Tag: transit oriented development

• Two perplexing development narratives

  

  There are many development narratives that I don’t quite understand. (I’m thinking of Toronto, but you can probably replace Toronto with any number of global cities for this discussion.) One is the belief that our transit network is full and so no new development should be allowed in certain locations, next to certain transit stations. The thrust of this argument is that additional transit capacity must be added before any new development is allowed to occur. This might sound logical, except it ignores the fact that the need for new housing doesn’t magically disappear because subway cars are thought to be too busy during the morning rush.

  Transit systems are also a network, and so does this mean that no more development should be allowed to happen anywhere in the city/region? Or is the goal to simply move development off of higher order transit and into lower-density areas so that the future residents in these new buildings can either take buses to the transit stations that were previously deemed to be at capacity or drive their cars everywhere? (Our highways have excess capacity during the morning rush, right?)

  

  The second narrative that I find perplexing is that new developments don’t give back in any way. Above is a chart showing residential development charges in the City of Toronto, as of November 1, 2020. This chart outlines the fees that every developer must pay when building new residential, though it is important to keep in mind that there are many other government fees and charges that form part of almost every new development. These are things like parkland dedication and separately negotiated community benefits. But for the purposes of this post, let’s just focus on development charges (aka impact fees).

  Assume you’re building a 400 unit apartment building, consisting of 240 one bedroom suites (60%) and 160 two and three bedroom suites (40%). Based on the above chart, your development charge bill would be:

  240 one bedroom suites x $33,358 per unit = $8,005,920

  160 two and three bedroom suites x $51,103 per unit = $8,176,480

  For a total of $16,182,400.

  But it’s important to keep in mind that these are the rates as of November 1, 2020. They will almost certainly go up by the time these charges become payable for your 400 unit apartment building. By how much you ask? Well according to Urban Capital’s most recent issue of Site Magazine, which compared a development pro forma from 2005 to 2020, development charges in the City of Toronto have increased by about 3,244% during this time period. (The S&P 500 was up about 220% during this same time.) These are obligatory fees that contribute to everything from transit and parks to subsidized housing and municipal services. (The line items above.)

  So it strikes me that there are other more productive questions that we could and should be asking ourselves. Such as, why is it that our transit/mobility infrastructure hasn’t kept pace with new development and new housing demand? What are we going to do to fix that immediately? Why are we not taxing the things we don’t want (like traffic congestion) so that we have more resources for the things we do want (like transit and housing)? And most importantly, what is the best way for all of us to work together so that we can create the absolute greatest global city in the world?

  Photo by Mimi Di Cianni on Unsplash

  2021.01.30

• Crossing the chasm in Austin

  I can’t open Twitter these days without seeing someone in the tech industry talking about moving or talking about someone who just moved to either Austin or Miami. “What’s the best neighborhood in Miami for startups? My friend just moved to Edgewater. Where did so-and-so move?”

  Here’s a recent article from the WSJ talking about how accelerated tech-fueled growth is straining Austin. And below is a set of charts (from the article) comparing home prices in Austin and San Francisco. (Reminder, the California-to-Texas migratory pattern recorded the highest number of “net movers” last year.)

  

  But in reading through the article, I am reminded that the challenges facing Austin are not entirely unique. Growing cities all around the world are being put in a position where they need to decide whether they want to remain car-oriented and relatively low-density, or if they want to make the shift toward more transit-oriented urbanism.

  It’s admittedly not easy, both politically and practically speaking. It’s hard to rewrite deeply entrenched built form. But Austin is naturally looking at what happened in San Francisco, where restrictions on new development are thought to be partially (largely?) responsible for the city’s unaffordable housing.

  According to the same WSJ article, voters in Austin turned down two previous transit proposals. One was in 2000 and the other was in 2014. There was concern over too much urbanization. There was concern it would induce more people to move to the city. And there was concern that it would threaten the city’s low-rise single-family homes.

  But this year a transit plan was approved that includes three new rail lines, one of which will tunnel through downtown. Provided that Austin can effectively pair this with more housing, more uses, and more density — which is generally what you need to make transit work — then it may be well on its way to crossing, if you will, the chasm of urbanity.

  Charts: WSJ

  2020.12.27

• Urbanizing the suburbs

  Commuter rail has typically functioned as a way to bring people from the suburbs into downtown for employment, and sometimes recreation. That has typically translated into good inbound service in the mornings, good outbound service in the evenings, and mediocre service the rest of the time. It has also historically meant lots of subsidized surface parking. Free parking was (and still is) often thought of as the key to putting bums in seats and increasing ridership.

  Here in the Toronto region, this service is provided by GO Transit, which, since 2009, has been owned by Metrolinx. But as one of the fastest growing regions in North America, this kind of service and thinking has become increasingly antiquated. That’s why Metrolinx and the Government of Ontario are working to profoundly change the economic geography of this region by both electrifying the lines and implementing 15 min, all-day two-way service. 

  This may seem like an incremental improvement, but it is not. It is a significant change that will transform the service from commuter rail to regional express rail. Of course, this now means that it is time to rethink the land use policies and built form that surround these key transit nodes. One of the places where this is happening today is at the Clarkson GO Station. The City of Mississauga is in the midst of a planning study that will ultimately guide future development around the station. 

  I think this one of the most important shifts taking place right now in this region and elsewhere. It is the maturation of our suburbs and it is going to result in more walkable and vibrant urban places across our cities. So if you have a few minutes, I would encourage you to complete this survey that the City of Mississauga recently put out. The results will help to guide their Clarkson Transit Station Area Study. 

  I also think think it is worth completing the survey even if you aren’t local to the area. How to urbanize the suburbs is a universal problem.

  2018.12.07

• Microsoft Canada moving to CIBC Square

  

  Today, Microsoft announced that it will be moving its Canadian headquarters from Mississauga to the new CIBC Square development that is currently under construction in downtown Toronto (and rendered above). 

  According to RENX, Microsoft will occupy 132,000 square feet across 4 floors in the first tower. Occupancy is scheduled for September 2020.

  I love this project. The design architect is WilkinsonEyre. And there’s going to be an elevated one-acre park spanning the rail corridor between the project’s two towers.

  But it’s also noteworthy because it is an example of a major suburban tenant deciding to relocate to a transit-oriented urban environment. (I have a post on this somewhere.) 

  Image: WilkinsonEyre

  2018.09.12

• RioCan REIT announces new residential group

  On Monday, RioCan REIT announced its new residential brand: RioCan Living. This is the group that will now be responsible for redeveloping the 43 properties within their portfolio that they have identified as having intensification potential. Here’s how they are describing the new brand: “RioCan Living delivers best in class purpose-built rental units and condos along Canada’s most prominent public transit lines.”

  It has been interesting watching RioCan over the last 6 months. In the fall they announced that they would be selling off somewhere around $1.5 billion of their portfolio to rebalance toward Canada’s six largest markets, and in particular the Toronto market. And with this recent unveiling it is clear that they are doubling down on transit-oriented mixed-use communities as a way to future-proof their retail portfolio against disruption.

  Major markets. High-density. Transit-oriented. This shouldn’t surprise any of you. Here is a link to their latest investor presentation in case you’re curious.

  2018.03.06

• Los Angeles Councilman says upzoning near transit is the worst idea he’s ever heard

  Earlier this month I wrote about California Senator Scott Wiener’s bill to increase housing supply and mandate greater land-use intensities adjacent to transit. Here is that post.

  Judging by the comments, many of you seemed to think this was a fairly sensible proposal. I know I certainly did. Senator Wiener called it a housing-first agenda, as opposed to a housing-last agenda.

  So I thought it would be interesting to share how some people have responded to the proposal. 

  Los Angeles City Councilman Paul Koretz called it both “devastating” and “the worst idea [he’s] ever heard.” He went on to tell the LA Times that, within 10 years, people should expect their neighborhoods to be transformed into Dubai. 

  His conclusion: “I don’t think people want to see significant rezoning around single-family neighborhoods whether they’re near transit or not.”

  I don’t agree with his first set of remarks, but I agree with his second one. And that, of course, is the challenge. If you own a single-family home down the street from transit, what great incentive do you have to support intensification?

  Paul is the messenger.

  2018.01.30

• California State Senator wants to mandate denser and taller zoning near transit

  California State Senator, Scott Wiener, introduced 3 new bills at the beginning of this year intended to address the statewide housing shortage and continue the pivot from a housing-last agenda to a housing-first agenda.

  Here is a summary of the 3 bills:

  These three bills (1) mandate denser and taller zoning near transit; (2) create a more data-driven and less political Regional Housing Needs Assessment process (RHNA provides local communities with numerical housing goals) and require communities to address past RHNA shortfalls; and (3) make it easier to build farmworker housing while maintaining strong worker protections.

  And here is a bit more information about the first one:

  SB 827 creates density and height zoning minimums near transit. Under SB 827, parcels within a half-mile of high-connectivity transit hub — like BART, Muni, Caltrain, and LA Metro stations — will be required to have no density maximums (such as single family home mandates), no parking minimums, and a minimum height limit of between 45 and 85 feet, depending on various factors, such as whether the parcel is on a larger corridor and whether it is immediately adjacent to the station. A local ordinance can increase that height but not go below it. SB 827 allows for many more smaller apartment buildings, described as the “missing middle” between high-rise steel construction and single family homes.

  The belief is that transit-oriented sites in the state of California have the potential to accommodate up to 3 million additional housing units.

  

  Fewer barriers to creating new housing. More data. And less politics. You can read more about Wiener’s 2018 housing package over on Medium.

  2018.01.09

• 11th Annual Land & Development Conference

  Today I spent the day at the 11th Annual Land & Development Conference here in Toronto. I found it particularly good this year, but it’s now late, I’m tired, and I want to go watch game 6 of the NBA finals. So I think this is going to be a fairly short post.

  Here’s a summary of some of my key takeaways from the day (a lot of it is Toronto-centric):

  • Increasingly, the commercial and residential sides of the real estate development business are converging. And it’s being largely driven by the focus on urban intensification and mixed-use.

  • This is leading to an “institutionalization” of the residential side, which has historically been the domain of smaller private/local companies and rich families.

  • Merger is creating complexity around asset valuations: Is it about the income (cap rates) and/or the future development potential?

  • Low rise house prices in Toronto continue to skyrocket. Supply is highly constrained. This has been the story for a number of years now.

  • High rise condo prices in Toronto continue to be more or less flat (modest increase). The industry is going to need to figure out how to work with and compliment the current surge in rental apartment development. There is an element of competition between the two asset classes.

  • According the RealNet’s new home price index, the spread between low-rise and high-rise housing in the Greater Toronto Area widened to $326,659 as of this past April (2015).

  • Rental Apartment Case Studies: Motion on Bay by Concert Properties (Bay and Dundas) was underwrote at $2.60-2.80 psf rents back in 2009. Rents are now in the $3 range. The Heathview by Morguard (Bathurst & St Clair) had $2.80-2.90 psf rents in its pro forma. It achieved and beat these numbers.

  • There’s a flood of Asian money coming into (1) Vancouver and then into (2) Toronto looking for development projects. There appears to be a lot of impatient and/or dumb capital out there. Challenge remains finding good development sites.

  • Vancouver is well ahead of Toronto in terms of transit oriented development. The initial intent in Ontario was to create a link between the greenbelt that surrounds Toronto + land use (intensification) + transit. But we haven’t been doing a good job of building transit and developing around it. This ties in nicely with a post I wrote called: The case for planning transit around minimum population densities.

  I will end by saying that I found there to be greater transparency at today’s conference. There was a lot of talk about deal specifics and I don’t remember seeing this much detail at past conferences. 

  Maybe I just wasn’t paying attention closely enough before or maybe the industry is slowly becoming more transparent. I hope it’s the latter.

  If you were there today and I missed something groundbreaking, please share it in the comments below!

  2015.06.17

• 8 standards for transit oriented development

  

  Recently in the comment section of ATC, Lloyd Alter of Treehugger shared a great article talking about the 8 principles of Transit Oriented Development (TOD). “TOD” is one of those buzzwords (or buzz acronyms?) that gets thrown around a lot in city building and real estate circles. But I suspect that most people don’t exactly know what it takes to design and build successful TOD projects and neighborhoods.

  Which is why the Institute for Transportation and Development Policy came up with these 8 standards:

  1. WALK: Develop neighborhoods that promote walking
  2. CYCLE: Prioritize non-motorized transport networks
  3. CONNECT: Create dense networks of streets and paths
  4. TRANSIT: Locate development near high-quality public transport
  5. MIX: Plan for mixed use
  6. DENSIFY: Optimize density and transit capacity
  7. COMPACT: Create regions with short commutes
  8. SHIFT: Increase mobility by regulating parking and road use

  What should be apparent from this list is that the standards are quite clearly stacked against cars. Number 2 is about prioritizing non-motorized transport networks. And number 8 is about regulating parking use and road use. It’s about making a decision who you are planning for and acknowledging that when you do all of the above, you largely eliminate the need for driving.

  If you’re a “war on the car” kind of person, this might offend you. But if you look at the data I shared about a week ago (forgive me, I know the chart is a pain to read), you’ll see that it’s seemingly pretty difficult to design a city that’s equally great for both cars and for people. The cities where people love to walk, cycle, and take transit are precisely the ones where few people drive.

  Image: Flickr

  2014.11.12

• Is traffic the right question?

  

  Traffic is a big deal when it comes to real estate development. Residents are almost always concerned about the additional traffic that a development might bring to their community. And who can really blame them. They’re frustrated by traffic as it is in the city and so they naturally assume that more residents in their community will translate into more cars on the road.

  But as natural as this reaction might seem, I don’t believe that opposing intensification is the right long-term solution. In fact, I would argue that the question of traffic is a bit of a red herring. Because as Toronto’s Chief Planner Jennifer Keesmaat explains in this blog post, density can actually go a long way to reducing traffic congestion. And it does that by placing people closer to where they work, and by creating an environment that’s more conducive to other forms of mobility: walking, biking, and public transport.

  So instead of becoming fixated on traffic, I think there’s another, perhaps more relevant, question that we should be asking ourselves: Will this development, over the longer term, help to encourage a modal split that leads to more transit usage and less driving?

  Because if it doesn’t, well then we’re not doing anything to correct the problem we already have. In fact, if we don’t allow intensification to happen, it means we’re simply pushing demand outwards, horizontally. And the more you push people out of a city, the more likely they are to drive. In which case we’re only delaying the inevitable – which is more traffic.

  Image: Flickr

  2014.08.14