Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 1239

My condo has an east exposure. That means I get direct sun in the morning and no direct sun in the afternoon, once the sun has crossed over onto the other side of my tower.

But a funny thing happens in the late afternoon and early evening. The sun reaches just the right angle and begins to reflect off the apartment across from me. That apartment is about 11m away.

Once this happens, it then feels like I’m getting direct sun again. It floods my apartment. This may seem like a small thing, but I love it when this happens. It’s happening right now as I write this post.

So I can only imagine what it must have felt like for the residents of Rjukan, Norway when they got their first taste of winter sun back in 2013.

Rjukan is a small town of approximately 3,400 residents. It’s located about 2.5 hours west of Oslo and is situated within a deep east-west valley. 

As a result of its geography, the town is cast in shadow for about half of the year, from September to March. The elevation of the sun is simply too low for direct light to reach down and into the valley.

So what the town did was install a set of solar powered mirrors on top of the mountains . The mirrors – also called heliostats – track the sun and reflect it down into the town’s main square. Now the town gets winter sun.

Interestingly enough, many residents opposed the mirrors before they were built. They viewed it as a frivolous expenditure. Petitions and Facebook pages were created. But now that the mirrors have been installed, most of the naysayers seem to have changed their tune.

I think it goes to show just how important light is, but also how difficult change, of many varietals, can be.

Image:  Flickr

One of the questions that came up after my recent post about land pricing was: what is it going to take to develop underutilized land on the outskirts of city centers?

So today I thought I would talk about a new development project that was also discussed at the Land & Development conference I recently attended. I think will begin to answer this question.

The project today is known as the Rockport Weston Community Hub & Rental Building . And it’s going to include a community cultural hub, 26 live/work artist spaces, and 300 rental apartments. 

It’s located in the Weston neighborhood of Toronto, which is designated as a “ Neighborhood Improvement Area .” These are lower-income areas that the city considers to be “at-risk.”

Given this, rents are naturally lower here than in other parts of the city, which means that it’s basically infeasible to develop here. There has been no large scale development in this community since the 1970s!

To put some numbers to this, the developer said they were projecting rents somewhere around “two and a quarter.” So let’s assume for a second that the average apartment rents will be $2.25 per square foot. 

At this rate, it means that a 600 square foot one-bedroom apartment will have a face rent of $1,350 per month. This may seem fairly high, but it almost certainly wouldn’t be enough to get a project like this off the ground under normal market conditions. At least, that’s the case here in Toronto with current cost structures.

So what had to happen was a fairly complicated public-private partnership, which you can read all about here . But at a high level, there seems to have been 3 main economic factors that allowed this project to move forward:

1) The developer was able to acquire the land for cents on the dollar. As I said in this post , land is expensive. So this helps a lot.

2) The developer was able to make use of extra parking in an adjacent building. Assuming that underground parking could cost around $50,000 per stall, this is a huge cost savings.

3) Lastly, the project is benefiting from the public invest made in the airport rail link that now quickly connects this site to both Pearson International and downtown Toronto.

The moral of the story is that infeasible sites require some sort of subsidy or top up to make them work. Or, there needs to be an exceptional circumstance. Because if the rents aren’t there, nobody is going to build. It’s as simple as that.

That said, here’s one idea…

This discussion reminds me of a post I wrote a while back called, The hypocrisy of parking minimums . Frankly, I don’t understand why a city like Toronto still has parking minimums . If anything, we should have parking maximums .

Underground parking is a huge cost that has to get carried by purchasers and renters in a new building. For example, let’s assume that 300 apartment suites would require 180 parking stalls (ratio = 0.6). Assuming $50,000 per stall, that’s a $9 million cost.

So the second takeaway is that it’s probably time we took a good hard look at how we think about and plan for parking in our cities. Especially since the entire mobility space is being quickly disrupted.

Image: Rockport

Today I am one step closer to not only going cashless , but also going walletless.

This is going to be old news for those of you in the U.S., but yesterday, all 5 of Canada’s big banks signed on to Apple Pay . Before yesterday, you had to have an American Express credit card – which I do not have – to use Apple Pay in Canada. Now you can use a debit and/or credit card from these institutions .

What’s great about Apple Pay is that it can be used anywhere that contactless, or tap, payments are currently accepted. And since this is pretty commonplace in Canada – more so than in the U.S. I think – Apple Pay can, at least in theory, be used almost anywhere.

Being the early adopter and geek that I am, I went out for lunch today determined to test out Apple Pay. As I pulled out my phone to pay for lunch, the guy told me: “That’s not going to work. Other people have tried before.” But I tried anyway and, boom, it worked like magic. The transaction amount popped right up on my screen.

I am pretty excited about this for a couple of reasons. 

Firstly, it’s more secure. Apple Pay works in tandem with the iPhone fingerprint scanner. So even if I were to lose my phone, nobody would be able to charge anything to it. That’s not the case with a lost wallet. Anyone can tap a credit card to buy something.

Secondly, Apple is working on allowing reward cards to be stored in its Wallet app. I am terrible about remembering to collect rewards and use gift cards, so anything that consolidates and simplifies is a positive in my view.

Thirdly, I like to go to the gym and go cycling with just my phone and headphones. I don’t like carrying around my wallet. I’m always afraid that I might lose it or someone might steal it from a locker. So I try and leave it at home. Now I can do that and still pay for stuff – assuming my battery will last that long.

Of course, it’ll be awhile until we can all really go walletless. I’m not aware of any significant push to digitize government IDs. But it will happen. (Does that mean there will be no more fake IDs for underage drinking?)

As this transition happens, I can’t help but think of all the small businesses that only accept/use cash and probably hide some of their earnings. I suspect it’s going to be a lot harder to do that in the future.

I’m also thinking about how transit agencies are going to have to quickly get onboard with this technology. Here in Ontario, we’re still rolling out a card-based payment system . And cards are about to disappear; perhaps sooner than most people think.

Image: Apple