Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 1256

Last fall, David Ticoll (who is a research fellow at the Munk School of Global Affairs at the University of Toronto) published a thorough discussion paper called Driving Changes: Automated Vehicles in Toronto . 

If you’re interested in driverless cars, and I know that a lot of you are, then it’s definitely worth a weekend read. It’s fairly long. He gets into the various automation levels, the transition period, the implications for policy makers, the benefits, and so on.

Here’s a quick snippet on the topic of benefits:

“This report provides bottom-up analysis based on Toronto-specific data. The result is a conservative estimate that were AVs to be at a 90% adoption rate in Toronto today, the result would be annual savings of $6 billion, or 4% of the City’s $150 billion gross domestic product. This includes $1.2 billion from reduced collisions, $2.7 billion out of congestion costs, $1.6 billion from insurance, and $0.5 billion from parking fees and fines. AVs will provide other quantifiable social and economic benefits that range from fewer deaths and hospitalizations thanks to lower particle emissions, to productivity gains in many business sectors.”

But of course there’s the question of: when will this happen? Below is a chart from the paper that was assembled using various consultant/analyst predictions. Based on this, we’re still over a decade away from the consumer adoption of automated vehicles.

However, these are just estimates and history has shown us that the adoption rate for new technologies has been increasing over time. Below is a chart by Michael Felton, which is also from the paper, that shows this phenomenon. Take a look at the telephone in comparison to the internet.

Maybe I’m being overly optimistic (it wouldn’t be the first time), but consumer-facing driverless cars, at least to me, feel pretty close to the horizon.

John Maeda – Design Partner at venture capital firm KPCB – recently published the second and 2016 edition of his #DesignInTech Report . I shared his first one almost exactly a year ago. His core thesis is that we are heading towards a world where technology, business, and design become closely integrated – in school, in business, and so on. Throughout the report he looks at the increasing impact that design and designers are having within the startup ecosystem. Here are a few verbatim bullet points: - Design isn’t just about beauty; it’s about market relevance and meaningful results. - 36% of the top 25 funded startups are co-founded by designers, up from 20% in 2015. - The general word “design” will come to mean less as we will start to qualify the specific kind of design we mean. - Currently design education lags the technology industry’s needs for data-oriented, coding enabled graduates with business acumen. - We must consciously invest in education to develop a more hybrid perspective on creativity in the 21st century: Technology x Business x Design. - President Obama’s signing of ESSA (Every Student Succeeds Act) into law in 2015 is a positive sign: by turning STEM into STEAM (adding Art) in K-12 education as a US priority. As somebody who studied design (architecture), business, and computer science (briefly, before switching to architecture), I probably have a bit of a biased view here. But to the extent that I can be objective, I really see this as the future. I am a big supporter of the transformation from STEM to STEAM . Below is a quote that Maeda uses to end his report, which I will also use to end this post:

“Engineers are efficient problem solvers. Business people think short term. Designer want things to be elegant and beautiful. All three need to create collaboration and harmony, and honor the value each other brings. There needs to be a new kind of ‘multi-dimensional’ approach to design that is yet to be invented.” – Linda Holliday

In 1933, the United States Congress created the Home Owners’ Loan Corporation (HOLC). With foreclosures rising as a result of The Great Depression, the task of the agency was to provide new low-interest mortgages to both homeowners and private mortgage lenders. Between 1993 and 1936, the agency served about one million households.

By 1935, the parent company of the agency (the Federal Home Loan Bank Board) decided to initiate something called the “City Survey Program.” The idea was to look at local real estate trends – including the racial and ethnic composition of the country’s largest cities – in order to get a better understanding of how to manage all of these outstanding loans.

One outcome of this program was the creation of the HOLC’s infamous “residential security maps.” (Philadelphia’s is shown at the top of this post.)

These were maps that categorized city neighborhoods according to 4 grades. Grade A neighborhoods (green) were the best ones. They were ethnically homogenous and had room to be further developed. Grade B neighborhoods (blue) were the second-best ones. They were already completely developed, but were still considered desirable. Grade C neighborhoods (yellow) were starting to decline and showed an “infiltration of a lower grade population.” And finally, grade D neighborhoods were considered “hazardous” and colored in red. These neighborhoods had low homeownership rates, old crappy housing, and an “undesirable population”, which, at the time, largely referred to Jews and African Americans.

Some have argued that the HOLC and their “residential security maps” are what kicked off systematic mortgage discrimination in America’s inner city neighborhoods – later referred to as “redlining.” This was the practice of denying credit to people who lived in these undesirable neighborhoods (and even to real estate developers who wanted to build in these undesirable neighborhoods).

But University of Pennsylvania professor Amy Hillier has argued that these maps simply reflected the ethos of the time period. Using a sampling of HOLC mortgages, she found that 62% of them were issued to grade D (red) neighborhoods . The agency, itself, was not actually redlining in practice.

Furthermore, she also looked at private mortgages issued in Philadelphia between 1937 and 1950 and found that security grade rating actually had no impact on the total number of loans issued. She did, however, discover slightly higher interest rates for properties located near and in the bottom security grades.

All of this is to say that “redlining” is likely not the only culprit for inner city decay. There are other factors at play.

To that end, the National Bureau of Economic Research recently published a working paper, which I discovered through CityLab, called, “ Racial Sorting and the Emergence of Segregation in American Cities .” The key finding here is as follows:

“Our preferred estimates suggest that white flight was responsible for 34 percent of the increase in segregation over the 1910s and 50 percent over the 1920s. Our analysis suggests that segregation would likely have arisen in American cities even without the presence of discriminatory institutions as a direct consequence of the widespread and decentralized relocation decisions of white urban residents.”

In other words, it wasn’t just mortgage discrimination; it was also just general discrimination. That actually makes a lot of sense, because, if you think about it, the former couldn’t have occurred without the latter being present.

Here’s how the research paper puts it (via CityLab ):

“Policies that reduce barriers faced by blacks in the housing market may thus not prevent or reverse segregation as long as white households have the ability and desire to avoid black neighbors.”

(Note: Most of the information and data used in this post was sourced from the work and research of Amy Hillier .)