Tag: urbanism

• Planning for the unplanned

  

  I was listening to The Urbanist (Monocle Radio) last night while I was making dinner and there was a segment on Moscow’s “illegal retail kiosks.” These are small scale retail structures that were built without formal planning permissions and so the city decided to demolish them. 

  There was lots of backlash. Photos here.

  Now, I’ve never been to Moscow. So I can’t really comment on the attractiveness and usefulness of these kiosks. But I suspect that these illegal retail kiosks, many of which seem to have been located around metro stations, contributed quite a bit to the city’s urban vibrancy. Retail is hard to get right. It doesn’t work everywhere.

  All of this got me thinking about our tendency to sterilize and overplan cities. I’m not saying that planning is bad. It’s not. But I do think we should acknowledge that we don’t know everything about the future and that human ingenuity will undoubtedly unlock new things we never thought would be beneficial.

  So how do we plan for the unplanned? Perhaps it starts with accepting the off-center. Here’s a quote from Anthony Bourdain (it’s all over the internet, but I can’t seem to find the original blog source):

  I think that troubled cities often tragically misinterpret what’s coolest about themselves. They scramble for cure-alls, something that will ‘attract business,’ always one convention center, one pedestrian mall or restaurant district away from revival. They miss their biggest, best, and probably most marketable asset: their unique and slightly off-center character. Few people go to New Orleans because it’s a ‘normal’ city — or a ‘perfect’ or ‘safe’ one. They go because it’s crazy, borderline dysfunctional, permissive, shabby, alcoholic, and bat shit crazy — and because it looks like nowhere else. Cleveland is one of my favorite cities. I don’t arrive there with a smile on my face every time because of the Cleveland Philharmonic.

  There’s value at the margins.

  2016.09.19

• Building the future

  

  Toronto-based heritage architect Michael McClelland recently published a piece in Spacing called: Misuse of Heritage Conservation Districts can deaden both past and future. 

  Here are a couple of snippets:

  The City of Toronto believes it has found a silver bullet to control development pressure in the downtown core through the use of a tool known as a “heritage conservation district” (HCD).

  The problem is that HCDs are meant to conserve intact and bone fide heritage areas, such as Wychwood Park, Rosedale, or Cabbagetown. They were never intended to control development downtown.

  In preparing for a HCD designation, consultants trained in history examine an area’s context and determine what is of value historically. They do not generally study the growth potential of an area, its future, nor any economic considerations, nor the larger planning policy framework, or even an evaluation of the built form generated by other market forces. HCDs look at heritage.

  The rigidity of the proposed new urban design controls introduced by the HCDs effectively prohibits innovative and thoughtful architecture in the downtown core.

  My own view is that it should be a balance between preservation and progress. We should respect our past, but at the same time look towards the future. Don’t fear change. Michael argues that HCDs achieve neither of those things. It’s worth a read.

  Speaking of the future, the CityAge conference is returning to Toronto on October 6 and 7. Their mission statement is about “building the future.” I was on one of their panels last year and it was an overall great event.

  If you’d like to attend, use the code “CITYAGE” to save $100. And if you’re a young professional (under 35) and/or a startup, email Marc Andrew to get an even sweeter deal. Tell him you’re a reader of this blog.

  Image: Photo by me taken at People’s Eatery on Spadina Avenue

  2016.09.18

• Corporate disaggregation (and some book suggestions)

  

  The truism is that both people and companies are moving back to downtowns. We are living in an urban era. But when you really look at the data, it is clear that the suburbs are far from dead. And when it comes to companies, the way in which they are relocating to downtown is not the same as it was in previous generations.

  The Economist calls it “corporate disaggregation.” Aaron Renn calls it “executive headquarters.” And it is the idea that it is primarily the elite executive jobs that are moving back downtown. The routine jobs are remaining in the suburbs or are being pushed out to even further outposts. On top of this, a move downtown can also provide the impetus for downsizing.

  Here’s an excerpt from The Economist:

  “The best book to read if you want to understand corporate America’s migration patterns is not Mr Florida’s but a more recent study, Bill Bishop’s “The Big Sort”. It argues that Americans are increasingly clustering in distinct areas on the basis of their jobs and social values. The headquarters revolution is yet another iteration of the sorting process that the book describes, as companies allocate elite jobs to the cities and routine jobs to the provinces. Corporate disaggregation is no doubt a sensible use of resources. But it will also add to the tensions that are tearing America apart as many bosses choose to work in very different worlds from the vast majority of Americans, including their own employees.”

  It is interesting, and probably disconcerting, to note that the divisiveness we are seeing in politics is also manifesting itself in our cities. The causes are likely the same. We may be living in an urban era, but we are also living in an era where, sadly, broad-based urban prosperity appears to be declining. See Elephant Graph.

  Another somewhat related book that may be of interest is Overcomplicated: Technology at the Limits of Comprehension. It is about the increasing complexity of our cities and our inability to properly understand it all. It argues that it may be time to seek out new tools.

  2016.09.10

• Which cities shop small businesses?

  Using anonymized credit and debit card data from over 54 million Chase customers across the US, City Observatory recently published a chart showing the percentage of retail sales that goes to “small businesses” in 15 US cities.

  

  This is based on proprietary data (2015) from JPMorgan Chase and is surely not perfect. But it’s still an interesting approximation.

  At the top of the list is New York with 36% of all retail sales going to small businesses. And at the bottom of the list – keep in mind that this list only has 15 cities – is Columbus with 23% of retail sales.

  One of the overarching findings was that urban centers tend to see 10-15% more retail sales going to small and medium sized businesses compared to the suburbs.

  Intuitively, this makes sense to me. Space is a precious commodity in urban centers and that may naturally privilege the small operator. There’s also the question of consumer preference among urbanites.

  If you’re interested, you can download the full report from JPMorgan Chase, here.

  2016.09.03

• Preserving place

  I was recently asked: How do you go into a neighborhood, build new, and not erase and/or sterilize what makes that neighborhood interesting in the first place? 

  Gentrification is a controversial topic in city building. Too often I think we ignore what happens when we don’t invest in communities, but that doesn’t mean we shouldn’t be deliberate when we do make investments.

  Development is filled with tensions. We are constantly trying to navigate through constraints and balance out the wants of each and every stakeholder. It becomes an art. It doesn’t always work out as planned.

  To state the obvious, I would say that it starts with caring. If you’re not interested in community and city building, then the default response will be to simply replicate what worked on the last project.

  But every place has a local culture. And if city builders are to have any hope of preserving and building upon what makes that place unique, we have to first understand it. What made it successful in the first place? What is its DNA?

  Because then you’re in a position to think about both built form and programming in a way that is culturally sensitive.

  One example that comes to mind is the proposed redevelopment of Honest Ed’s / Mirvish Village here in Toronto. 

  The “micro tower” design is intended to create the sense that the area was built up organically over time. And the fine grain retail (50-60 individual retail spaces) is intended to house local retailers, micro retail startups, and pop-up shops. To me, both of these elements speak to the history and fabric of the area.

  Adopting a unique approach can also sometimes mean rethinking how you measure ROI. If all you care about is who will pay you the highest rent – right now – then you’re going to make a decision based on that metric.

  Maximizing revenue is not a bad thing. That’s what businesses are supposed to do. But sometimes there is or should be a larger vision at play. And sometimes you need to take a longer view.

  In Toronto’s Distillery District, the developers made the decision to eschew large chains and franchises (in favor of more local retailers) so that they could create a very particular place. Ultimately that particular place became a great place to sell condos, but they suffered early on for it.

  I like how Gary Vaynerchuk put it when he asked: What is the ROI of your mother? Sometimes you may not be able to measure it, but that doesn’t mean the ROI isn’t there.

  Any other suggestions?

  2016.08.28

• Urban migration, household type, and housing supply

  Here is an interesting discussion paper on the Toronto region’s economy, demographic outlook, and its land use. It was recently published by IBI Group and Hemson Consulting to support the 10-year review of our regional transportation plan.

  I wanted to share a couple of charts from the report that I thought were interesting. If you’re not in the Toronto region, I would be very curious to hear how your city might compare in terms of the way it is trending.

  The first chart is net migration by age group. Like Vancouver – similar chart posted here – people have been moving into the city/Toronto when they’re young and then moving out to the suburbs once they start having families. 

  Will that continue? The oldest Millennials are now hitting their mid-30′s and I am very interested to see if there will be any reversal in this.

  

  Given the above trend, people in this region are not surprisingly also swapping apartments for ground-related housing as they get older. The crossover point seems to be (or at least has been) when people hit their mid-30′s. Again, I am curious how this may evolve as the city matures.

  

  Because if you look at housing completions from 2001 to 2016 (chart below), the only municipality that was able to meaningfully increase its housing supply was Toronto. 

  Every other municipality – except for Hamilton, which posted modest gains – experienced significant declines in the number of new homes delivered to the market over the last census periods. 

  Of course, the only reason Toronto was able to increase its housing supply was by building up – in other words by building condos and apartments. (Shown in the purple below. For some reason the legend is incomplete in the report.) 

  

  If you look at the share of housing completions, over 80% of new homes in Toronto are now in apartment form. 

  

  Intensification is a deliberate policy choice. And we can certainly debate whether it’s a good or bad thing (I believe it’s a good thing). 

  But putting that aside, the above charts are a great answer to the perennial question: “How is it that Toronto is building so many condos?” This is why.

  2016.08.19

• Compact and constrained

  I was walking by a tight construction site last night and it got me thinking. Besides the obvious environmental benefits of building up, as opposed to out, compact urban sites can force something else: intent.

  One of the ways I think about good design is that it is intentional. It is about seeing problems and/or opportunities and then being deliberate in how you respond. Every creative decision needs a reason why. I like how John R. Moran talks about design in this blog post from 2014:

  “The opposite of design, then, is the failure to develop and employ intent in making creative decisions. This doesn’t sound hard, but, astonishingly, no other leading tech company makes intentional design choices like Apple. Instead, they all commit at least one of what I term the Three Design Evasions.”

  The three design evasions he goes on to talk about are (1) preserving, (2) copying, and (3) delegating.

  The thing about compact and constrained urban sites is that they can force you away from the three design evasions that Moran lists in his post. You can’t just repeat what was done in the past or copy what someone else has done, because that precedent probably didn’t have the same challenges you face.

  Of course, if this were enough to promote great design, our cities would look a hell of a lot different. Still, it’s one of the reasons why I’m attracted to compact forms of development such as laneway housing and other urban infill.

  2016.08.17

• BARED: David Wex, Urban Capital Property Group

  

  David Wex started his career working for one of the big Seven Sister law firms in Toronto. But right from the outset, it was clear that he wasn’t in it for the long run.

  In fact, only a few days after he started, David had the clever idea of turning his desk around so that it faced the window, instead of the hall. That way, he could avoid eye contact with partners as they walked by his office, and reduce his chances of being assigned a file.

  Of course he couldn’t avoid being tracked down all the time. But whenever someone would try to assign him work, he would simply say: “I’m sorry, but I’m really busy working on something right now.” His nickname quickly became “One File Wex” and it was clear that he was headed towards the departure lounge and not a corner office.

  But already, David had his mind set on doing something related to cities. So while still working as a lawyer he decided to complete his Graduate Record Examination (GRE) in preparation for going to planning school. Ultimately, he decided not to go back to school, but instead leave the firm and just figure things out. He left in 1992.

  After leaving, he did in his words, “nothing” for a few years. He lived off his savings, spent some time working with a bunch of guys cleaning up the Don River, and tried to figure out a way to put together a development project.

  Eventually he met a friend of the Goodman family and this led to an introduction to the Dundee Corporation.

  It was the early 90’s and nothing was happening by way of development in Toronto. The real estate industry was in a deep recession. Ask anyone who was “active” during this time. It was a painful time to be in the business. But the Goodmans told David that he if could find a suitable site to develop, they would invest. Lesson: Developers are constantly leveraging other people’s money.

  So David went out and found a site on a sleepy street named Camden in Toronto’s Fashion District. This is not the Camden Street of today, which has an Ace Hotel currently in the works. It was a dead zone. By this point we are in 1995 and few people believed that anyone would want to live on a downtown street like Camden.

  Given the perceived undesirability of the site and the continued lull in the market, David tied up 29 Camden for C$700,000 with a 2 year option. What this means is that he had 2 years to figure out if he actually wanted to close on it. He could put very little money down and get the project going before having to worry about carrying the land. It wasn’t until midway through sales that he actually went firm.

  It’s hard to imagine being able to do this in today’s competitive real estate market, but that was the market at the time.

  Of course, the flip side to all of this is that it also took him 2 years to sell about 20 condominium units (out of a total of 55), at an average price per square foot of $195. Today you could sell those units in 2 hours at $800 psf.

  Brad Lamb – who was just starting out at the time – was the broker on the project. And activity at the sales office was so scant that everyone would get excited even when a car would drive down Camden Street. That’s how dead it was in the Fashion District.

  Eventually Dundee got impatient. Sales were slow. A lot of money had been spent on marketing. And the partners didn’t believe that “the bump and grind of Queen Street” (original marketing pitch) was the right way to position the product. David was also in the midst of rebranding his company from Red Rocket (named after our transit commission) to Scrappy Dog Real Estate Investments. By that point Dundee came in and said: “You’ve fucked up this project. You’re out.”

  David had felt like he had made it and become a developer with Camden Lofts. But just like that – before construction had even started – he was off the project.

  The deal that David struck with his partners was that he didn’t want any money out of the project (it didn’t end up making much money anyways). But he wanted to stay involved and be able to call Camden Lofts his project. And so to this day, Camden Lofts remains the first development project of his very successful real estate career.

  But Camden Lofts didn’t solidify David as a real estate developer. After the fumble, David took on the role of managing a loft conversion for what turned out to be some pretty dodgy landowners. The total management fee was a princely $5,000, but David wanted to complete his own project from beginning to end. And so he did just that with Century Lofts at 365 Dundas Street East. He also spent a great deal of time learning Illustrator, Photoshop, and other design tools so that he could do all of the marketing himself. This is an experience that would later manifest itself in his company’s business model.

  After tuning his craft for a couple of years, David met his current business partner, Mark Reeve. Mark was a corporate real estate developer and planner, and they talked about doing something together. So they did, and the result was Urban Capital Property Group. Mark was also able to planning consult on the side and that helped fund their fledgling business as they worked on breaking into the development game.

  The first project to come out of this relationship was The Sylvia, which was also on Camden Street (#50). However, you won’t find this project on their website because it was done in partnership with developer Intracorp. The relationship ended up not being a productive one and both David and Mark vowed never again to be involved in a project that they weren’t actively managing themselves. That vow continues to this day.

  The first project that Urban Capital did on their own was the 66-unit Charlotte Lofts. It’s the first project they completed from A to Z. They sourced the site, secured the financing, worked on the design, marketed it, and constructed it. It was a success.

  The partners did well but the learning curve remained so steep that neither felt that they had really “made it” with this project. Indeed, my interviews have uncovered that this is a common experience amongst new developers. It can take a few projects before they really hit their stride and, in some cases, even make any money.

  But who ever remembers the stumbles?

  Today, Urban Capital has completed over 4,000 urban condominiums and has another 2,500 in the works. They have developed over $2 billion worth of real estate to become one of Canada’s most influential urban infill developers.

  Unlike other Toronto-based condo developers, they have branched out beyond Toronto: east to Montreal, Ottawa and Halifax; and west to Winnipeg and Saskatoon, with other cities on the horizon. Their mission is to act as an urban regenerator by bringing high design urban living to new markets across the country.

  They have come a long way since the days of Scrappy Dog Real Estate Investments. Clearly David is the furthest thing from “One File Wex.”

  You can follow Urban Capital on Twitter and on Facebook.

  Image: River City 2, Toronto

  ———————————————————

  This is the first post in my new blog series called BARED (Becoming A Real Estate Developer). More posts to come in the following weeks. Subscribe to stay in the loop.

  2016.08.15

• Dear City Council

  Kate Downing was formerly a planning commissioner in the City of Palo Alto. She recently resigned from her position and, about about a day ago, she posted her resignation letter on Medium. It has since gone viral.

  The reason it has spread so quickly, I think, is because it addresses the very same issues that so many cities around the world are facing: a lack of housing supply and eroding affordability.

  As a developer, I obviously have a vested interest in this matter. But to the extent that I can put that aside, I really do believe that our goal should be to build inclusive, rather than exclusive, cities.

  For instance, when I think of great cities such as New York and Toronto, I think of their history of taking in a large number of immigrants and then empowering them to climb the socioeconomic ladder. There’s something magical about that. One of my best friends likes to talk about this potential as “immigrant hustle.”

  But when we sterilize our cities by allowing only the incumbents to survive, I believe we place that socioeconomic potential in jeopardy. So for that reason, I am reposting Kate’s entire letter. I have bolded the points that stood out for me. Let me know what you think in the comments.

  ———————————————————

  Dear City Council Members and Palo Alto Residents,

  This letter serves as my official resignation from the Planning and Transportation Commission. My family has decided to move to Santa Cruz. After many years of trying to make it work in Palo Alto, my husband and I cannot see a way to stay in Palo Alto and raise a family here. We rent our current home with another couple for $6200 a month; if we wanted to buy the same home and share it with children and not roommates, it would cost $2.7M and our monthly payment would be $12,177 a month in mortgage, taxes, and insurance. That’s $146,127 per year — an entire professional’s income before taxes. This is unaffordable even for an attorney and a software engineer.

  It’s clear that if professionals like me cannot raise a family here, then all of our teachers, first responders, and service workers are in dire straits. We already see openings at our police department that we can’t fill and numerous teacher contracts that we can’t renew because the cost of housing is astronomical not just in Palo Alto but many miles in each direction. I have repeatedly made recommendations to the Council to expand the housing supply in Palo Alto so that together with our neighboring cities who are already adding housing, we can start to make a dent in the jobs-housing imbalance that causes housing prices throughout the Bay Area to spiral out of control. Small steps like allowing 2 floors of housing instead of 1 in mixed use developments, enforcing minimum density requirements so that developers build apartments instead of penthouses, legalizing duplexes, easing restrictions on granny units, leveraging the residential parking permit program to experiment with housing for people who don’t want or need two cars, and allowing single-use areas like the Stanford shopping center to add housing on top of shops (or offices), would go a long way in adding desperately needed housing units while maintaining the character of our neighborhoods and preserving historic structures throughout.

  Time and again, I’ve seen dozens of people come to both Commission meetings and Council meetings asking Council to make housing its top priority. The City Council received over 1000 signatures from Palo Alto residents asking for the same. In the annual Our Palo Alto survey, it is the top issue cited by residents. This Council has ignored the majority of residents and has chartered a course for the next 15 years of this city’s development which substantially continues the same job-housing imbalance this community has been suffering from for some time now: more offices, a nominal amount of housing which the Council is already laying the groundwork to tax out of existence, lip service to preserving retail that simply has no reason to keep serving the average Joe when the city is only affordable to Joe Millionaires.

  Over the last 5 years I’ve seen dozens of my friends leave Palo Alto and often leave the Bay Area entirely. I’ve seen friends from other states get job offers here and then turn them down when they started to look at the price of housing. I struggle to think what Palo Alto will become and what it will represent when young families have no hope of ever putting down roots here, and meanwhile the community is engulfed with middle-aged jet-setting executives and investors who are hardly the sort to be personally volunteering for neighborhood block parties, earthquake preparedness responsibilities, or neighborhood watch. If things keep going as they are, yes, Palo Alto’s streets will look just as they did decades ago, but its inhabitants, spirit, and sense of community will be unrecognizable. A once thriving city will turn into a hollowed out museum. We should take care to remember that Palo Alto is famous the world over for its residents’ accomplishments, but none of those people would be able to live in Palo Alto were they starting out today.

  Sincerely,

  Kate Downing

  2016.08.11

• Should we love bubbles?

  There’s no shortage of talk about a Canadian housing bubble:

  

  In Vancouver, the price of a single-family home (as of June of this year) increased 39% to C$1.6 million from the year prior. Does that constitute bubble territory?

  In an effort to stop prices from running away even further, I am sure you all know that the BC government has recently imposed an additional 15% transfer tax on Metro Vancouver homes purchased by foreign buyers (people who are not Canadian citizens or permanent residents).

  The data that I have seen (here and here) suggests that foreign buyers could make up somewhere around 5-10% of the market. Given that many will now get creative in terms of hiding their foreignness, I am not so sure this new tax will have a dramatic impact on affordability. But it certainly sounds nice if you’ve been grouchy about home prices and thinking “those damn foreigners.” We’ll have to see how it plays out.

  Having said all of this, if Vancouver is in fact in bubble territory, would that be so bad? Are we thinking about this the right way?

  Here’s an alternative viewpoint.

  I recently stumbled upon an old blog post by Tom Evslin (2005) called: Why we need bubbles. I discovered it via it Fred Wilson. Tom’s argument is that we need irrational exuberance because it provides the capital that allows for dramatic overbuilding. The overbuilding of things like rail infrastructure, internet infrastructure and – I’m adding this – housing infrastructure. And once this happens, it dethrones the incumbents and paves the way for future economic progress.

  Tom’s focus is on technology, but I couldn’t help but think of the parallels with city building. Is the proposed Rail Deck Park in Toronto so bold that it’s only possible during a period of irrational exuberance? Should Vancouver instead be working to dramatically expand its housing supply instead of trying to tax away a portion of demand? Is a period of irrational exuberance precisely the moment where we lay the ground work for our future successes?

  I’m not saying we’re in a bubble. I don’t believe in or know how to time markets. But I am asking whether the bubble headlines are missing the greater opportunity.

  2016.08.06