Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 1269

In yesterday’s post about the city as an egg , I received a comment basically saying that I use this blog to carefully curate my own image and that I would never argue against “dumb Toronto planning” because, after all, I’m a developer. I am going to do what breads my own butter.

I welcome intelligent debate on this blog. That’s why it is open to anyone who would like to comment. But since I’ve received similar comments in the past, I thought I would use the opportunity to talk broadly about my approach to blogging.

Firstly, there will always be some level of curation involved. That’s inevitable. We see it all over social media. But I’m a big believer in transparency and I try to do exactly that on this blog. I am keen to push the boundaries in this regard.

At the same time, part of what makes blogs unique is that they’re often personal. That is the origin of blogging. Some of my favorite blogs to read are the ones that have figured out how to combine a particular niche topic with personal stories. And since ATC is ultimately my personal blog, I am going to continue taking that exact same approach.

Secondly, I only write about things that I’m passionate about. I get asked all the time to write about and promote specific projects, causes, and events. But almost all of them do not get written about it. Because if I don’t care about it, then I’m not going to write about. It’s as simple as that.

Thirdly, I believe in positivity over negativity. I believe that optimists, not pessimists, change the world. President Obama won his first term with a message of hope, not despair. To me, that is a stronger motivator.

I’ve been told before that I’m overly optimistic and that my youthful exuberance will one day wear off. Boy, I sure hope it doesn’t. Because would you rather have a beer with someone who is optimistic or someone who is pessimistic? I will always take the former.

However, this is not to say that I want to be blind to the realities of the world. Last summer I disagreed with Toronto’s decision to rebuild the elevated Gardiner Expressway East along the waterfront , and I continue to disagree with that decision. 

When I believe something is a mistake, I am happy to make it public and put it in writing on this blog. But as a developer, I suppose I have certain biases working against me. That’s just the way it is.

In any event, this is my rough and ever-evolving approach to blogging. As usual, I welcome any and all comments.

This week I have been thinking and reading about monocentric and polycentric cities. In urban real estate economics, the monocentric city model has historically been an important economic model. Developed in the 1960s, it attempts to explain land use in cities with one core, or central business district (CBD).

In its most simplest terms, the model states that as you move further away from that core, land prices will fall. But since retail and employment need to be at the center of large catchment areas, they will remain in the middle, while the residential will naturally spread out.

When you begin to factor in transportation costs, there is an argument to be made for why inner cities neighborhoods were often poorer in North American cities (no car; higher transportation costs) and why the suburbs were often wealthier. In this latter case, the rich wanted to consume more home/real estate and their transportation costs weren’t as significant. They had cars and subsidized highways in which to drive them on.

Of course, there are many ways in which you could argue against the above. Today,  urban neighborhoods are some of the most desirable areas in many cities. 

But perhaps the most obvious thing to question is the idea that cities only have one central business district. I mean, just look at all the employment nodes in Toronto . Yes, downtown Toronto is still the dominant zone, but could we really be considered monocentric?

From what I remember, the model had mechanisms for dealing with polycentricity. But at the same time, so much has changed since the 1960s. The central business district with its big department store was only just getting introduced to the likes of fully enclosed, climate-controlled suburban malls. And of course today, we are now living in a world of Amazon Prime and independent workers .

So what does this mean for cities?

Well, as I was reading up on this topic I stumbled upon this diagram by architect Cedric Price (1934-2003):

I wish I knew exactly when this diagram was created, but I wasn’t able to find that online. In any event, the diagram uses different kinds of eggs – boiled, fried, and then scrambled – to explain the urban morphology of cities over time.

In the ancient world, cities had a clearly defined core and a clearly defined perimeter – often a wall for defence (boiled egg). In the 17-19th centuries, cities started to expand outwards through the advent of technologies like rail. This gave them a more irregular shape (fried egg). And then finally, Cedric argues that the modern city had, or would, become all mixed together like scrambled eggs.

I wouldn’t say that our cities have become completely scrambled. But I would agree that we are moving away from the simple fried egg of a city (or monocentric city model). So I guess the big question is really: How scrambled do you think we’ll get?

Zillow.com recently published some research where they looked at U.S. home prices broken down according to location: urban, suburban, and rural.

Here’s what they found:

As you can see, urban homes across the U.S. largely trailed their suburban counterparts in terms of absolute value up until the end of 2014. At that point, urban homes then surpassed suburban homes for the first time in the last two decades. (I wonder if this is a first or there was another crossover point before the late 1990s.)

But if you dig a little deeper and look at both the rate of appreciation and prices per square foot (as opposed to just absolute value), urban home prices appear even stronger. 

Here’s a snippet from Zillow’s post :

“Over the past five years (2010-2015), average urban home values have grown 28.4 percent, compared to 21.1 percent for suburban home values. In the past year alone, U.S. urban home values grew 7.5 percent, compared to 5.9 percent for suburban homes.

On a per-square-foot-basis, homes in urban areas nationwide used to be worth roughly the same as suburban homes, before a gap started emerging in the late 1990s which has become progressively wider over the past roughly two decades. Currently the gap stands at 24.5 percent, with suburban homes valued at $156 per-square-foot and average U.S. urban homes worth $198 per-square-foot.”

And here is that same chart showing per square foot prices:

Everyone who reads this blog knows that there is a growing interest in urban centers. But if you look at the above charts for specific cities, there are still many cases where urban home prices are well below suburban ones. 

To me, that serves as a reminder of the spikiness of this urban transformation, but also that it is likely still in its infancy. As recent as 20 years ago, Toronto largely didn’t believe that people would want to live downtown in modern apartments. Today we take that for granted.

So even with all of the gushing about urban centers, I still think we are only just getting started when it comes to creating the great urban neighborhoods of the future.