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.
The desire to add more housing to single-family neighborhoods will continue to pick up steam across North America. How exactly this plays out will be market specific, but in Toronto I expect to see new planning policies put in place, as well as supportive building code changes.
And this continues to happen. Right now, the City of Toronto is working on making fourplexes permissible in all low-rise neighborhoods across the city.
This is exciting. But it’s not done yet. And it’s not perfect.
The biggest change that I think still needs to happen is around maximum densities. If we actually want to encourage more missing middle housing, we need to increase the permitted FSIs or, better yet, remove them all together.
Urban planner Sean Galbraith does a good job of explaining this in NRU:
I responded to the city’s multiplex survey last night and this was one of my main comments. If you’d also like to voice your opinion, you have until March 10, 2023. Here’s the link.
As I mentioned yesterday, I am not a structural engineer. However, my friend James Cranford is. He is Principal at Stephenson Engineering and he was nice enough to answer a few of my questions about soft story buildings (storey if you’re Canadian).
BD: What is a soft (or weak) storey building? And why is it such an important design challenge, even in a very un-seismic city like Toronto?
JC: A soft storey refers to any level in a building that has LESS capacity than the level above. This means it has both less strength to resist loads and less stiffness so that it will move more than the levels above. Soft stories are one of the most significant challenges that many modern building designers face because they are one of the most likely ways that a building can fail catastrophically if not properly designed. A soft storey failure occurs when the building hinges above the weak level and the columns below can no longer support the load of the building above as they become overstressed and loaded in ways they were never meant to act. This leads to a sudden, often pancake type collapse that is likely to bring down the entire building.
We see potential soft storey issues most commonly in mid to high-rise residential buildings that have either amenity or retail spaces at the ground floor. These are spaces that by nature are large and as open as possible. During design, the structural engineer needs to recognize this and compensate for the lost capacity in other ways. This is usually done through a combination of increasing the capacity of the remaining walls and adding new walls at the weak level that fit with the building layouts.
BD: What does the Ontario Building Code mandate in terms of soft storeys?
JC: The OBC generally does not permit soft stories in any form for buildings where people are likely to live, work or play. In critical infrastructure like hospitals which must remain fully functional in the event of a major earthquake, the OBC goes further and does not permit any ‘lateral force resisting elements’ like shear walls or steel frames to be discontinuous below. This means that if you have a wall on the 5th floor of a hospital, that wall must exist with equal or greater capacity on EVERY level below, without exception.
BD: How much more stringent is British Columbia, where there is greater seismic risk?
JC: The requirements in the British Columbia Building Code (BCBC) are almost identical to those in Ontario in this case. However, the seismic design forces will be much higher based on the potential for much larger earthquakes, so while buildings will generally be designed for a higher seismic capacity, they must be proportioned similarly to prevent soft stories.
BD: Speaking generally, what is usually required structurally in order to retrofit an existing soft storey building so that it can properly withstand things like earthquakes?
JC: The most common way to retrofit a soft-storey is to increase the capacity of the weak level. In smaller buildings this can usually be achieved by adding new ‘lateral-force-resisting elements’ like shear walls or moment/braced frames until the overall storey capacity matches or exceeds the capacity of the levels above. On larger buildings this becomes more complex, as the loads are much higher and simply adding capacity may not be either feasible or practical. Therefore a full structural analysis is usually required to find a solution that can be tailored to the unique structural and architectural conditions. This often involves a combination of increased capacity and the introduction of ductile detailing which will allow the building to dissipate seismic energy. This can be roughly thought of as a ‘bend but don’t break’ approach to surviving an earthquake.
In some jurisdictions, the extreme risk caused by (many) homes built with soft stories has prompted local governments to intervene. The City of San Francisco (as well as many other municipalities in California) have enacted ordinances requiring home owners to assess and upgrade their properties, including single family home with garages a the lowest level, to reduce the risk of soft-storey failure in an earthquake.
BD: Thanks for this, James.
I don’t usually do Q&As on this blog, so let me know in the comment section below if you found this one valuable and if you’d like to see more of them.
Knight Frank just published the 17th edition of its annual “The Wealth Report.” I have spoken about this report many times before on the blog because I generally find them really interesting. So today I’d like to share two items from this latest one.
The first item is their most recent Prime International Residential Index (PIRI). What this does is track prime residential prices across 100 key city, sun, and ski locations. “Prime”, in case you are wondering, is defined as the most desirable and most expensive properties in each market — generally the top 5%.
Look at Dubai go:
When I see a chart like this I usually start at the top and then immediately start scanning for Toronto. Here, it’s more or less in the middle with a 4.1% increase. Totally reasonable. Prime property in Auckland and Wellington, on the other hand, didn’t fair as well in 2022.
The second item is this very wonderful diagram showing flight connectivity before Covid (12 months to March 2020) and then post-Covid (12 months to December 2022):
The way to read this diagram is that the most connected cities — ranked by the number and quality of flight connections — get pushed toward the center. They also get bigger. Less connected cities, on the other hand, slide toward the edges. All of the cities also generally gravitate toward their main regional connections.
The most obvious change is the greatly weakened connectivity of Chinese cities. This is not surprising given their zero-Covid approach. Moscow also seems to get rightly pushed out to the side.
Another story is the continued rise of both Singapore (to the likely detriment of Hong Kong) and Dubai. I have only been to Dubai once, and I couldn’t figure out how to navigate its sea of roads and highways, or how to locate an actual city center where humans walk around (though the historic Bur Dubai area was interesting).
But there is no denying that Dubai has become a pretty important global city.
Michael Beach used to have a YouTube channel where he “looked at Google Maps a lot.” Meaning, he would pan around various cities and comment on their planning and overall built form. Technically the channel still exists, but he stopped making new videos a few years ago. Here is one where he talks about Dubai being “an absolute mess” (3.8 million views) and here is one where he looks at North York (in Toronto) and asks: “why is it here?”
The most important point from his North York video is that it illustrates the deep divide that exists in Toronto (and other North American cities) between single-family “Neighbourhoods” (a defined planning term) and higher-density transit nodes, where things like tall buildings are allowed to go.
In the case of North York, this contrast is perhaps at its most stark. Even the street network is designed to stop these two urban forms from commingling with each other too much. There are ring roads that surround the transit-oriented density, and separate, more suburban streets on the other side of it:
This contrast is why there are so many people talking about the “missing middle.” And I’m sure that if you started asking random people on the street, most would agree that it would be nice if we could build more moderately-scaled housing. You know, like those buildings you see in Paris.
The problem: Where should it go? Some people would probably suggest the left side of the above ring road. Just don’t build as tall, okay? But this kind of land is already a scarce commodity in a city like Toronto. We need these tall buildings because most of the city is codified to look like the right side of the above ring road.
So if we have any chance of actually finding the missing middle, it is going to need to happen here, on the right side. Some progress has been made, not just in Toronto but across North America, with accessory dwellings (laneway suites). But it’s not going to be enough.
This was simply a first step. It was us finding a solution to, “how can we add some more housing here without changing the look and feel and character of these residential streets in any way?” But even this small and incremental change has proven to be exceedingly controversial. People still react to new laneway suites like this:
If you’re a homeowner that decides to create a new rental home at the rear of your property, you might be viewed as greedy. You are creating something (a home) that someone needs, and you intend to make a small margin on the transaction. It’s like making and selling bread for a small margin, except that selling delicious bread to people is typically viewed in a positive light. On the other hand, ensuring that the value of your house remains as high as possible is generally good practice here. Greed doesn’t factor in this way because, you know, single-family homes.
There is no surprise why the missing middle is missing. It is missing because we have decided that we want it to be. But hey, $2,145 per month seems like a very reasonable price for a 2-bedroom house.
I have a road sign question for all of you today. Here is a photo (from Google) of Bloor Street West and Symington Avenue in Toronto. It is an offset intersection. And as you will see, there are signs saying no right-hand turns on red, “except with green arrow.”
Also present at the intersection is a traffic light with the ability to communicate in four different ways: a green circle, a yellow circle, a red circle, and a green arrow pointing right. My question to all of you is this: when is it permissible to turn right?
It is clearly not permissible to turn right when the light is red. But can you turn right with either a full green circle or a green right arrow, or can you only turn when there’s a green arrow pointing right? i.e. No right when there’s just a green circle.
If you can, please leave a comment below. Depending on how this goes, I could be either winning a bet or losing a bet.
We have spoken many times over the years about Paris’ investments in cycling infrastructure and about its plans to become a 100% cycling city. And my twitter feed (see above/here) seems to suggest that it’s working really well.
Between 2015 and 2020, the city saw a doubling of its bike lanes. And from September 2018 to September 2019 alone, the city saw a 54% increase in cycling usage, with its street meters recording about 840,000 daily bike trips in the center of the city.
Of course, if you’re a cycling skeptic, you’re probably thinking at least two things right now. One, Paris is Paris. Not all cities have the benefit of such a compact urban form. And two, Paris doesn’t get real winters. So sure, it’s easy to cycle there. Where’s the snow?
While it is true that density is a key ingredient for walkability and active transport, the real catalyst for Paris was its cycling network. A lot more people are cycling in Paris today because it is now safer and more convenient to do so.
It is also true that Paris generally doesn’t get as cold as, say, Toronto.
However, Helsinki does. It has the same humid continental climate (and a lower average annual temperature). And if you look at the Copenhagenize (Cycling) Index, you’ll see that, in 2019, Paris had a bicycle modal share of under 5%, whereas Helsinki had a modal share of 11% (plus a near equal gender split).
Maybe it’s the over 1,300 km of bicycle infrastructure.
This compare-and-contrast tweet between Toronto’s High Park and New York’s Central Park was not meant to suggest that New York is a perfect comparable to appropriate (Toronto is not New York), or that foliage isn’t important in our urban environments. Instead, it was meant to highlight that:
The towers north of High Park (and north of Bloor Street) could almost certainly never be built in today’s planning environment. The recently built point towers exist because the slab towers were already there.
This condition of height/density tucked and setback off of main streets is something that you will find across Toronto, as well as in a number of other cities.
Sometimes it can be rightly argued that this is being done in order to preserve a fine-grained and pedestrian-scaled public realm, which is important. But in other cases, like the one above, it feels like a clear reluctance to accept big-city status and any sort of urban grandeur. Are we still trying to be a Victorian city?
Equally important in the design of public spaces are the edges and “walls” that frame it. And High Park’s edges need work. Why is there almost nowhere to go and hang out on the main edge of Toronto’s principal urban park? You have to go up to the Junction for that.
In general, the land around many of our higher-order transit stations is grossly underutilized. And this is a perfect example of that. What should happen here are some large-scale upzonings.
Toronto has a lot more CCTV cameras than I would have thought.
According to this (2022?) data from Comparitech, there is estimated to be about 19,236 cameras installed around the Greater Toronto Area. With a population of around 6.31 million people, this translates into a per capita rate of 3.05 (CCTV cameras per 1,000 people). What this means is that there is almost surely footage of me enjoying a late-night shawarma sandwich after the bar somewhere on the streets of Toronto.
In some ways, this is a high number of cameras. Tokyo, which is usually considered to be the largest metro area in the world with nearly 40 million people, only has 1.06 cameras per 1,000 people. Dhaka is 0.71. Sao Paulo is 1.04. Osaka is 1.57. And Montreal is 1.03. Though to be totally fair here, Rio de Janeiro is up at 3.34 (and it may be the most dangerous city mentioned in this post). Paris is 4.04. New York is 6.87. Los Angeles is 8.77. And London is 13.35.
But where things get really exciting is in authoritarian places. Moscow is estimated to have 16.85 CCTV cameras per 1,000 people. And in China as a whole, there is estimated to be roughly 540 million cameras scattered around its cities, which works out to an average of 372.8 cameras for every 1,000 people. For a city like Shanghai, this crudely equals something like 10.6 million cameras.
Vyborov wasn’t arrested that day, but the police informed him that he was under surveillance through Sfera, one of Moscow’s face recognition systems, for participating in unsanctioned rallies. Considered one of the most efficient surveillance systems, Sfera led to the detention of 141 people last year. “Facial recognition, and video cameras in general in a totalitarian state, are an absolute evil,” Vyborov says.
Here’s the other thing. Safety is usually touted as the reason to have lots of cameras. But Comparitech’s data suggests that there’s an almost non-existent correlation between lots of cameras and lower crime. I mean, just look at Tokyo. It is basically the model megacity, and its per capita camera rate is only 1.06. The real utility, it would seem, is using cameras and face recognition software to restrict personal freedoms.
Following yesterday’s post about the most expensive home in Brooklyn’s Dumbo, Jed Bryne of Oak City CRE fame shot me a note asking about the typical land multiple that developers need in Canada in order to make a project feasible. In other words, if your land cost is $X, what multiple on this would your top line number need to be in order to have a project? And he mentioned that in North Carolina, he often sees multiples in the range of 3-5x the land acquisition cost.
My initial response was that we don’t typically look at this metric. Many years ago, the rough rule of thumb for new condominiums here in Toronto used to be 10x the land price per buildable square foot. So if you were buying development land at $100 per buildable square foot (calculated as land price divided by the total gross floor area of the project), then you likely needed to sell your condominiums for somewhere around $1,000 per square foot.
On some level this can be a useful metric, because it allows you to quickly tell if a parcel of land is too expensive. And in some situations, it might allow you to compare sites/markets. If you have two different markets and land at the same $X price pbsf, but one requires a 10x multiple to be feasible and the other a 5x multiple, then it tells you something about the cost structures of these two markets. Construction costs probably won’t vary all that much (assuming similar builds), but project timelines, development charges, and many other things sure can.
But again, this isn’t a number that we typically care a great deal about.
There are a lot of variables in a pro forma and the “required” multiple can change overnight. Maybe it’s 10x today, but then development charges go up by 49% and now you need an even higher multiple in order to make the project feasible. So for us, the salient land number is the price per buildable square foot. What is the price per pound of development density? And the way you determine if you have a reasonable number is by doing a residual land value calculation.
The most expensive home in Brooklyn’s Dumbo neighborhood is currently under contract and is expected to close in the next few months (at least according to the WSJ). It is a 4,270 square-foot penthouse, with a 500 square-foot terrace, that occupies the full top floor of Olympia Dumbo.
The asking price / contract price is $17.5 million, which works out to be about USD 4,098 per square foot (or CAD 5,486 per square foot based on the exchange rate right now). Based on this price per pound, an equivalent 600 square foot suite would cost you about CAD $3.3 million.
The land was purchased in 2018 for about $98 million. I don’t know what the total GFA of the building is, but it does have 76 residences, so that works out to about USD 1,289,473 per suite (or CAD 1,726,624 per suite), for the land cost alone.
This should give you an indication of what the end suite pricing would need to be to make this development feasible, and likely also speaks to its average suite size. New York City tends to build much bigger suites. Certainly compared to here in Toronto.
