Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 1339

Back in February of this year (2015), Philip Oldfield , who is an Assistant Professor of Architecture at the University of Nottingham, gave the following talk at the Illinois Institute of Technology.  Click here if you can’t see it below.

[youtube https://www.youtube.com/watch?v=lOfkx39soIs?rel=0]

If you’re interested in cities and how tall buildings might make them more sustainable, you’ll enjoy it. It’s filled with a number of interesting stats and takeaways, and it’s about an hour long.

This morning venture capitalist Fred Wilson wrote a post on his blog talking about the gig economy and Hillary Clinton’s economic speech last night. 

Here’s a snippet from Clinton’s talk :

Meanwhile, many Americans are making extra money renting out a small room, designing websites, selling products they design themselves at home, or even driving their own car. This on-demand, or so-called gig economy is creating exciting economies and unleashing innovation.

But it is also raising hard questions about work-place protections and what a good job will look like in the future.

So, all of these trends are real and none, none is going away. But they do not determine our destiny. The choices we make as a nation matter. And the choices we make in the years ahead will set the stage for what American life in the middle class and our economy will be like in this century.

The headlines this morning are making it seem like Hillary Clinton is taking direct aim at companies like Uber. But the transcript suggests that she’s being far more balanced than that: these new companies are creating exciting opportunities, and they are not going away, but there are still things to figure out.

That’s basically how I feel.

Take, for example, Airbnb. I think Airbnb is a great idea and company. A lot of my friends use it both as consumers and as suppliers of space.

But for many (most?) condos in Toronto, owners are strictly prohibited from renting out their units on leases that are less than six months. It’s a direct ban on short-term leasing and it’s written into the Condo Corporation’s Declaration.

And there’s good reason for that. Who wants to buy a condo only to find out that next door is being operated as a nightly hotel? Most people would even prefer that their neighbor is an owner rather than a renter.

That doesn’t mean I believe Airbnb should not exist. I think we’ll likely end up getting more transparent about how buildings (and portion of buildings) are operating, as opposed to it being a shadow economy. And that could help.

If you have any ideas for how companies like Airbnb might be better integrated into urban life, I would love to hear from you in the comment section below.

the traffic jam by Phoebe Eve on 500px

https://500px.com/embed.js

In 1968, Garrett Hardin wrote an article where he coined the term: the tragedy of the commons . Hardin was an American ecologist who was obsessed and concerned with the prospect of human overpopulation.

In his article, the term tragedy of the commons was used to describe a situation where individuals – all acting independently and in their own self-interest – actually end up behaving in a way that is detrimental to the larger group and that negatively impacts some sort of common resource.

Just in case, here’s another definition via Investopedia :

An economic problem in which every individual tries to reap the greatest benefit from a given resource. As the demand for the resource overwhelms the supply, every individual who consumes an additional unit directly harms others who can no longer enjoy the benefits. Generally, the resource of interest is easily available to all individuals.

So what would be an example of a tragedy of the commons?

You may not have thought of it in these terms, but I bet you that everybody reading this blog has experienced one.

I will give you two examples.

1. The first is that of electricity consumption. 

In most condominiums, there are two types of ways that electricity gets billed and paid. Either the whole building gets one bill (master metering) or each individual resident gets a bill (submetering). 

In the case of master mastering, each resident’s consumption isn’t tracked and so nobody knows who is consuming what. But in the case of submetering, each individual resident only pays for the electricity that they use.

Not surprisingly, the data shows that submetering can cut electricity consumption by 10 to 30%. That’s because it creates a 1:1 relationship between usage and cost. There’s now a strong incentive to conserve.

With master metering, there isn’t a 1:1 relationship between usage and cost. The additional burden/cost of consumption actually gets shared by everyone else in the building. And since each individual is looking to maximize their own benefit, they lose the incentive to conserve. As a whole, this makes the entire group worse off.

2. The second example is that of congestion on public, un-tolled roads.

In most cities, public roads are a resource that is “easily available to all individuals” (to use Investopedia’s terminology). They are basically free. The marginal cost of driving another kilometer to work on a road is basically nothing (other than a bit of gas and some time).

What this does is create a situation where individuals – in their pursuit of maximum individual benefit – start to overload the road. Everybody just wants to get where they need to go and there’s no incentive to conserve the resource (i.e. the road). Once again, the result is that the entire group becomes worse off.

That’s why building more road rarely/never works. You’re simply increasing a resource that is easily available to all individuals. What we should instead be doing is looking at submetering our roads (i.e. pricing our roads). It’s been proven time and time again to reduce road congestion basically overnight.

I had never heard of the term tragedy of the commons before today, but I like it a lot. So the next time you’re stuck somewhere in traffic, you can now scream to yourself: What a tragedy of the commons!