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: san francisco

  • The Canadian Dream

    This has become a frequently reported topic, but here’s a recent article from Wired talking about tech workers living out the American Dream — in Canada. The story is pretty simple. Immigrants are smart and work hard. Canada has a system in place that privileges newcomers who are young and smart. And this has become a boon for our largest city and for the country. Here are two excerpts from the article:

    But there’s a new global winner: Canada, and particularly Toronto. Since 2013, the tech scene there has grown faster than in any other North American city. In 2017, Toronto added more tech jobs than Seattle, the San Francisco Bay Area, and Washington, DC, combined; in 2018 (the most recent year for which numbers are available), the city was second only to the Bay Area in new tech jobs. Toronto is so crammed with immigrants that nearly 50 percent of all residents were born outside the country.

    Canada’s immigration policy is hardly warm and fuzzy. On the contrary, it’s icily calculating. The government loves educated, elite newcomers, because they help propel the economy, says immigration lawyer Peter Rekai, but it wants them young, so they won’t drain the public health care system. Their parents are much less welcome.

    In the first quarter of this year, international migration accounted for 82.3% of Canada’s population growth. And at the beginning of this year, Ottawa was planning for up to 370,000 new permanent residents. It is highly unlikely that we hit that number given our current health crisis, but I have no doubts in my mind that we will hit it in the very near term. And when we do, it will be a good thing for Toronto.

  • 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

  • Job mixes and job losses

    Recent job posting data from Indeed has revealed a bit of a paradox. The metro areas where more people are able to work from home — i.e. tech hubs and finance centers — have experienced larger job posting declines compared to all other US metros, as well as to tourism destinations such as Las Vegas and Orlando.

    We know that the hospitality and tourism sector has been the hardest hit by the current environment. But that doesn’t appear to be the biggest driver for overall job losses. In fact, one of the key takeaways is that job losses between February and June 2020 look to be correlated with metro size. That is, the bigger the city, the greater the job losses (% change).

    So what’s going on?

    Well, according to Indeed, it’s important to look at the local job mix. In “work-from-home metros” like Seattle, San Francisco, and Boston, there has been a relatively high percentage of people who were able to quickly transition to working from home. This is reflected in the anonymized mobile-device data for these cities. More people at home. Less mobility. And a seemingly stronger adherence to social-distancing protocols.

    The problem with this outcome is that it crushes most of the in-person sectors and businesses that relied on this workforce moving about the city — things like food prep and beauty & wellness. I mean, just think about all of the food businesses that survive off lunches in a CBD. According to Indeed, it is these sorts of local economic connections that have really been driving the declines in job postings and overall payroll employment during lockdown.

  • Housing supply in the Bay Area


    Back in March, SPUR Regional Strategy published a report called: “What It Will Really Take to Create an Affordable Bay Area.” Much of its focus is on all of the housing that the San Francisco Bay Area should have been building over the years and all of the housing that it will need to start building in order to prevent things from getting worse.

    Here are a few stats to put things into perspective. Since 2000, the Bay Area has added about 1 million people (about a 15% increase). From 2011 to 2017, the Bay Area also added some 658,000 jobs, but only created about 140,000 new housing units. That’s 4.7 jobs for every new house built. SPUR further estimates that over the last 20 years, there has been a shortfall of almost 700,000 new housing units.

    If you look at the above chart showing residential building permits issued between 1980 and 2018, you can see that the Bay Area was actually more prolific in the 1980s — peaking at nearly 50,000 units per year. Those levels have yet to happen again, despite the region growing in population. (If you looked at new housing units per capita or some other normalized metric, the supply decline would be even more pronounced.)

    Part of the reason for this is that the supply of housing in the 1980s had a higher percentage of low-rise single-family homes. We could get into a discussion about sustainability, but that’s not the topic of today’s post. The reality is that this housing typology was easier, faster, and cheaper to build as compared to today’s urban infill housing. We have made it very difficult to build.

    To download a copy of the SPUR report, click here.

  • The dazzling Mira tower

    I have said this before on the blog, but one of my favorite tall buildings is the Mira tower in San Francisco by Tishman Speyer (developer) and Studio Gang (architect). Now that it’s pretty much complete and residents have started to move in, John King, urban design critic for the SF Chronicle, has published this review of the building. It’s behind a paywall, but you should be able to at least see all of the photos, and below is an introductory excerpt.

    Even with today’s grim need for social isolation, San Francisco’s most eye-catching residential tower wants to pull you close.

    From the Bay Bridge or the Embarcadero, the 39-story Mira at the corner of Folsom and Spear streets is a flowing stack of tightly wound white metal bays, frozen in motion. Fragmentary glimpses from nearby blocks defy expectations, whipsawed slivers amid the stodgy norm.

    Finally, there’s the view straight up from the sidewalk — a crisp commotion of stacked angles, precisely arranged but seemingly ready to fly out in a dozen directions at once.

    Though Mira has been in the works since 2014, the architectural show still feels fresh as the first residents begin to unpack. But this 392-unit residential complex was also conceived as a celebration of triumphant urbanism — a far cry from the mood of this troubled summer.

  • The America we need

    The New York Times is running an opinion series right now called, The America We Need. It is all about how the US might emerge from this crisis “with a fair, resilient society.” This piece by Carol Galante covers many of the topics that we discuss on this blog. Carol is a former city planner and nonprofit housing developer. She is now the faculty director of the Terner Center for Housing Innovation at UC, Berkeley. Here are a couple of excerpts from her article that I think will resonate with many of you:

    There are two things we know: The U.S. economy will recover. And the recovery will start in and be strongest in the same cities that were thriving before the pandemic. Economies in places like Seattle, San Francisco, New York and Boston are driven by the innovation, technology and biotech sectors, which are proving to be remarkably resilient to the impacts of Covid-19.

    We have an obligation to ignore the short-term reactionary impulse to blame density for the spread of the coronavirus and instead use this opportunity to rethink the policies that impede the construction of new housing, at more price levels, in the places where housing is most needed.

    In my subsequent career as a nonprofit housing developer working in prosperous coastal California communities, I spent far too many nights in City Council meetings working to get apartment buildings for lower-income older people and families approved. Underlying the “density” battle was almost always a battle over who has access to the opportunities of a place and who doesn’t, cloaked in arguments about neighborhood character and traffic impacts.

  • Moovit Public Transit Index

    The Moovit Public Transit Index has been tracking the impact of COVID-19 on public transit usage around the world. Not surprisingly, people are using transit a lot less.

    Above is a chart from Moovit showing usage from January 15, 2020 to April 12, 2020, for a collection of US cities including San Francisco, Chicago, New York, Philadelphia, Seattle, and others. Early March is when usage started to really fall off, with most of the cities now sitting somewhere around 70-75% below January levels.

    For the most part, the cities included in this chart have followed a similar trajectory. But there are a couple of outliers. Philadelphia doesn’t seem to have fallen quite as much as other major US cities (-55.7% as of April 12, 2020). I’m not sure why. San Francisco looks to have “corrected” a lot faster. Perhaps because of an easier/quicker shift to working from home? And then there’s Seattle.

    The first confirmed US case of COVID-19 occurred in the Seattle area on January 21, 2020. Looking at the above chart (and implying causation), that single case appears to have had an immediate impact on transit usage. Over the subsequent three days, ridership dropped to -4%, -8.3% and then to -9.1%. Usage then remained consistently lower relative to all of the other cities in this index.

    Was that it? Did Seattleite’s behaviors really change that quickly? (And yes, I did have to look up the demonym for the fine people of Seattle.)

  • Studio Gang: Architecture

    Phaidon — publisher of books on art, design, architecture, food, and fashion — has a new publication coming out this summer called, Studio Gang: Architecture. They are describing it as: “An in-depth exploration of one of the most important, innovative, and creative architecture practices working today.” As most of you know, we are working with Studio Gang on an important project in midtown Toronto. And so we are of course thrilled to see the firm’s work being celebrated. To pre-order a copy of the book, click here. They are supposed to start shipping around mid-May.

  • Nurx announces home testing kit

    I have been debating whether I should continue writing about what is already on all of our minds, or if I should focus my attention on positivity and humor. The latter is hugely important at a time like this, which is why I have been trying to intersperse my thoughts, both here and on Twitter, with things like funny videos, dance music, and architecture.

    But the reality is that none of us know how this is all going to play out. As I mentioned yesterday, very few of us have a mental model for this kind of macro event. So it’s important for all of us to continue learning. Is our country taking the right approach? Are we doing enough? How long are we going to have to live like this and what does that mean for the global economy?

    The Financial Times published an invaluable story earlier this week about a small town outside of Venice called, Vò. With only 3,300 people, the town was supposedly able to test and retest all of its residents while the rest of northern Italy was growing as an epicenter for the Wuhan virus.

    In late February, they completed their first round of testing and found that about 3% of the town had been infected. But it’s important to note that about 50% of those that were infected were completely asymptomatic! However, because everyone was tested, the asymptomatic people got immediately quarantined.

    The town did a second round of testing about 10 days later and that point the infection rate had dropped to about 0.3%. Of course, if all those asymptomatic people had been out and about in the town of Vò, this would not have been the case. There now appears to be no new cases in Vò.

    It is for this reason that the WHO is urging diligent and repeated testing. But that obviously needs to be done in a sensible way. Having people line up — together — for hours upon hours is an obvious problem. Most people are not getting tested.

    Earlier this morning, San Francisco-based Nurx announced a home testing kit for the Wuhan virus. Supposedly it is the first of its kind in the US. (It’s not yet available in Canada — I asked). I don’t know how available it is to Americans or how accurate it is, yet, but I do know that something like this needs to become widespread.

  • A dumpster fire in San Francisco

    This past week, San Francisco’s Proposition E was approved by 55% of voters. The measure works by limiting new office development if (or when) the city falls short of its affordable housing target for the year.

    If the city only builds 25% of its housing target (currently set at 2,042 affordable units per year), then only 25% of its annual allocation of office space can be built the following year. (I just learned that large scale office development in San Francisco has been limited to 875,000 sf per year as a result of a Proposition dating back to 1986.)

    San Francisco currently skews heavily in favor of jobs. The city creates about 8.5 jobs for every unit of new housing. And over the last decade, SF has only averaged about 712 affordable housing units per year and has never once met its target.

    So at the moment, San Francisco looks destined to start building a lot less office space. And considering that new office space actually helps to fund affordable housing, I am struggling to understand why the goal seems to be to constrain job growth.

    California State Senator Scott Wiener called Prop E a dumpster fire:

    Call me old fashioned, but I tend to think that if the goal is to build more affordable housing, you should do things that, you know, encourage the actual construction of affordable housing.

    Photo by Eduardo Santos on Unsplash