Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 1199

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.

Things have been far too serious around here this week with talk of interest rates , unrealized gains , flooding , and the EU referendum . So let’s change that and do a bit of an architecture roundup. It has been on my agenda for a few weeks now to move toward some sort of regular post about architecture and design.

1.

DUS architects of Amsterdam recently completed a fully 3D printed urban cabin (pictured above). It totals 8 square meters and was printed using “bio-plastic,” which means the entire structure could be shredded and reprinted into something else. The Urban Cabin is a research experiment, but the thinking is that 3D printed homes could serve as an “on-demand housing solution” in rapidly urbanizing cities, in disaster areas, and so on. That said, the niche use case can quickly become the mainstream use case.

2.

REX has just released their design for a Performing Arts Center on the World Trade Center site . The design is a minimalist “ mystery box ” that provides an infinitely customizable interior canvas for directors. I have long been interested in the work of REX because of the hyper-rationale approach they quite often bring to architecture. It’s about allowing architecture to emerge from the project’s constraints, programmatic requirements, and so on. Here’s a video of the project.

3.

Finally, this Swiss chalet (not the restuarant) in the town of Anzère has got me pretty excited about the upcoming snowboard season. It was designed by the Amsterdam-based firm SeARCH . And I love the dichotomy between the raw exposed concrete and the softer wood details. Also note how the garage, situated beneath the house, is built into the mountain. It is connected to the house above via an elevator that is also carved into the mountain. Sadly, my ski retreats don’t typically involve James Bond-style lairs.

Image: Copyright Ossip

Real estate is a highly levered asset class, which means that pricing is sensitive to interest rate changes.

Larry Summers recently published a post on his blog where he argued that the Fed (US) is being far too complacent about their ability to respond effectively to a future recession. He sees this as their biggest monetary policy challenge going forward.

Given the potential impact to real estate and city building as a whole, I thought I would summarize some of his key points:

• Private sector GDP growth in the US averaged 1.3% over the last year
  

• Since the 1960s, this level of tepid growth has typically foreshadowed a recession
  

• Larry sees > 50% chance that the US economy will enter a recession in the next 3 years
  

• 400-500 basis points of monetary easing is usually needed to counter recessionary pressures
  

• The Feds will likely not have this much room to play with when the next recession comes along
  

I don’t think anyone could have predicted that rates would remain so low for so long . (10-year Treasury = ~ 1.6% at the moment.) Still, my view has been that rates in Canada and the US won’t be posting meaningful increases anytime soon. And Larry’s post reinforces that for me.

What’s your view?