ed is wrong in arguing that reducing the barriers to building is the most effective way to maintain housing affordability; that cities are really made out of flesh, rather than bricks and mortar; and that urbanists need to move beyond the view that a city’s past should be preserved at all costs.

    Lloyd then goes on to argue that rather than continuing to over-intensify cities like New York, San Francisco, and Toronto, we should be turning our attention to former powerhouses like Buffalo and trying to figure out how to reinvigorate those cities. The bones are already in place.

    Now, I don’t disagree that there’s lots of potential in cities such as a Buffalo and Detroit. I’ve written a lot about Detroit and I’m genuinely rooting for the city. But I don’t think it’s as simple as it sounds to shift our attention, and I don’t agree with all of the critiques of Glaeser’s work.

    As important as built form is, cities like Buffalo and Detroit remind us that architecture and buildings alone aren’t enough to build a city. There are countless masterpieces – such as Michigan Central Station in Detroit – that regrettably sit abandoned. You need people and communities.

    There’s also a snowball effect. 

    As a city becomes more successful, there’s a natural tendency for more people to want to be there. It’s no different than the network effect experienced by a social network. A social network without people has no value. But the more people you add to it, the more valuable it becomes and the more difficult it becomes to replace.

    So it shouldn’t come as any surprise that people will put up with expensive real estate and small apartments just to live in cities like San Francisco. That’s where they want to be. And as long as the demand to live in those cities is increasing, I continue to believe that it makes sense to build more, not less, housing and to make it reasonably easy to do so.

    At the same time, I believe whole heartedly in heritage preservation. As a trained architect, there’s a strong possibility that I would shed an actual tear should a building with heritage value be torn down in my city or in any city in the world. 

    And that’s why when I was on CBC radio last week I said that neighborhood investment needs to be a balance between preservation and progress. The Twittersphere later blasted me for using the term “progress”, but I think you get my position.

    My interpretation of Glaeser’s work has never been that he supports completely erasing a city’s past in order to make way for the future. If that is his position, then I too disagree with it. 

    My interpretation has instead been that he supports removing unreasonable barriers to development so that cities are able to supply – or can at least try to supply – enough housing to meet growing demand. This also doesn’t exclusively mean high-rise intensification. It could mean removing the barriers in front of things like laneway housing. And I continue to believe that this is a good idea.

    I don’t believe that this approach alone will solve all housing problems, but I do think it’s a great place to start.

    Thank you Lloyd for the great post.

  • Urban Engines launches app

    [youtube https://www.youtube.com/watch?v=FZ8ODREybcs?rel=0]

    About 9 months ago I wrote about a new startup called Urban Engines that was trying to improve urban mobility by using big data to optimize transit usage. 

    Last Tuesday the app launched in 10 cities across North America. So if you’re in Boston, Chicago, Los Angeles, New York, Portland, Seattle, San Francisco, Toronto, Vancouver, or Washington D.C., you can go ahead and download it right now.

    The biggest “wow factor” is probably the augmented reality feature that allows you to hold your phone up and see transit information overlaid on top of the street in front of you.

    But more fundamentally, the real potential lies in the platform’s ability to collect data on the way people move in cities and on how transit lines are performing, so that it can be fed back to improve overall efficiency.

    That’s why the company is also working with cities to give them 24/7 analytics and reporting on how every bus, car, and train is performing in their networks.

    My hope is that with better data at our disposal, we’ll be able to elevate the discussions around transit and transit planning. Without great data, it’s too easy for these discussion to become political.

  • Firm Profile: ASH NYC

    A friend of mine recently introduced me to a young real estate company out of New York called ASH NYC (the founders are around 30). 

    But in reality, calling them just a real estate company is an oversimplification. They’re actually a vertically integrated firm that brings interior design, real estate development, property management, hospitality, and a few other disciplines all under one roof. The way they talk about it is in terms of “joining historically compatible disciplines” and “creating both aesthetic and economic value” – which is a pretty neat approach.

    I’ve written a few times before about the future of the architecture profession and so I think it’s really interesting to see yet another example of design being completely integrated with real estate. And I’m certain we’re going to see more of these kinds of hybrid and integrated business models across many other industries.

    In my own career, I’ve been (somewhat similarly) fascinated by the intersection of design, real estate, and technology. And I suspect that many of you also feel like you’re operating in some kind of overlap. Is that true?

    Image: ASH NYC

  • Where Uber operates and where it’s banned

    Earlier this month, Bloomberg published this map showing where Uber operates and where it’s been banned (or is being challenged). You can click on the map for a larger version.

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    Uber operates in about 250 cities across the world. But it’s being challenged in a lot of them, including Portland, San Francisco, Los Angeles, Toronto, Rio de Janeiro, Paris, Berlin, as well as others.

    I don’t want to dismiss any of the safety concerns that have arisen lately, because those are very serious and they need to be addressed. Life safety is paramount. But I continue to believe that banning a service that many people clearly want to use isn’t the right solution.

    On top of that, I think it could lull many of the local taxi communities into a false sense of security about the future. Uber is moving incredibly quickly. UberX launched in Toronto in September of this year. And UberPOOL – their new carpool service – is likely next.

    With these releases, Uber is working towards a specific vision for the future: Their goal is to eliminate the need for private vehicle ownership. Should they be successful, this will not only impact taxis, but also car manufacturers and urban mobility in its entirety.

    So as difficult as it might seem right now, I think urban leaders would be better served trying to figure out how to harness these innovations. Cities have been trying for decades to get people out of their cars. Uber wants to do the same.

  • The power of architecture

    Architect Bjarke Ingels recently gave a talk at the WIRED by Design conference. I’m a big fan of his work and so I think you’ll really enjoy the talk. What I like is how process driven his firm is. As he explains at the beginning of the video, they always start by researching and analyzing the situation before figuring out how they’re going to intervene. That’s what informs their designs.

    Click here to watch the video. It’s about 20 minutes long.

  • What happens when you demolish a highway

    Earlier today I tweeted this:

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    It’s a link to an article talking about 5 cities – New York, Milwaukee, Seoul, Portland, and San Francisco – who all demolished an elevated highway that used to run through their downtowns.

    To be completely fair, some of these cities didn’t really have a choice. San Francisco’s Central Freeway was so badly damaged in an earthquake that it had to be closed. But it doesn’t make the lessons any less relevant.

    In all of these cases, the elevated highways were taken down and never replaced with another highway. Some were turned into large boulevards. Others were turned into parks. But in none of the cases was a new road of similar capacity built.

    Intuitively it might seem like this would cause utter chaos. I mean, where were all of these cars going to go? 

    But that didn’t happen. Instead, demand redistributed itself. Car volumes dropped dramatically. More people took transit. Some people took other routes. And some people traveled at different times. Oh, and nearby property values all went up.

    And the reason this happened is because of something that economists call induced demand (I’ve written about it before, here). What it means is that as you increase the supply of some valuable good (such as free highways), more of that good becomes demanded.

    In other words: more free highways = more cars on the road.

    So if you’re a city – like Toronto – with an elevated highway running through your downtown, you should give this some serious thought. The outcomes aren’t as bad as you might think. In fact, they’re quite good.

    Image: Seoul via D Magazine

  • Are startups causing inequality?

    Earlier this week Richard Florida published on article on CityLab talking about the relationship between tech innovation (in cities) and inequality. Specifically, the article deals with the correlation between venture capital investment and a variety of factors, such as monthly housing costs, wage and income inequality, and so on.

    The intent of the piece was to address the growing backlash against tech workers – in places like San Francisco – who have become the symbol for the growing gap between the rich and poor.

    The strongest correlation appears to exist between venture capital investment and housing costs. As the amount of venture capital goes up, so do housing costs – which probably shouldn’t surprise you. The rich start outbidding the poor for housing. Note: The two outlying dots at the top right, in the graph below, are Silicon Valley and San Francisco.

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    But when it comes to inequality, the relationship isn’t so clear. For wage inequality, there seems to be a relationship. But for the broader income inequality measure, the relationship is fairly weak. Here’s the graph:

    image

    So this is not as black and white as it might seem. Regardless, Florida ends the piece with the following statement (that I think is spot on):

    It’s time to stop pointing fingers and get on with the far more important task of harnessing the urban tech revolution to create a new urban middle class and a more inclusive urbanism—one in which many more workers and residents can participate, and one from which many more can benefit.

    The answer is not to stop innovating. That would be counterproductive. We should be be encouraging innovation, but at the same time figuring out how best to harness it for society as a whole.

    Tomorrow, I’ll touch a bit more on how we might go about doing that. I have a post planned that I think will tie in really nicely to this discussion. So stay tuned.

  • In search of affordable housing

    Earlier this week I stumbled upon this entertaining article from the Guardian talking about how expensive housing is in London. The author’s tongue-in-cheek suggestion was to setup a new miniature London in the middle of nowhere where everyone could flock for affordable housing, but where many of London’s attributes could be exported: “We can all refuse to wear socks and sell each other overpriced cocktails in jam jars.”

    All joking aside, the article is yet another reminder that big global cities are expensive places to live. And in these cities, one of the most precious commodities is, quite simply, personal space. That’s why a garage in London can sell for £550,000 and why a 35 square foot storage cage in New York can sell for $75,000

    But affordable housing is not the reason why people want to live in places like London and New York. If it were, they wouldn’t be coming. Instead, they come for lifestyle, wealth creation, and the dating market – among other things. However, at a certain point, usually when they form families and start to need/want more space, they start looking around.

    Here’s an infographic via the Atlantic showing how relationship status impacts where people tend to live in London. The purple areas indicate an “above average concentration” of a particular relationship status. As you can see, single people tend to live in the core of the city, and when they get married, they move out to the periphery. Intuitively, this probably makes sense to you.

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    However, I’m always curious as to whether this trend happens more because of consumer preference (people don’t want to raise kids downtown) or because of economic necessity (they can’t afford anything beyond a shoe box apartment). Because if it is largely out of economic necessity (and the Guardian article would suggest it is), then we’re not creating the inclusive cities and neighborhoods that all city builders like to talk about.

    So how do we get better at this?

    In my view, and I’ve argued this before, the first step should be about improving supply. That is: get more housing built. And the way to start doing that is to make land available and improve the approvals process for new developments. In a recent McKinsey report, they referred to my first point as “unlocking land.”

    “Land cost often is the single biggest factor in improving the economics of affordable housing development. It is not uncommon for land costs to exceed 40 percent of total property prices, and in some large cities, land can be as much as 80 percent of property cost.”

    The reason this is important is because most big cities operate with massive supply deficits. There simply isn’t enough housing. And so if you can address that at a fundamental level, you can actually do a lot to start improving affordability.

  • Comparing taxis to ride sharing services

    This morning I woke up to a post from venture capitalist Fred Wilson talking about the cost of loyalty when it comes to local transportation markets. More simply, it was a cost comparison between regular city taxis and ride sharing services such as a UberX, Lyft, and Sidecar in San Francisco, Los Angeles, and New York.

    The data was sourced from whatsthefare.com and looks like this:

    The way to understand this chart is to think about it as the answer to this question (from whatsthefare.com): If I were to take 1,000 rides over my lifetime with one individual service, how much more would I pay than if I compared prices and always picked the cheapest option?

    What you should immediately see is that regular taxis are far more expensive in San Francisco and Los Angeles compared to all of the ride sharing services. In the words of Fred Wilson: “That is crazy. They are going to go out of business in those markets with that pricing.”

    In my words: They are fucked.

    I wonder where Toronto would place against these cities. My gut tells me that we would be closer to San Francisco than New York. And if that is the case, I think you can figure out what that means.

    I thought this would be an interesting post given yesterday’s point about our cities being multi-modal. We urbanites have many more options at our disposal than we did only a few years ago. And if they’re cheaper and more convenient, we’re going to use them. I think that’s a good thing.

  • Top 10 (US) cities for young smart people

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    I’m always on the lookout for great websites and communities dedicated to cities. And today, thanks to a friend of mine, I found a new one called City Observatory. It’s my new favorite site for city geeks.

    They describe themselves as a “data-driven platform for sharing, analyzing and discussing the success of cities.” As soon as I read that, I immediately subscribed. I’m a big believer in using data to elevate the discussions happening around our cities and to cut through the bullshit.

    I’m looking forward to digging into more of their articles, but I did already take a look at the first report they published, which is called: “The Young and Restless and the Nation’s Cities”. Click here to download the PDF.

    What the report talks about is a demographic group that they refer to as “Young and Restless”, and which they define as being 25-34 years old and having a 4-year degree. And they focus on this group because they see it as critical to driving local economic development.

    They’re the next generation who are going to start those companies and drive growth and innovation. And since the data shows that as people age, they become less willing to relocate (which intuitively makes sense), cities today are quickly realizing that they need to capture this group of smart people while they’re still restless (i.e. mobile).

    So if this is important, which cities (in the US) are winning right now? Here are the top 10 cities via City Observatory:

    1. Washington D.C. 8.1%
    2. San Francisco 7.6%
    3. Boston/Cambridge 7.6%
    4. San Jose 7.5%
    5. Denver 7.5%
    6. Austin 7.0%
    7. New York 6.6%
    8. Minneapolis 6.6%
    9. Raleigh 6.5%
    10. Seattle 6.1%

    The percentage represents the portion of the population that’s 25-34 years old and has a 4-year degree. I’ve just listed the cities here, but in reality they reference the entire metro areas.

    Do any of the cities on this list surprise you? None are surprises for me. It’s more or less what I would have expected to see, except maybe for the absence of Chicago (it’s 12th according to this ranking).

    Is your city doing enough to capture this group?

    Image: Flickr