Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 1318

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Chamath Palihapitiya is a Sri Lanka born, Canada educated, venture capitalist in Silicon Valley, who made a boatload of money as one of the early employees of Facebook. He now runs a VC firm called Social + Capital  and owns part of the Golden State Warriors .

The other night he was interviewed at a StrictlyVC event in San Francisco and I think that many of his comments would also be of real interest to the Architect This City community. He’s super passionate in interviews and always fun to listen to.

Below is what he had to say about the San Francisco startup scene. It really speaks volumes about what people will put up with in order to live in an awesome place/city that they love. All of his responses below are from this TechCrunch article .

“The city has to be doing more, around transportation, around housing… You have to get rid of the nimbyism and you need to quadruple, if not quintuple, the amount of housing. You need to tell that engineer from the University of Michigan that he can live here on a salary of $80,000.

[In the meantime], we look at our startups, and the minute that they start to spend more than 15 percent of their burn – good money that we give them – on rent, a huge red flag goes up. When they, on a per-head-count basis, are spending so much, we start looking at the productivity of the technical team. And if it’s good but not great and they’re spending this insane amount of money [versus] a different team in Redwood City, we start to ask ourselves: “Are you so convinced that success is going to happen in this city at 1.5x the cost?”

Because for every dollar that someone in Mountain View or Redwood City is raising, you [in San Francisco] have to raise one-and-a-half to two times that just to get to the same point. So you’re cutting your half life in half. To prove that you can take an Uber from some fuckin’ shitty bar to another shitty bar? Like, I don’t understand.”

And here he talks about the possibility of his venture firm also getting into the real estate development business. I couldn’t resist blogging about this.

“We made a big decision with our last fund to build an organization that looks really different than a venture firm, and that organization is going to be this hybrid, bastard stepchild of Berkshire Hathaway and Blackstone and BlackRock.

What I mean by this is that we want to have a large permanent capital base and we want to make really long, discontinuous bets on companies and sectors and trends.

And one of the things we talked about was having a real estate fund …[because] we owe it to our companies to alleviate some of these problems when no one else is going to. If we went and built one million square feet somewhere of mixed use, where you work and live, and we rethink what it means to have a modular living environment for a millennial cohort that wants to work at companies and doesn’t necessarily have kids, we can do that in a way and give that back to our CEOs as a benefit of working with us.

And you can probably make the economics work. Because we only really care about the equity of the company anyways. And the equity in the real estate will take care of itself if you take the 30-year view. So we’re at the point now where we’re like, wow, we should raise a few billion dollars and get into the real estate business and solve this problem systematically for our companies. And maybe in that, it becomes a blueprint for how others should do it. We’re just basically going to act as our own city-state and decide how to do it ourselves.”

It’s interesting to think about what the economics might look like if your primary goal is simply to provide space to your portfolio companies (entrepreneurs) so that they get more (financial) runway and, therefore, have a greater chance of success. I’d love to see that pro forma .

I just got my tickets for NXT City Night , happening Thursday, September 24, 2015 at 6:30pm here in downtown Toronto.

If you’re not familiar with NXT City Prize, it’s an annual urban design competition where young Canadians (35 years of age or younger) submit ideas to improve the built environment. The top submissions win a total of $9,000 in prize money and the winning idea gets paired up with the City of Toronto work on actually implementing it. That’s the best part.

The 2015 finalists have already been announced, here , but the top submissions will be announced at NXT City Night. The Chief Planner of Toronto, Jennifer Keesmaat , will be there, along with the competition’s very impressive jury .

I think it’s important to keep in mind that a lot of what makes cities great often happens through citizen-led grassroots movements.

The High Line in New York – which today attracts over 5 million visitors a year and is believed to be responsible for over $2.2 billion in new economic activity – was really the work of 2 friends who thought that preserving and repurposing the High Line was a cool idea. Which is why in 1999 they founded a non-profit called Friends of the High line. Amazing things happen when people and passion get involved.

So I would encourage you  to grab a ticket and join me at NXT City Night next week . Tickets are $25, but if you use the coupon code ATHISCITY , you’ll get $5 off your ticket :)

The event is also taking place in a spectacular old warehouse building at 56 Maud Street (formerly St. Andrew’s Market Hall). That alone is reason enough to come. I’ve been inside before. Get your Instagram ready. But if that’s not enough, there’s also:

• Open bar  including Steam Whistle beer and Pillitteri Estate wine

• Catering  from Oyster Boy, Kanpai Snack Bar, Thoroughbred and many more

• Art installations  by Wayward Collective

• Beats  by Jesse Futerman and A Digital Needle

• Local wares  from GetFresh, Shopify, Spacing Store and Swipe

I hope to see you there. Make sure to tweet at me if you’ll be there so we can connect in person.

Daniel Hertz of City Observatory recently published an interesting post talking about what makes American zoning unique compared to the rest of the world . It is based on the conclusions of a book published earlier this year called Zoned in the USA .

Here are 2 snippets that I liked from his post:

Hirt’s major claim is that what really sets American zoning apart is its orientation, explicit or implicit, to putting the single-family residential zone at the top of the hierarchy of urban land uses. Not only are single-family zones listed first in many zoning codes, but they make up significant pluralities, or even majorities, of total land area in most American cities. Interestingly, Hirt points out that this wasn’t necessarily true when zoning was first introduced: New York’s famous first zoning law didn’t even have a single-family zone at all.

As Hirt points out, Americans appear to be unique in believing that there is something so special about single-family homes that they must be protected from all other kinds of buildings and uses—even other homes, if those homes happen to share a wall. The recent revolt in Seattle over a proposal to soften that city’s single-family districts , in other words, would not be possible anywhere else in the world, not least because very few people live in single-family districts to begin with.

I don’t know if Canada is covered in the book, but we clearly share many similarities with that of the US.

I would say more, but at this point in the day I should probably rest my eyes and stop looking at a computer screen. Hopefully we can continue this discussion in the comment section below.