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: pandemic

  • Merry Christmas everyone

    I’m taking the day off from blogging (kind of), but I would be remiss if I didn’t leave you all with something city related. And so here is an article by Bloomberg CityLab talking about how the quality of municipal Christmas trees can serve as a kind of proxy for a city’s current state of affairs. In other words, the inability to execute on a reasonably good Christmas tree is perhaps a signal of other municipal problems.

    For those of you who celebrate Christmas, I hope that you’re somewhere with a tree that doesn’t look like a toilet brush or a plucked chicken (these are some of the dubious monikers that have been given to bad Christmas trees around the world). I know that this is not the Christmas we all ideally want. This time of year can be lonely without family and friends. But I think we have every reason to be optimistic about 2021.

    I wish you all health and happiness. Merry Christmas everyone.

    Photo by Roberto Nickson on Unsplash

  • The roaring twenties

    We’ve all heard stories or know people who have made the decision to leave the city during this pandemic, either temporarily or permanently. Some young people have moved home until things settle down and some people have sold their real estate and bought something outside of the city.

    I don’t know know what the exact numbers are, but you can see this trend being reflected today in downtown rental rates and other indicators. This is happening in many cities around the world.

    But here’s what I think about when I hear these stories:

    1) Are these people assuming that we will never go back to offices and that WFH is our new reality? In this case, the thinking is simple. The world has changed. I need a proper Zoom room and a home gym.

    2) Did these people never really like urban living or have they simply outgrown the city? Pre-pandemic, family formation was still a major pull away from downtowns for many. In this case, a move was going to happen regardless.

    3) Or are these people taking a short-term view of the world and forgetting/ignoring that our global cities are going to rebound and that 2 hour commutes really suck? (Sitting in front of Zoom all day is also no way to live in my opinion.)

    There are both positives and negatives to urban living. There are forces that make people want to centralize and there are forces that make people want to decentralize. And the reality is that many of the benefits and perks of living in a city are temporarily turned off right now.

    Things are not fun right now, but this isn’t going to last. I’m looking forward to the roaring twenties.

  • How many people are actually using a COVID exposure alert app?

    One of the things that I don’t think we are doing a good job of here in Canada is promoting our COVID Alert app. Most of the people I talk to don’t seem to have it installed on their phones. And most of the people I talk to seem to be nervous about sharing personal information with it, including their location. (That’s not actually how the app works.)

    The thing with exposure alert apps is that they’re only really useful if most people are using them. And they’re only really useful if people who test positive for the virus enter the code that they are given into the app. So it relies on us trusting that other people will do the right thing. I get that. But those same shortcomings apply when we just ask someone if they’ve been exposed to anyone with COVID-19.

    I could be wrong, but my view on this is pretty simple.

    If everyone who had COVID-19 got immediately sick and showed highly discernible symptoms, then this virus would likely be a lot easier to control. Part of the problem, as I understand it, is that some people get really sick and some people don’t get sick at all. But these latter people can still unknowingly spread it around — perhaps to other people who might get really sick.

    Given this variability, it’s critical for us to know who has been potentially exposed and who has not been exposed. Otherwise, we’re running around mostly blind. From what I can tell, exposure alert apps are one of the best ways for us to track transmission. But, of course, it only works if you’ve got the app. For those of you who don’t already have it, you can download it for both iOS and Android by going here.

    P.S. I’m writing this post because it came up with my barber today while I was getting a haircut. He wasn’t all that aware of the app, but he ultimately concluded that we have a problem of education and that he was going to download it. Maybe some of you will do the same after reading this.

  • Learning from the Spanish Flu

    “We learn from history that we do not learn from history.” -Georg Hegel

    Back in March, I was reading everything I could find about COVID-19 and about pandemics. Eventually that tapered off. But this week I decided that it was time to go back and learn a lot more about the 1918 Spanish Flu.

    I’ve just ordered John M. Barry’s 2004 book called The Great Influenza. Bill Gates wrote about it over the summer — after he reread it — and said that it will teach you almost everything you need to know about the influenza. He also said that it’s never been more relevant.

    Despite happening over 100 years ago, there are no doubt lessons that we can learn from this great influenza. The most important being that leadership and honesty, of course, matter a great deal during a time of crisis.

    Barry also argues that the 1918 influenza was responsible for altering the flow of history. He makes the claim (convincingly according to Bill) that it was a contributing factor in the rise of Hitler and the start of World War II.

    So I’m looking forward to receiving my copy later this week. If you’d like to purchase your own, you can do that over here. And if you’ve already read it, please let me know what you thought in the comment section below.

  • The resilient city and road pricing

    Joe Berridge’s recent opinion piece in the Globe and Mail is a good reminder — in the face of a whole lot of uncertainty — about the resiliency of our cities.

    Those previous decades saw a surge of people and jobs locating downtown, with consequent escalation in rents and prices of offices and housing. Why? Partly demographic, as the well-educated children of the baby boom reached adulthood, and partly lifestyle and work style. Young people go to big cities not just to work and live, but for sex, style, money and power. For ambition and anonymity. And for risk. All in the petri dish of downtown density. These drives have always been as powerful as their subsequent search for suburban security and community.

    The structure of the modern megalopolis is not an accident – the dramatic rise of tech employment, two-earner families, the decline of manufacturing, the later date of marriage, smaller households, lifestyle consumerism, teamwork cultures, serial re-education and training – none of these societal trends looks to be diminished by COVID-19. All of them seem to prefer high-density, high-interaction environments.

    For those of us in Toronto, it’s also important to remember just how quickly this city region was growing pre-COVID-19. That is unlikely to change on the other side of this.

    But Berridge does also point out some of the potential fallouts from this pandemic. The economics of urban transit, for example, could remain a problem for quite some time. This will strain public purses. (Car usage rebounded quickly, but transit ridership has not.)

    We are also likely to see increased traffic congestion as a result of people eschewing transit (and probably a bunch of other factors). Like Berridge, I am a supporter of road/congestion pricing, and have been writing about that on this blog for many years.

    The best things to tax/price are things that are generally viewed as bad and where demand is largely inelastic. That is, even if you increase the price, many or most people will probably still do it anyway. Think of things like smoking.

    Up until now, Toronto hasn’t had the moxie to make difficult (political) decisions like this one. Perhaps this pandemic will leave us no other choice.

  • What is it that I believe?

    Back in 2008, I was living in the United States. And at that time, during the financial crisis, I remember people positing that the US wouldn’t be able to build another commercial office building for at least the next twenty years. That’s how bad things felt. People were panicking. But of course, that never happened. Yes, it took some time for real estate values to recover and for people to deleverage, but ultimately things did recover. New buildings were built and new ideas flourished.

    In fact, I’ll never forget what a close friend of mine said to me a few years after that moment in 2008. He said to me, “you know what Brandon, the crisis was probably one of the best things to happen to me. It meant that I couldn’t find a job and I was forced to start my own company. I probably wouldn’t have done that otherwise.”

    Today, we’re living through a different kind of crisis with its own set of uncertainties. Some, or perhaps many, seem to think it could lead to the demise of cities, similar to how our last crisis was supposed to lead to the demise of new office buildings (at least for a period of time). It’s easy to get caught up in narratives and headlines at times like this. And there are always ways to convince ourselves that this time might be different. Sure, we’ve had pandemics before, but previous generations didn’t have the tech that we have, right? Perhaps.

    The challenge is that we’re all trying to decode how much of what’s happening today is related to (1) short-term dislocation, (2) trends that were already happening and just got accelerated, or (3) durable and long-term structural changes. My own view is that the post-mortems will reveal more of (1) and (2), as opposed to (3). And that will mean that some of us have maybe been making long-term decisions (flee the city) based on short-term dislocation (a 1-2 year health crisis).

    Of course, I could be wrong. But it’s what I believe and what I have conviction around.

    Headlines are designed to target what Seth Godin and others refer to as our “lizard brain.” That being the primitive part of our brain that tells us when we’re, among other things, scared, hungry, fearful, and horny. What excites the lizard brain is not a headline saying that everything will probably be just fine. What excites the lizard brain is a headline saying that everything is utterly broken and a new paradigm is now upon us — pay attention or perish.

    It’s for this reason that I think it can be helpful to pause and ask yourself: “What is it that I truly believe?”

  • Pandemic-era hand sanitizer

    I have been trying (albeit not very hard) to come up with the best way to describe the stinky hand sanitizer that is going around these days. Then today somebody in the office described it as bad tequila and I immediately thought, “yup, that’s exactly it. It’s bad tequila.” See above tweet.

    Turns out, there’s some science behind this stink. Here is an article by Gregory Han from the New York Times that was shared in response to my tweet. And here is the excerpt that explains where this stink comes from:

    “That off-putting smell—sometimes described as rotten garbage or tequila-like—is the natural byproduct of ethanol being made from corn, sugar cane, beets, and other organic sources,” explained Zlotnik. “[Ethyl alcohol] production is highly regulated. It stinks because these new brands—many made by distillers who’ve pivoted from producing drinking alcohol to meet public demand for hand sanitizer—are making and using denatured ethanol. This ethanol costs significantly less than ethanol filtered using activated carbon filtration, which would typically remove almost all contaminants and the malodor with it.”

    Those organic contaminants aren’t the only reason unfiltered and denatured ethanol smells downright foul. According to Zlotnik, denatured ethanol is also intentionally tainted with an unpalatable cocktail of chemicals (denaturants) such as methanol, acetone, methyl ethyl ketone, and denatonium to make it undrinkable. In other words: The base material is intentionally stinky.

    So now you can judge accordingly after you’ve cleansed your hands with rotten garbage tequila.

    On a somewhat related note, Jill Lepore has an interesting piece in this week’s New Yorker about the great indoors, and how quarantine has forced us to spend even more of our time indoors. (Though, that hasn’t been the case for me this summer.) Here’s a snippet:

    The Great Confinement varies by place and by wealth, and, historically, it’s new. “Over several millennia, humans have evolved from an outdoor species into an indoor one,” Allen and Macomber write. Citing E. O. Wilson, they explain, “We evolved in the African savannah’s wide-open expanses, intimate with nature and seeking protection under tree canopies,” and so “our genetic hardwiring, built over millennia, still craves that connection to nature.” To satisfy this craving, photographs of redwoods adorn hospital waiting rooms; you can pop into the Grand Canyon via Zoom. I used to think these dodges were better than nothing, but I’ve changed my mind. Zoom is usually not better than nothing.

  • Home listings are up 96% in San Francisco

    A recent market report from Zillow has found that urban and suburban housing markets in the US haven’t actually diverged all that much as a result of this pandemic. Despite what you might be reading in the news, Zillow’s national listing data does not seem to suggest that an urban exodus might be underway. Suburban and rural home listings are seeing about the same attention (views) as they were last year. And the rates of appreciation seem to be holding. As of June, annual home value growth was 4.3% for urban areas and 4.1% for suburban areas.

    There are, however, some exceptions and local nuances. Rents in urban zip codes have fallen more compared to their suburban counterparts. This seems to make intuitive sense given that I would have expected demand to be less from young professionals, students, and immigrants. Many cities probably also saw a bunch of their short-term rental inventory flip over to the long-term rental market (how much, I don’t know). But my view is that this will prove to be a short-term phenomenon.

    There are also some markets that have performed quite differently. San Francisco is one of those cases. The city proper has seen home prices fall 4.9% and inventory (listings) increase by 96% year-over-year. This is a massive outlier. If I were to speculate as to why this is the case, it would be that (1) this was brewing even before COVID-19 and (2) the tech community is perhaps more convinced of this whole working from home thing. Why remain in expensive San Francisco? It’ll be interesting to see how this plays out. For a full copy of Zillow’s urban-suburban market report, click here.

    Image: Zillow

  • The many forces shaping our cities

    Richard Florida has a three-part essay over on Bloomberg CityLab about the forces that are currently shaping American cities. In part three, he argues that this pandemic will likely accelerate many of the trends that were already underway — families will continue to like the suburbs and young people and businesses will continue to cluster in dominant global cities. At the same time, he argues that we will see a kind of “urban reset.” A window of opportunity where we just might be able to rebuild our cities to be more affordable, more inclusive, and more productive. Could this be the moment where we commit to transforming our suburbs into more walkable mixed-use communities? Could this crisis actually strengthen our cities, as I have argued before on the blog? At this point in time, the only thing I really know for sure is that most of our predictions will be wrong.

  • Sidewalk Labs, Uber, Lime, and the demise of urban density

    Today I am going to talk about 3 things that recently happened and/or that are on my mind.

    Sidewalk Labs pulled out of Toronto. I think this is sad. A lot of people have said that they’re surprised, but not surprised. The official reason is that this unprecedented environment has made it financially infeasible for them to develop the 12-acre site, while still adhering to their core principles. I don’t have any inside knowledge of the situation, but I can’t help but think that this is probably just an opportune excuse. They were getting beat up pretty badly by Toronto on all fronts, even though they had put forward an incredibly ambitious development proposal. As I said before, I can’t imagine many (or any) “conventional” developers coming forward with something like this. The last plan I saw was 1/3 non-residential, and 40% of the residential component was to be priced below market. And never mind all of the other innovations that were being contemplated.

    In other tech news, Uber just led a $170 million investment in Lime (the micromobility scooter company). I think this is smart — both from an overall mobility standpoint and, selfishly, as a shareowner of $UBER. It is being reported that this round of investment values Lime at about $510 million. This is a 79% decline from April 2019 when it raised its last round. So presumably, Uber is getting a pretty good deal here. The bet is that the urban landscape demands multi-modal transportation solutions, everything from bikes and scooters to cars and public transit. There is also an argument to be made that in the short-term, our post-pandemic world is going to gravitate toward individual mobility and away from things like public transit. I’ve heard a few people say that, as we re-open the global economy and try to maintain social distancing, we’re going to face two major mobility bottlenecks: transit and elevators. Sounds like more testing would be a prudent idea.

    Above, I was very careful to say “in the short-term” because I think the narrative that is emerging around the demise of urban density is entirely overblown. Few of us are clamoring to jump back into a mosh pit right now (perhaps a metaphorical mosh pit), but I also don’t believe that we will suddenly look to sprawling Brasilia as a source of urban inspiration. While it is true that “disease did shape architecture in the 20th century” (Alex Bozikovic wrote a good piece on this over the weekend) and that there have been oscillations in terms of how we view urbanity, I also know that this isn’t the first pandemic that our cities have lived through. The Hong Kong flu of 1968 is thought to have killed one million people around the world after, allegedly, emerging in one of the densest cities ever created. Hong Kong’s relationship with Beijing is a tenuous one right now, but it still remains one of the world’s most important global cities.

    Perhaps cities are more resilient than we give them credit for.

    Photo by Touann Gatouillat Vergos on Unsplash