Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 115

I spent the past week listening to this Bankless podcast with Vitalik Buterin (the Canadian programmer and co-founder of Ethereum). It took me a week because I was listening to it off and on while I was in the car, headed to and from One Delisle and other meetings. But it's a fascinating episode. I think Vitalik is easily one of the most important minds of our generation.

But let me be honest and say that I wasn't able to follow everything in the podcast. I clearly still have a lot to learn when it comes to cryptography. For this reason, I'm not going to recommend that you all watch/listen to the episode — not unless you're prepared to go in deep. This is also supposed to be a blog for city builders (at least most of the time).

But I did want to share one takeaway that I found interesting.

In the episode, Vitalik describes Ethereum as the world's ledger. This maybe won't mean very much if you're not familiar with crypto, but the goal is a universal, permissionless, and censorship-resistant place for recording and securing basically everything: property title records, financial assets, AI-generated cat videos, and so on. Put another way, Ethereum wants to become a foundational layer of trust for the world.

Then, later in the episode, they somehow get onto the topic of dictators. There was a general acknowledgment that dictatorships do have their benefits, but that they also have obvious downfalls. Ideally, we would have a best-of-both-worlds scenario. We want the efficiencies of dictatorships, with all of the benefits of capitalist democracies.

Vitalik refers to this scenario as "dictators in a box," and he argues that we already have them: they're called entrepreneurs. When you start a company, you get to run within your box, and that is the power of entrepreneurship. But importantly, these boxes exist within a broader framework that includes the rule of law, property rights, freedom of speech, and all the other benefits of capitalist democracies.

This is how Ethereum sees itself — as a foundation on top of which "dictators in a box" can build new ideas, businesses, and opportunities. And because of this layering, it will be Ethereum that provides the backstop against people doing bad things, like stealing someone's crypto or falsely claiming that they hold title to a property when they don't.

I found this analogy fascinating, and I think it offers a glimpse of what's at stake if/when Ethereum becomes what it's aiming to become — the world's ledger.

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Yesterday evening I sat on a panel at The Canadian Real Estate Investor's 2nd annual Unpacking Multiplexes event. I'm not sure that I would construe myself as an expert on multiplexes , but I was asked to talk from more of a macro perspective and also talk about our productized rental housing strategy . And so that's what I did. A big thanks to Daniel Foch and Nick Hill for inviting me.

Two things stood out to me from the sold-out event (~250 people).

First, there's a massive amount of interest in building multiplexes in Toronto. In attendance were people ranging from experienced builders to people who are just starting out and looking for their first multiplex site. This breadth of interest seems to be one of the features of this housing typology.

It's small enough that it's accessible to small developers or even individual homeowners who maybe want to live in one of the homes and rent out the rest. At the same time, there are developers who used to be at big shops, are now on their own, and want to build a big business with this scale of housing. Both are good outcomes.

Second, this entire push for more housing feels very much like an iterative process. The City of Toronto is monitoring these new policies, watching how the market responds, and then making adjustments as needed. This is the way to do it, and it should make us all feel optimistic about the future of our city.

We're on our way to creating more missing middle housing — in every sense of the word middle .

RBC published a special housing report this week where they argued that, " Canada isn't in a housing starts slump — Ontario is ." The report is based on new figures from the Canada Mortgage and Housing Corporation that show Ontario lagging behind the rest of the country when it comes to new homes.

The reason for this is the paralysis of the pre-construction condo market in the Greater Toronto Area, which, up until recently, has been the biggest contributor to new supply — both when it comes to for-sale homes and for-rent homes. ( This July rental housing report by BILD estimates that about 39% of all condominiums in the GTA were rented out as of 2022.)

My favorite chart from RBC is the one below, which overlays Toronto condominium starts with pre-construction sales from 18 months earlier. Naturally, the two are pretty closely correlated. Sales beget starts. What this tells us is that, at this point, condo starts are going to remain depressed until at least 2027.

But in reality, starts are likely to remain depressed for even longer. The market still needs to absorb the current pipeline of projects under construction. I have said before that this could take another two years. And if that's right, we could be into 2029-2030 before condo starts turn around, given the lag between sales and starts.

Some of this supply will, of course, convert to purpose-built rental. But I suspect the conversion rate will end up much lower than most people are currently hoping. Only a minority of projects underwritten as condominiums will be able to make the switch. By default, this means we will eventually enter a period of severe undersupply.

But as Robert Hogue says in his RBC report, "the full impact of the current slowdown in housing starts won't be felt for years in Ontario." And this is absolutely true. It's an insidious problem right now. We currently have more supply delivering than we have buyers and renters. But just wait. It's coming.