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.
If you were a city-state only slightly larger in area than the City of Toronto, you would think about space very differently. There would be no option to just sprawl further out. And that is the case for Singapore, which is approximately 734 km2 compared to Toronto’s 630 km2.
So it’s no wonder that Singapore carefully manages how people use and own cars. Not only were they the first country in the world to implement a congestion charge (road pricing), but they also force people to buy 10-year “Certificates of Entitlement” in order to own one.
These are auctioned off every 2 weeks and the overall supply of them is controlled by the government.
Currently, the starting price for a COE is S$104,000 (roughly the same in Canadian dollars). This is a record high and up nearly 3x compared to 2020 when fewer people wanted to own a car. However, if you’d like a COE that works on all sizes of cars, that is right now S$152,000.
It’s hard to imagine a system like this ever flying in a large country like Canada. But if Canada were the size of just Toronto, you can be sure that we would likely have no other choice. That said, this is more or less how we treat new housing: we’ve made it difficult and expensive for new entrants.
As an add-on to yesterday’s post about ground floor retail in mixed-use developments, I thought I would provide a few illustrative and real-world examples to demonstrate some of the challenges that I was trying to describe.
Note that this post is not meant to be critical of any specific projects; instead, it’s intended to further explain some of the challenges facing developers, architects, policy makers, and everyone else involved in the built environment.
Let’s start in Toronto. Below is an aerial photo of Ossington Avenue. For those of you who aren’t familiar, this is one of the most desirable and coolest main streets in city. I mean, check out this recently completed office/retail building at 12 Ossington by Hullmark.
However, when the above townhouse complex was built (circa 2005), Ossington was not the street that it is today. In fact, it used to be pretty scuzzy. When I moved to the US for grad school in 2006, I don’t recall anyone going out on Ossington. Then when I returned in 2009, suddenly, everyone was going to restaurants and bars on Ossington.
So when this project was being planned, residential directly on the street, was probably the highest-and-best use, which is why that’s what was built. But looking at it today, it feels like a suboptimal outcome for one of the most desirable retail streets in the city. And now that it has been built, it’s unlikely to change anytime soon. Should retail have been mandated?
Here is another example from Toronto. This is the north side of High Park. In this case, the street (Bloor Street) is not a great retail street. It’s single-sided because of the park. There’s only a scattering of restaurants and small businesses. There are a lot of single-use buildings. And even some of the newish developments don’t have any ground floor retail.
In this particular instance, it’s certainly more of a stretch to force retail. But at the same time, I think there’s an argument to be made that the edges of Toronto’s primary urban park should do more. The buildings should be taller. The street walls should be more defined. And yes, maybe there should be more retail.
Now here’s a counter example from Paris:
This is the 7th and there’s absolutely no ground floor retail in sight and pretty much only blank and non-active facades. It’s hard to imagine retail opening up here today or anytime in the future — and that’s okay. The streets are still narrow and walkable. And the buildings are just what you’d expect from the capital. The point here: ground floor retail can’t and doesn’t need to go everywhere.
Finally, let’s return to Salt Lake City:
This is maybe the antithesis of our Paris example. 300 W is a wide street clearly designed for Toyota 4Runners. It’s hard to imagine a lot of people walking around here. Even though it’s relatively close to the central business district and it’s on the edge of the emerging and very cool Granary District. (This is The Post District.) But you know what, retail seems to work just fine here:
You just need to think about it in the right way. SLC’s wide streets and large blocks may not make for a broadly walkable environment. But they do give you the room to create your own internal street network and, of course, build a bunch of parking. And that’s what was done and needed here.
I also find it interesting to think at this sub-block level and consider how it might become a new network and layer to the city over time. Maybe Salt Lake needs its own version of Barcelona’s superblocks. And maybe this has already been considered.
So once again, ground floor retail is good. Everyone wants that cool coffee shop in the bottom of their building. But sometimes we miss the boat. Sometimes it’s unclear what we should do. Sometimes it’s not necessary or viable. And sometimes we get it just right. That’s, I guess, retail.
I was in Toronto’s Kensington Market over the weekend and so naturally I decided to tweet out a glib remark about how the neighborhood should be mostly pedestrianized. This, as many of you know, has been an ongoing debate in this city for as long as I can remember. But there are, in fact, things happening. Watermain replacements are scheduled for the area in 2024 and 2025 and so the city is rightly using this as an opportunity to rethink the area’s streets. Here’s the official website for the project. Here’s the staff report that was adopted. And here’s what design changes are right now being proposed.
One of the things that you’ll find in these documents are answers to the following question: “How supportive are you of the proposed design for the Pedestrian-only Zones?” And the results are pretty interesting. When the question was proposed to all respondents (the total number being 1,165), 90% were either very supportive or supportive of the Pedestrian-only Zones. And when narrowed to “visitors” of the area, the number appears to increase to 94% supportive. However, when this same question was asked to “people who live/work/own within the affected streets” the number drops to 55% supportive, with 28% being “very unsupportive” of the idea.
One of the concerns with pedestrianization is that it could make it difficult for businesses to operate in the market. This is an understandable concern. But in my lay opinion, this is a problem that has already been solved in many other cities around the world. Delivery vehicles would still be allowed to load/deliver, and you control their flow through things like mechanical bollards. The other concerns raised by community seem to suggest something different. They seem to suggest that pedestrianization might make the area too desirable. More specifically, it might “accelerate gentrification” and cause “traffic and other issues in the neighborhood.” I’m assuming the traffic being referred to here is non-vehicular, because we are, after all, talking about pedestrianization.
This dichotomy is an interesting one. On the one hand you have visitors and customers who overwhelmingly want the area to be pedestrianized or, at the very least, have pedestrian-only zones. But on the other hand, the businesses themselves seem to be concerned about their operations and the area becoming too successful. On some level, I guess, this makes sense, if your concern is displacement and/or the area becoming too corporate or whatever. But it’s also counterintuitive. Usually when you run a retail-oriented business you like things that (1) make your customers happy and (2) drive foot traffic.
So how do we go about reconciling this city building divide? Well, like many/most urban initiatives these days, you run a pilot! And that’s exactly what the city plans to do. There will be more consultation sometime next year, and then construction is planned for 2024-2025. Once that wraps up, the plan is to test out the various pedestrian-only zones. So I reckon we could be 2026 before we truly know where this is landing. I remain optimistic. But until then, please continue to refer to my glib weekend tweets.
One of the small things that I found really interesting in this week’s class — besides, of course, figuring out how the hell to use le subjonctif — was the expression “en province.” In France, this effectively refers to any place in the country that isn’t Paris — the capital city/region. And it turns out that many other countries employ a similar kind of vocabulary.
According to Wikipedia, people in Peru say “en provincias”, people in Mexico say “la provincia”, people in Poland say “prowincjonalny”, and people in Bulgaria say “в провинцията”, whatever that means. What is fascinating to me about this is that it implies a very capital and urban-centric mentality. You’re either in the capital city or you’re, well, in the provinces.
It’s also not something that is used in either Canada or the US. In Toronto, you’ll hear people say that someone is “up north” and, in Philly, you’ll hear people say “down the shore” to indicate that they’re headed in the general vicinity of the east coast. But as far as I’m aware, there isn’t a specific term that is used to describe any and all lands that exist outside of our capital cities.
Maybe it’s because Ottawa isn’t our biggest city and so it would be silly to designate everything outside of it as being some sort of provincial non-capital territory. But I wonder if part of it is because we don’t have the same urban-centric mentality. Could it be that we just don’t value and think about our principal cities in the same way?
I grew up going to a French school. For a significant portion of my early education, I had every single class — except English class — in French. But to be honest, I never really loved it. I had started midway through elementary school and so I always felt like my French was never quite good enough.
I was behind relative to my classmates. I needed special tutoring to get caught up (while my classmates were off learning a third language). And so I used to constantly beg my mom to take me out of French school and put me in a, you know, regular English school. I know this was tough for my mom, but her response was always steadfast: “You’ll thank me when you’re older.”
At the time, I couldn’t possibly imagine her ever being correct with this statement. But it turns out, she was. Today, I’m grateful to be able to travel to a place like Paris and kind of speak the language. (I say kind of because, hey, it’s been a long time since high school!)
And I’m grateful that when I go into Mabel’s Bakery across from Junction House that I can order a coffee and a croissant in French. (Most of the people there are from France. Try it for yourself. They’re lovely humans.)
In fact, I enjoy it so much that I recently decided to enroll in a French class at Alliance Française here in Toronto. (Fresh $80 textbook pictured above.) Obviously the 9-year-old version of myself would be completely shocked with this absurd decision. But I guess this is just what happens when you’ve been indoctrinated from a young age.
Or maybe I just really want to build something in France one day.
Today, one of the top landscape architects in Canada — Claude Cormier — died from complications associated with something known as Li-Fraumeni Syndrome. He was only 63.
Claude, and the firm he founded CCxA, have been responsible for some of the most beautiful, whimsical, and critically acclaimed public spaces in Canada.
Those of you familiar with Toronto will know Berczy Park, Sugar Beach (pictured above), the new Love Park, and others. These are easily some of the most successful public spaces in the city, and for good reason.
CCxA is also the landscape firm behind our 100 Lombard project, where we have been similarly working to create a new and whimsical public space in downtown Toronto.
We’re all sorry to see you go, Claude. Canada is a better — and more fun place — because of your work.
For next year’s budget (2024), the City of Toronto is projecting a $1.5 – $1.7 billion budget shortfall. And over the next 10 years, this shortfall is expected to grow to nearly $47 billion if changes aren’t made. This is according to a recent report prepared by Ernst & Young and Strategy Corp. So right now, all of this is being looked at and debated by Council.
Where are we going to get this money?
One persistent debate is whether the city actually has a revenue problem, or whether it’s simply an expense/spending problem. I can’t say that I’ve scrutinized the city’s expenses at any length, so I’m not going to get into that level of detail today. For this post, I’d like to focus on two specific things. The first is property taxes.
Here is a figure, from the report, showing residential property tax rates across southern Ontario:
What you will see is that Toronto has the lowest rate of the 35 municipalities that they looked at. Now obviously there are some nuances to consider. The average home price in Toronto is higher than it is in, say, Sault St. Marie. Toronto also has a large commercial property tax base. But even still, historically speaking, Toronto has tended to increase its residential property taxes at or below the rate of inflation.
This is a problem. And it is the exact same problem that we have talked about on this blog in regards to residential rent controls. If you own an apartment building where the rents are capped and your expenses are, therefore, growing faster than your revenue, you are (1) highly incentivized not to invest in the apartment (you can’t afford to) and (2) eventually going to hit a financial wall.
Sound familiar? As far as I can tell, that is, at least partially, what is happening here.
Secondly, one of the first things that I did when I opened the report was run a search for “road tolls” and “congestion charges”. Regular readers of this blog will know that this is something I feel strongly about. Here’s what I found:
In 2017, when the City considered implementation of tolls for the Gardiner and the DVP, staff estimated that a $2-per-trip toll would generate $5.6 billion in 10 years. The province has refused several requests to consider these options, with the Minister of Transportation rejecting any discussion of uploading or tolling as recently as December 2022.
This is also a problem. One of the general rules with taxes is that you should ideally tax the things you want less of. Hmm. So why not tax traffic congestion? There is no question that it works. There’s lots of evidence from all around the world. We just lack the political will to actually do it. Instead, we pay lip service with solutions that don’t work.
At the same time, if we were to actually implement road pricing, I don’t believe that a flat toll is the way to go. $2 also seems low. The best practice is dynamic road pricing that fluctuates based on actual congestion levels. Meaning, if you’re driving at 5am, expect a low rate. And if you’re driving at 5pm, expect a high rate.
Virtually overnight, we know this would do at least three things: (1) it would reduce/eliminate traffic congestion (congestion levels would become a function of pricing); (2) it would reduce overall carbon emissions in the city; and (3) it would take a meaningful chunk out of this $47 billion budget shortfall.
This past week, New York City enacted a new short-term rental registration law that is not very friendly toward platforms like Airbnb and VRBO. Here are some of the new rules:
All hosts must register with the city
No more than 2 paying guests can stay in a short-term rental at one time, regardless of the size of the home (does this mean families are excluded?)
Hosts and visitors must leave all doors inside the dwelling unlocked (presumably this is to stop people from creating self-contained suites within a larger home)
And the host must be physically present while the dwelling is being rented
So in a way, this takes us back to the original use case of Airbnb: “Hey, I have extra space in my home. Would you like to rent this mostly clean air mattress in my living room and be my roommate for a bit?” Of course, this is not how most people like to Airbnb today. And so this is also a kind of ban on short-term rentals in New York City.
It’s certainly stricter than the regulations we have in Toronto. Here, it must be your principal residence. Meaning you’re only legally allowed to operate one short-term rental at a time. But you don’t need to be physically present while the home is being rented. If you want to earn some extra cash while you’re away in Rio de Janeiro for New Year’s Eve, you can do that.
However, the rules are still fairly strict. For instance, if you have a basement apartment or a laneway suite on your property, you are not technically permitted to short-term rent these dwellings, even if you live in the main portion of the home. It has to be your exact principal residence.
Presumably the intent behind this is to not remove any housing from the long-term rental market. And if it’s your principal residence, then yeah, there’s no net loss. Though this feels like an overreach to me. It’s the same property and a homeowner could very easily decide to not even do a long-term rental in these secondary suites.
But overall, I guess it’s still slightly more flexible than forcing hostel-like short-term rentals. Long live the hotel?
Back when everyone wanted to buy and trade crypto, my friend Evgeny started a marketplace for NFT photography called Sloika. This, to me, felt like an obviously good idea, both in general and for him specifically. Evgeny had previously cofounded the photo company 500px, and so Sloika was initially conceived of as 500px, but for web3. This is a good story.
I have collected a number of photos via Sloika and, in general, I continue to regularly collect NFTs. Of course today, relatively few people want to trade and collect NFTs. The market is largely dead. What is obvious is that there was a giant NFT bubble and it popped in 2022, along with some other asset bubbles.
But does this necessarily mean that NFTs and NFT art are bad ideas?
When I think of bubbles I often think of something that Fred Wilson wrote on his blog. His argument was that bubbles tend to be directionally right; it’s the magnitude that we get wrong. A good example of this is the dot com bubble. Yes, it was a massive bubble. But it was directionally right. The internet was going to matter — a lot it turns out.
Even if we go back to “tulip mania” during the Dutch Golden Age — which is often brought up as the pinnacle of dumb bubbles — one could argue that it was still directionally right. Today, tulips remain the most sold flower in the US. So we still love them; we just got a little too excited back in the 17the century.
When it comes to NFT art, I like to think in terms of these questions:
Will humans continue to appreciate art? (Seems obvious.)
Will humans continue to want to collect things? (This is arguably a fundamental human instinct.)
Will provenance and authenticity continue to matter in art? (Blockchain technologies are really good at this.)
Perhaps the only question that remains is whether people will want to collect digital art. But even this feels fairly obvious to me. The challenge, I think, is that the display side of the market needs to be more built out. Because alongside the instinct to collect things is the instinct to display them. That’s why NFTs initially took off as profile pics on social media.
So as a start, I think more, better, and cheaper displays would be a big help. There’s something very different about projecting an NFT in your living room versus having it live in a crypto wallet on your phone or computer. You need to really experience it, just as you would a conventional piece of art. And like all art, context matters.
I haven’t yet invested in a dedicated NFT display, but I plan to do that in the near future. And I’m looking forward to displaying my collection of NFTs, including the one at the top of this post. It’s a drone shot of the west side of Toronto in the middle of winter, and it was gifted to me by Evgeny. Thank you for that. It’s an honor to have it as part of my art collection.
Part 3 (includes Toronto, Vancouver, and Newfoundland)
The videos are by dialect coach Erik Singer and, I must say, his ability to fluidly move through all of North America’s accents is incredibly impressive. As I was watching the videos, I kept thinking to myself, “I don’t know what this guy actually sounds like when he’s not putting on an accent.”
The interesting thing about accents is that they really speak to settlement and migration patterns. In other words, who came in contact with who, and who didn’t come in contact with others? Geographic isolation also leads to unique accents.
The other ingredient is time. The reason the UK, for example, has so any regional accents is that it had the time for them to develop. On the other hand, if you look to most of the southwestern United States, there is broadly a kind of generic American accent (with the exception of some California and Utah nuances according to Erik). This is because these settlements are relatively young compared to say the northeastern US.
For Canada, the defining feature is “Canadian raising“. It is what leads to the stereotype of us saying things like “aboot” and “hoose”. It doesn’t sound exactly like this, but there is a way in which we tend to pronounce diphthongs (two adjacent vowel sounds) with open-vowel starting points.
Open-vowels are sounds where our tongue is positioned as far as possible from the roof of our mouth. If you try saying “about” to yourself out loud right now you’ll notice that this is what happens. Your tongue drops. And it is these instances that lead to “Canadian raising”.
The other thing that I find fascinating is how quickly language convergence can happen. I lived in Philadelphia for 3 years (for grad school) and when I would come home my parents used to tell me that I sounded fully American. I guess subconsciously we feel a need to assimilate.
If you’re also fascinated by accents, I highly recommend you check out Erik’s videos.
