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: toronto

  • Releasing the shackles on mid-rise development

    I love mid-rise buildings. I think they are an incredibly livable scale of housing, which is why I am looking forward to moving into Junction House when we begin occupancies next year. But as we have talked about many times before on the blog, the mid-rise economics are challenging in this city, which is why we also don’t have any other Avenue-style mid-rise projects in the pipeline right now. We haven’t been able to find land where the math works.

    Here are two excerpts from a recent Globe and Mail article — titled “Toronto’s mix of planning rules limits growth of mid-rise housing” — that speaks to this dynamic:

    For well over two decades, Toronto’s official plan has called for transit-oriented intensification along the “Avenues,” much of it expected in the form of mid-rise apartments that can be approved “as of right” – meaning without zoning or official plan appeals. Such buildings are often seen as more livable and human scale than 50- or 60-storey towers.

    Yet, ironically, the highly prescriptive Mid-Rise Guidelines – combined with skyrocketing land, labour and building costs, as well as timelines that can run to six years for a mid-sized building – have turned these projects into pyramid-shaped unicorns, often filled with deep, dark and narrow units dubbed “bowling alleys.”

    “The economics are so frail,” says architect Dermot Sweeny, founding principal of Sweeny & Co., who describes the angular plane requirements as “a massive cost” because they make the structure more complicated and expensive while reducing the amount of leasable or saleable floor space.

    The critiques extend beyond the industry. Professor of architecture Richard Sommer, former dean of the John H. Daniels Faculty of Landscape, Architecture and Design at the University of Toronto, describes the controls in the guidelines as “very crude.” “They’re built around a mindset of deference to low-rise communities.”

    My opinion is that, at a minimum, we need to revisit the “guidelines” that govern these kinds of projects and we need to make this scale of development “as-of-right.” In the same way that laneway suites work, where you simply apply for a building permit, we need to make it just as easy for mid-rise housing. There just too many barriers and too many opportunities for something to come up that could hold up the entire project for months or years.

    Building at a variety of scales is important for the fabric and vitality of our cities. Unfortunately, I have all but made up my mind that small doesn’t work unless it’s as-of-right. I would love to build another laneway house and I fully expect that to happen at some point in the near future. But I just can’t seem to get my head around another mid-rise building right now. I wish that wasn’t the case. And it’s certainly not because of a lack of effort.

  • London to pedestrianize Oxford Circus

    I was just reading about London’s plans to pedestrianize Oxford Circus with two new semi-circular pedestrian piazzas (pictured above). And it reminded of two things.

    One, there are silver linings to this pandemic. And one of them is that it has forced us to rethink how we allocate public space and how we engage with it. It is incredible seeing Toronto right now with so many outdoor patios in full swing. Why eat inside when you can eat outside? We should have been doing this all along.

    Two, the transformation of Toronto’s Yonge Street cannot happen fast enough. We are sorely missing a pedestrianized spine through the middle of our downtown. This portion of Yonge Street currently looks like shit and I know that we can do much better.

    Think La Rambla in Barcelona. Grafton Street in Dublin. Lincoln Road in Miami Beach. These are the streets that seem to always draw you in. They are places where public life can play out. I’m pretty sure that I have never once visited any of these cities and not walked these streets.

    Thankfully Yonge Street’s transformation is underway. So let’s make it truly remarkable and one of the most beautiful streets in the world. That should be the bar we set for ourselves.

    Image: Westminster City Council

  • Patio season: on

    Shot on a DJI Mavic Mini and edited in Lightroom.

  • The 2021 Serpentine Pavilion

    Each year, the Serpentine Galleries in London commission a leading architect to design a new temporary summer pavilion in Kensington Gardens. The installation usually runs from June to October. Sometimes it then travels around the world, as was the case with Unzipped Toronto (Bjarke Ingels).

    Now in its 20th year, the Serpentine Pavilion is a tradition that started in 2000 with a building by architect Zaha Hadid. (There was no pavilion last summer because of COVID.) And as I understand it, the commission is usually awarded to an architect who has not yet completed a building in England.

    This year’s pavilion will open to the public on June 11. Designed by Sumayya Vally of Counterspace, the pavilion is intended to be a “puzzle of many different [historic] elements.” See video above. Vally also happens to be the youngest ever architect to be commissioned by the Serpentine Gallery.

    Architecture tends to take a long time. The Serpentine Pavilion happens much faster and happens every year (when there isn’t a pandemic). This strikes me as a very good thing for the world of architecture. I think we should do something similar — but of course better — here in Toronto.

  • Too much low-rise — Theresa O’Donnell in conversation with Larry Beasley

    I attended the above talk last night over Zoom. (Shoutout to Michael Mortensen for inviting Slate’s development team and for helping to moderate the Q&A.) The talk was a conversation between Larry Beasley (former Director of Planning for the City of Vancouver) and Theresa O’Donnell (the newly appointed Director of Planning for the City of Vancouver). Prior to this, Theresa was the director of planning for cities such as Las Vegas, Nevada, and Arlington, Texas.

    I’d like to point out two comments that she made last night that I found interesting.

    The first is that community meetings over Zoom actually aren’t all that bad. And the reason that they’re not all that bad is that they tend to draw out larger crowds (they are easier to attend), and so the feedback on development applications tends to be a bit more inclusive / representative. I agree with this overall view and I’ve been arguing for years (here on the blog) that the typical approach to community engagement is pretty much broken. The opinions become lopsided when you erect too many barriers to participation.

    The second point has to do with the amount of land in Vancouver (and other North American cities) that is dedicated to low-rise housing. It’s too much and it’s going to need to be addressed in order to increase overall housing supply and to chip away at the housing affordability problem. This won’t be news to this audience, but it’s interesting to see how widespread this belief has become. Of course, the big questions remain: How gentle should gentle density be? How much intensification should these neighborhoods see?

    I also appreciated her comment that it’s pure lunacy (my words, not hers) to have higher order transit lines running through mostly low-rise neighborhoods. We need much higher densities to sustainably support these kinds of investments in infrastructure. For us Torontonians, a good example would be (most of) the underdeveloped Bloor-Danforth subway line, though there are other culprits.

    Welcome Theresa.

  • Economic update with Benjamin Tal — get ready for the second half of this year

    Benjamin Tal — CIBC’s Deputy Chief Economist — is seemingly everywhere. And earlier today, he was delivering an annual economic update at an online event hosted by Brattys LLP (our condo lawyers) in partnership with CIBC. Below are a handful of slides that I found interesting and that I tweeted out during the event.

    All of our personal risk curves changed during this pandemic. When the first wave hit, we all had no idea how bad this was going to be and what to expect. And so we all stayed home and washed our hands and our groceries. That changed with each subsequent wave. And now we’re all ready and anxious to be done with this.

    Tal referred to this as one of the most unequal recessions we’ve ever seen. If you had a high paying job, you probably kept it. And after you stopped spending money on eating out, entertainment, travel, and watching the Leafs lose in person, you likely had a meaningfully higher savings rate. That has created some $100 billion of “excess cash” sitting on the sidelines.

    This cash wants to be spent and I think we’re going to see it flying out the door in the second half of this year. Much of it will also flow into services, which should help to prop up the hardest hit segments of the economy. So while there has been some real pain, many are expecting the economy to snap back pretty quickly. Get ready for some euphoria in the second half of this year.

    This last slide is particularly relevant to the kind of things we often talk about on this blog. It is essentially showing the increased demand for housing outside of the city during this pandemic (as of Q4 2020).

    A flatter line (Vancouver, Calgary) indicates that year-over-year price growth was less affected by “distance from the city center.” On the other hand, a steeper line (Toronto, Ottawa) indicates that price growth was stronger the more you moved outward from the core. In the case of Toronto, it was nearly 20% YoY when you got about 60-70 kilometers out of the city.

    But it’s important to keep in mind that the core of Toronto still grew at about 5% year-over-year. About the same as in Vancouver. And in the case of Ottawa, the number looks to be about 17.5% in the city center. These are meaningful numbers and not the kind of symptoms you would expect to see from downtowns in the middle of a death spiral.

    I would argue, as I have many times before, that this last chart is the result of short-term phenomena. I bet we’ll see a number of these pitches reverse by the time Q4 2021 arrives.

  • How meaningful is the exodus from Hong Kong?

    When I was in my early 20s, I spent a summer living and working in Taipei and Hong Kong. It was a wonderful experience. I’ll never forget my apartment in Hong Kong’s Causeway Bay. It was a small single room with a small bed and an even smaller bathroom. The bed didn’t fit me — at all — and my legs would hang over the bottom of it. I couldn’t stop hitting my shins on the bottom of the frame at night. The bathroom didn’t have a dedicated shower, just a hose coming out of the wall. So everything would get wet. It also took me 15 minutes the first morning I showered to figure out how to make the water hot. Eventually I got it.

    Despite all this, I remember being enchanted with Hong Kong. Here was this tiny little place with very little developable land that had managed to become, through trade, finance, real estate and other things, one of the wealthiest places in the world. Capitalism! I could also feel the connection to Toronto. Hong Kong has one of the largest Canadian expat communities in the world. In fact, I ran into one of my high school math teachers in a bar in LKF. That was wild. He had moved there with his wife to teach. I suppose because of all of this, I have tended to follow the region a bit more closely.

    Last July, the British government promised a path to citizenship for the 3 million or so Hong Kong residents who hold or are eligible for a British National Overseas passport. This passport, as I understand it, was given to citizens at the time of the 1997 handover. Though I don’t know how utility was actually derived from it over the years. Before last year’s announcement, this document didn’t include the right to stay in the UK. However, now it does. And the UK government expects that some 300,000 Hong Kong residents are going to take advantage of this in the first five years of the program. And indeed, according to the Financial Times, 2020 was the first year since SARS back in 2003 that the region lost people — it had a net outflow of about 39,800 people.

    What will this mean for Hong Kong? Well, Bank of America estimated earlier this year that capital outflows from Hong Kong could reach £25 billion in the first year of the program. But maybe this is being too conservative. Here in Canada, capital outflows from Hong Kong hit a record last year at C$43.6 billion. But this too could be an underestimation, as it doesn’t include transfers below C$10,000 and probably a bunch of other transfer methods. How much money is actually flowing outward?

    This weekend the Financial Times published the above survey results showing sentiment around leaving Hong Kong. Surveys are, of course, a funny thing. Saying you might probably potentially do something is a lot different than actually doing something. But for what it’s worth, about a quarter of pro-democracy supporters (which is maybe half of the population?) responded by saying that, yes, they would be prepared to leave. If you include those who responded no, but that they would reconsider and leave if things got worse, the number increases to about 70%.

    I don’t know how meaningful all of this becomes for Hong Kong. Time will tell. But it has me thinking about my tiny bed and tiny shower in Causeway Bay.

    Image: Financial Times

  • From office to residential in London

    It was recently announced that the City of London — the historic town center and primary CBD of the region — is aiming to create at least 1,500 new residential units in the Square Mile by 2030. Part of its strategy is to convert disused office buildings into residential. Currently, the City has about 7,850 residences, which is a drop in the bucket and whole lot smaller than its 19th century population of 125,000.

    Tony Travers, director of LSE London, is quoted in FT saying that the City is really facing “twin challenges.” You’ve got Brexit, which caused prime office cap rate rates to stagnate in the UK, and you’ve now got the whole work from home thing. Nobody really knows how this latter piece will fully shake out when it’s all said and done, but we shouldn’t forget the power of agglomeration economies. It’s what powers cities.

    Calgary is another example of a city that is looking to encourage change. Last month a $1-billion plan was approved to help convert office buildings into housing. (Shout out to Steven Paynter of Gensler who is quoted in the article talking about what makes for a suitable office conversion project.)

    What’s interesting about these announcements is that oftentimes cities cling to their non-residential spaces out of fear that once that supply gets converted it will never come back. That is certainly the case here in Toronto with its office replacement policies, although many years ago when downtown living wasn’t nearly as cool, there was a similar push to encourage more residential development in the core. Looks like that idea worked.

    We know that office space isn’t going away. Zoom is an awful substitute for in-person interactions. People need to congregate (and tend to like doing it). Urban agglomeration economies drive innovation. Bigger cities with higher population densities tend to create more wealth for their inhabitants. So perhaps the takeaway from these announcements should be that, yeah, office space is vital, but it’s okay to do a little rebalancing once in a while.

  • Below grade at Yonge & Eglinton

    I often hear people lamenting about all of the construction that is taking place right now at Yonge & Eglinton in midtown Toronto. But that’s kind of what happens when you build a new subway line (okay, a partially buried light rail transit line). Above is a recent drone video that Metrolinx released showing the progress at Eglinton Station (I think I would have gone with a little Booka Shade for the soundtrack instead). I bet that most of you will be surprised to see how much is happening beneath street level. If you can’t see the above video, click here.

  • In support of rubber chicken

    This morning I attended ULI Toronto’s annual “Meet the Chief Planners” event. (Some of my random tweets from the morning can be found here.) Now in its 7th year, it is a great event where all of the chief city planners from around the Greater Golden Horseshoe area come together with professionals from the land use community to network and discuss the future of our cities.

    Normally it happens in the evening over dinner and drinks, which is how I attended last year right before our first lockdown (we were at the elbow bump and foot tap stage of the pandemic). But this year it was of course online.

    First, I would like to say thank you to Multiplex Construction Canada (our partner on Junction House) for the invite. And secondly, I would like to say kudos to Richard Joy and the rest of ULI Toronto for coordinating such a great event with over 400 virtual attendees.

    However, the main point that I would like to make today is that I don’t know how anyone can attend a virtual conference and believe that this is some sort of “new norm.” I don’t know about all of you, but I am ready to go back to rubber chicken dinners and too many glasses of affordably priced wine — pronto.

    I say this not to criticize any of the groups that are working hard today to organize virtual events. I am a big fan of ULI and the work that they do. I would encourage all of you involved in the built environment to join immediately if you’re not already members.

    Instead, I say this as yet another piece of evidence for why I won’t stop writing and talking about the resilience of our cities. Video calls are such an awful substitute for sitting around a table with people and breaking bread. It’s not even close.

    And so as I sat at my home office desk this morning, listening to the conference and eating McDonald’s hotcakes (because, hey, Uber Eats and because, hey, it’s Friday), I couldn’t help but be reminded of how bullish I am on cities and city life. This, I thought to myself, is why cities are such a centralizing force.

    Ultimately, it is also why groups like the Urban Land Institute are so important. It is because our cities matter a great deal and because they’re not going anywhere. If you aren’t sick of me talking about the resilience of cities, you can also find me in this recent RENX article called, “Toronto residential tower boom shows no signs of slowing.”