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.

Subscribe

Tag: travel

  • Canada announces high-speed rail between Quebec City and Toronto — finally!

    The train from Paris to Marseille takes just over 3 hours:

    To drive this same distance, it would take just over 8 hours:

    So unless you had a very specific reason, I don’t know why you’d ever want to drive this route. I certainly hate long drives and would avoid this at all costs.

    On a related note, the Canadian government announced this week that it will actually be moving forward with a high-speed train linking Québec City to Toronto, stopping in Peterborough, Ottawa, Montréal, Trois-Rivières, and Laval. And unlike previous announcements, it will actually go pretty fast — upwards of 300 km/h, which is comparable to what the TGV does on the above route.

    There are three consortia currently competing for this contract, but apparently the federal government has already chosen a winning bidder. An announcement is expected next month. At the same time, the project office owns all of the bids, and so there’s a chance that elements from each of them could be used in the final project.

    According to official messaging, the design alone is expected to take some 4 to 5 years, which is an eternity and way too long. But at least we seem to be moving forward. This rail link is a no brainer. It will compress the geography of an importantly bilingual corridor with nearly 20 million people — about half the population of Canada! It’s our megalopolis.

    Now we just need to move forward with urgency and with an unwavering commitment to creating the best high-speed rail service in the world. Let’s not accept mediocrity. And let’s not cancel it once we’ve already sunk millions into it. That would be a terrible outcome for such an obviously important nation-building project.

    LFG.

  • We need far better urban data

    The divisive debate over bikes lanes in Toronto continues to remind me that we need far better urban data. People and politicians keep touting “evidence-based decisions,” but what exactly is that evidence? The high-level figure being thrown around by the anti-cycling side is that only something like 1% of residents use bike lanes. So obviously it only makes sense to focus on the 99% and not give up any space to this small minority group.

    But this is highly aggregated data. It also doesn’t speak to any of the externalities associated with introducing new bike infrastructure. Looking at 2021 Census data, the number of cyclists was actually around 5% for the old City of Toronto and in some areas it was between 15-20%. However, it’s absolutely critical to note that this is only the people who selected cycling as their “primary mode of commuting” when submitting their responses to the last census.

    Meaning, it excludes people who maybe only cycle 1-2 days a week, or who ride for leisure and/or for exercise, or who ride to their French class in the evenings (like me). I would also assume that these numbers have generally grown since 2021 given the overall investments that have been made in biking infrastructure. So overall, this is weak data. It’s a few years old. And it excludes many types of users. We need to get more granular.

    Like, it’s great to see local business owners speaking out about the benefits that they have seen as a result of the Bloor bike lanes, but in the end, this is also anecdotal. We need real-time data, precise modal splits, the throughput of every major street, and much more. Then maybe we’ll be able to better optimize around the fact that we are a city divided by built form and by politics. That’s the thing about evidence-based decisions, they tend to get stronger with accurate evidence.

  • Branded residences are a luxury good

    Elevate Miami, which I wrote about last month, just announced a number of new speakers and, more specifically, a number of new high-rise development projects that will be discussed at the conference. They are (not an exhaustive list):

    • Dolce & Gabbana Residences, Miami
    • Mercedes-Benz Places, Miami
    • Aman and One High Line Residences, New York
    • Indian Creek Residences & Yacht Club, Miami Beach
    • Edition Residences, Miami
    • AGE360, Curitiba, Brazil

    What should be clear from this list is that Miami is like a different planet. It is one of the places where the richest people in the world go to spend their money, much of it on real estate. Because of this, you can think of this real estate as a luxury good, which is why so many of them are now branded.

    In economic terms, a luxury good is typically defined as a good where demand increases — more than what is proportional — as incomes rise. For example, if a person’s income goes up by 1%, but their demand for a particular thing goes up by 5%, then this thing would be considered a “luxury good,” as opposed to a “normal good.”

    The technical definition is an income elasticity of demand that is greater than 1. More simply, this just means that as someone starts making more money, they will start spending a greater percentage of their income on luxury goods. This is in contrast to “necessity goods,” where it doesn’t matter how much money you make, you only need so much toilet paper, for example.

    What all of this suggests is that as people from all over the world get rich, they are likely to want more branded residences in a place like Miami. However, the flip side of this dynamic is that as incomes fall, the demand for luxury goods should, in theory, also fall more than what is proportional. It works both ways.

    So I’ll be curious to hear — from the developers at Elevate — how things are going right now. We’re at a time in the real estate cycle where everyone is rethinking their strategies. Or maybe, Miami truly is a different planet.

  • May we have a bike lane?

    Today, the government of Ontario announced legislation that, if passed, would require municipalities to receive approval from the province before installing any bike lane that would result in the removal of lanes for traffic. And in order to receive such an approval, municipalities would need to demonstrate that the proposed bike lane(s) won’t have a negative impact on vehicle traffic. To be clear, municipalities should still be free to remove lanes for other purposes — such as on-street parking — but not for bike lanes.

    There’s a lot that can and will be said about this announcement. I’m also aware that I have my biases. I’m an urbanist. I live in a walkable neighborhood. And I enjoy biking, a lot — both to get around and for fun. So I think it’s clear that this announcement was designed to appeal to a specific audience: those that drive in from the suburbs and who are deeply frustrated. This is somebody doing something. Never mind that the new Eglinton LRT line isn’t open yet and nobody knows when it will actually open, look over here at these annoying cyclists.

    The problem with this line of thinking is that it’s not going to fix our traffic. The way you make things better in a big global city with lots of demand for road space is to reduce car dependency. This is not a popular thing to say, but it’s the reality. And broadly speaking, this is done in two ways. One, you provide great alternatives. And two, you price roads accordingly, through things like congestion charges. Incidentally, this also creates a virtuous cycle, because the latter raises money for the former.

    In many ways, we’ve been getting better at number one. In 2015, Bike Share Toronto recorded 665,000 trips. Since then, ridership has increased every year. In 2023, the network recorded 5.7 million trips. And this year, the number is expected to exceed 6 million. This is not nothing. This is a lot of people riding around on bikes, some of whom may have instead opted to drive or take an Uber. And I think there’s no question that this continual increase in ridership is at least partially supported by the fact that we’ve been creating more bike lanes.

    That said, I think it’s clear that to continue to move forward as a city we’re going to need to start collecting far better urban data. We need to know things like how many cars and bikes are on every street and how fast they’re moving. (AI can do this, right? ) This way we can continually optimize for moving the most number of people as efficiently possible. And if it turns out that I’m wrong, and clamping down on bike lanes and having more people drive is the most efficient, I’ll of course accept that. Just show me the data.

  • Western resort real estate is in very high demand

    People like ski and snowboard towns. Here’s an excerpt from a recent WSJ article talking about Park City:

    Prices continued to rise in most luxury ski towns this past year, but none grew as much as Park City, a former silver mining town 32 miles east of Salt Lake City. The average home sale price there grew 35% in 2023 from 2022, compared with a 9.4% increase at Vail and Beaver Creek and 3.2% at Aspen, according to the resort report by Summit Sotheby’s International Realty. 

    The main point of the article is this: Park City has gotten really expensive, and so people are now looking and buying homes further out in places like Heber City, Midway, and Kamas. Here’s how expensive expensive is:

    Over the last four years, Covid has stoked demand for western resort real estate. In Park City, single-family homes have sold for a median price of $4 million year-to-date, up from $1.996 million in 2019, according to Redfin, which averaged the monthly median sales prices weighted for the number of homes sold. One home was listed in September for $65 million, which could set a record for the state. It’s now under contract, according to listing agent Paul Benson of Engel & Völkers, who declined to disclose the sale price.

    This, of course, isn’t a novel phenomenon. It’s the whole “drive until you qualify” thing. But what’s interesting about this particular mountain example is that it’s not centered around access to a CBD or downtown; it’s centered around “how fast can I get to a ski and snowboard resort?”

    For example, Deer Valley has a new East Village that is expected to open up in 2025. This brings the cities mentioned above closer in. And buyers seem to be doing that math: “It’s a 25-minute drive today, but next year I’ll be able to get on a lift in 15 minutes. Score.”

    Given that Deer Valley also doesn’t allow snowboarders, it’s interesting to think about how these trends could be bifurcating the region between skiers and snowboarders. I don’t have any data on this, but I bet if you mapped it out, there would be some sort of clustering happen.

    The article also goes on to talk about transportation. Because you can’t talk about new development and real estate without talking about traffic. But I think Bill Ciraco (Park City Council) gets it exactly right in the article: This is a car problem, and less of a people problem.

    In my mind, the Wasatch Range is destined for something like this ONE Wasatch concept, which is/was a proposal to link seven resorts through a handful of new skiable connections. This is similar to what you’ll find in Europe, and it means less driving and more time on the mountain.

    That’s what everyone wants to be doing anyway.

    Photo by Lauren Pandolfi on Unsplash

  • Dupont Street to become a complete street

    The City of Toronto is proposing to turn Dupont Street — between Dundas Street West and Davenport Road — into a “complete street.”

    Here’s the area in question:

    It’s 4.7 kilometers long.

    And here’s how the city thinks about complete streets:

    “Complete streets” are streets that are designed to be safe for all users: people who walk, bicycle, take transit or drive, and people of varying ages and levels of ability. They also consider other uses like sidewalk cafés, street furniture, street trees, utilities, and stormwater management.

    Right now, the city is in the public consultation phase. If you’d like to provide your feedback, you can do that here. You have until October 30th. The online tool is also pretty neat. You can drop comments on specific areas of the street. And already the map has been totally filled up.

    This is an important and busy artery in midtown. I use it all the time as a pedestrian, cyclist, and driver. It’s not the best street, though. Yesterday it took me 45 minutes to drive from one end of it to the other. Along with better street design, this part of the city could use better transit.

    I’m looking forward to seeing how Dupont ultimately gets designed.

  • Weekend cycle around the city

    On Saturday, I went on a bike ride all around Toronto. We cut across midtown (checking in on One Delisle), stopped at the Chester Hill Lookout (which if you grew up in the east end is where you probably went as a teenager to make out), shot down the Don Valley, and then turned west along the waterfront. The weather was perfect.

    As we were going along the waterfront, we passed the new Aqualuna building that is under construction on Queens Quay East, near Parliament Street. Being the architecture nerd that I am, I immediately noticed that as you pass by — at the speed of a bike — the balconies create this really nice cinematic effect.

    So I stopped to take these photos (I probably should have taken a video now that I think of it):

    I then tweeted a tweet calling it one of the most beautiful buildings going up in Toronto today. Judging from the responses, most people seem to be in agreement, but a few people questioned the practicality of balconies like this. Namely how private and usable they will be. I don’t disagree, but I still think it’s fine looking building.

    What do you think?

  • Pedestrian plaza or parking lot?

    It is maybe comforting to know that even Europe wrestles with the decision of whether a grand urban space should be used for pedestrians, or turned into a parking lot. Take, for example, the Grand-Place in Brussels (pictured above).

    Today, it is a UNESCO World Heritage Site and one of the most important tourist destinations in the city. Perhaps its most famous. But during the 1960s, in what Wikipedia calls a “low period of appreciation,” it was a parking lot.

    This lasted until 1972, when a bunch of people from the community got together and lobbied for it to, you know, not be a parking lot. Not surprisingly, local shop owners were worried, at the time, that this would hurt their businesses. This is often the concern.

    Here in Toronto, where we continue to debate the pedestrianization of Kensington Market, we have surveys showing that 94% of visitors to the area support pedestrian-only zones, but that this number drops to 55% when you narrow to people who live/work/own stuff in the area.

    But if your goal is to sell more things to people, then there’s something to be said about listening to what your visitors want. In the case of Grand-Place, pedestrianizing the square made it far more popular as a tourist destination. And I think the same would be true of Kensington Market.

    For some photos of iconic public spaces in Europe being used as parking lots, check out this Politico article.

    Image: Wikipedia Creative Commons

  • Toronto’s highway 407 is doing what it is supposed to do

    In Google’s guide to its maps, there is a section on live traffic congestion, and in it, this image is used:

    It is a map of the Toronto region, and not surprisingly, it is showing traffic congestion on the 401 highway. But what’s interesting about this image is that there’s no traffic at all on the 407 express toll route. (This is the green highway running generally parallel and north of the 401, for those of you who aren’t familiar with Toronto.)

    This is, of course, accurate. A 2019 study by the Canadian Centre for Economic Analysis called the Economic Impacts of Highway 407 found that, at the time, an average of 413,000 drivers were using the 407 highway each weekday. And of these trips, more than 85% of vehicles were travelling at or above 100 km/h. This translates into a traffic congestion index of almost zero.

    During this same time, the highway 401 through Toronto showed that about 85% of vehicles were travelling below 50 km/h. Meaning, lots of congestion. This also had a significant impact on collision and fatality rates. On the 407, both were about half of what they were on the 401. (I couldn’t find any more decent data, but if you have it, please share it in the comments.)

    The reason for these differences is simple: the 407 charges for congestion. Here are the current per kilometer weekday rates for light vehicles travelling westbound:

    Naturally, there are people who think the 407 is too expensive and that it shouldn’t have been privatized. But the reality is that it works; really well in fact. And this is the only method that has been proven to reliably combat congestion. We can go ahead and spend a gazillion dollars building a new tunnel under the 401, and double the number of lanes (it’s already 18 lanes at its widest point), but we already know that it won’t solve our congestion problem.

    Either we price roads and congestion, or we don’t. But if we don’t, then we need to be brutally honest with ourselves about the economic trade off that we are making: free/underpriced roads = traffic congestion, and accurately priced roads and congestion = less traffic. The choice is ours. But know, there’s no such thing as a free lunch.

  • The growth of branded residences

    A branded residence is, as the name suggests, a residential building with a known branded attached to it. Historically, these have tended to be hotel brands. But it really just needs to be any brand that people know, care about, and will pay a premium for. So it could also be a fashion brand, a car brand, or whatever else.

    This is a growing segment of the residential market. According to UK-based Savills, there were only 15 or so of these “schemes” in the 1990s (the UK uses scheme in lieu of project, which always sounds conniving to me), but by the end of this decade they expect the pipeline of branded residences to exceed over 1,200.

    I would also argue that projects designed by celebrated architects and/or designers are a form of branded residence. And this is not being captured in Savills’ number above.

    Whatever your definition, today, the branded residence capital of the world seems to be Dubai, which feels right. And the biggest brands, by what appears to be a long shot, are Four Seasons and Ritz-Carlton (hotel side), and YOO and Trump (non-hotel side). Here are the full rankings from Savills:

    This is an interesting part of the real estate business for a few reasons. One, it makes sense. A New Balance shoe that gets co-branded with Aimé Leon Dore unlocks additional value for both sides. ALD has a brand that certain people care about. So, of course the same would be true of real estate paired with the right brand.

    Two, it’s a growing market, and I think this is aided by the fact that development is an intensely local business — so it can be hard to grow a globally-significant brand on your own. Sometimes you just need to borrow someone else’s.

    And three, it’s usually a less risky approach to getting your name on buildings. Branded residences typically operate on a licensing model, which means developers pay for the right to use the brand. The brand may also capture some of the upside in the form of a percentage of sales. That’s less risky than putting up your own money.