Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 1008

This is a fascinating study by Issi Romem about the characteristics of cross-metropolitan migration in the United States. The key findings are that in-migrants to expensive coastal cities tend to have higher incomes and more education than the out-migrants, and that the opposite is true for the less expensive cities in the US. “Expensive” means expensive housing.

Here is the income chart:

Let’s use San Francisco as the example since it’s the most expensive metro (all the way to the right on the x-axis). The way to read this is that on average, from 2005 to 2016, in-migrants to the San Francisco metro area earned $12,640 a year more per household (y-axis) after they arrived compared to out-migrants before they left. This chart shows the difference between in and out incomes.

Take note of Miami which is sitting at a similar place to New York and Los Angeles on the horizontal income line, but has home values similar to Phoenix, Chicago, and Philadelphia.

Now here’s the education chart:

Similarly, it is showing the difference in educational attainment between in and out migrants.

So what does all of this tell us? 

Well, it tells us, among other things, that US metros are continuing to sort based on income and that this process of polarization is probably contributing to home price appreciation. Because even if the incomes of current residents aren’t growing, these “expensive cities” are effectively swapping out poorer residents for richer ones. That, alone, would mean more money for expensive homes.

For Issi Romem’s full article, click here .

Sidewalk Labs is currently building out a platform called Replica that will support them in their development plans here in Toronto. Replica is : 

“a user-friendly modeling tool that uses anonymized mobile location data to give planning agencies a comprehensive portrait of how, when, and why people travel in urban areas.”

Here is a preview of the Replica dashboard showing a section of Main Street in Kansas City. I hope the animated GIF shows up for you.

The platform uses a combination of mobile location data (~5% of the population) and on-the-ground checks, typical stuff like manual traffic counts and transit boardings.

The goal is to understand in real-time who is using a street, as well as how (driving? cycling?) and why (going to work?).

Their introductory blog post obviously stresses the importance of personal privacy, but I am curious how they determine where people are going.

I suppose if they pair journeys with destinations (and the durations at those destinations) they can make reasonable assumptions around the why.

I think the benefits to all of this are clear. But does any or all of this worry you from a privacy standpoint?

Shaun Hildebrand (Urbanation) and Benjamin Tal (CIBC) published a report today called, “ A Window Into the World of Condo Investors .” In it they revealed that last year (2017 data) no less than 48% of the Greater Toronto Area’s newly completed condo units were closed on by “rental investors.” In other words, almost half of the units became new rental supply.

This stat was not surprisingly turned into clickbait-y type headlines like, “ Half of Toronto condos bought last year were by investors ”; whereas an alternate headline might read: “Half of Toronto condos completed last year became new rental housing.” Not as jarring, I know.

In any event, there are a bunch of other interesting stats in the reports. Here are a few of them:

- 80% of all new home sales in the GTA last year were condo.

- Average resale condo prices (per square foot) increased by 26% last year and rents grew by 9%.

- Over 20% of condo investors purchased their property with no mortgage.

- Average down payment made by investors was 20%; non-investors were closer to 15%, likely because of mortgage insurance and other factors.

- Out of the condo investors who took possession in 2017 with a mortgage, no less than 44% are in a negative cash flow position – meaning their rental income isn’t covering their carrying costs. 

- The returns, which the report calls exceptional, have been coming in the form of price appreciation.

- As a stress test for the market – what if all these negative cash flow investors suddenly sold their condos? – the report also estimates that if you took all of the rental investors who closed in 2017 with a mortgage and who are in a negative cash flow position greater than $500 per month, it would represent only 3.4% of the total annual supply of condos (both new and resale product).

If you would like to check out the full report, you can do that over here .

Photo by Scott Webb on Unsplash