Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 1515

Below is my latest post from the TAS blog. You can find it cross-posted here .

Last week I wrote a post on my personal blog about housing policy in San Francisco . My argument was that the backlash against the tech community (for allegedly driving up real estate prices) is actually misdirected and that housing policy should be the target. 

The reasoning behind this is simple: More people are moving to San Francisco than new housing is being provided. And so regardless of whether you have tech workers or not, you have an environment where the rich are always going to outbid the poor for housing.

If you look at the numbers from the past 2 decades, San Francisco on average builds  1,500 new housing units a year . And yet the city gained approximately 25,000 new people between 2010-2012 (that’s roughly 8,300 people per year). So what you have is a perpetual housing supply shortage.

To correct this problem, San Francisco needs to start building. And I’m stealing this idea from Harvard economist Edward Glaeser, who wrote an article on this very same topic back in December of last year for Bloomberg (and a book called Triumph of the City). His argument was that “the surest way to a more equitable housing market is to reduce the barriers to building.”

Now, if you compare San Francisco’s situation to Toronto’s, we’re almost on the opposite end of the spectrum. Toronto doesn’t have a problem building. We’re building lots. So much so that it’s become fashionable to joke around and complain about all the condos going up in this city.

But it’s important to remember that all of these condos are making us a relatively affordable city by global standards. We have more people moving to this city every year than San Francisco and yet home prices are less. We’re also less expensive than Vancouver, where there are strong natural barriers to building, namely water and mountains.

So rather than complain, I’m going to be the contrarian. I like seeing new housing built. I like knowing that the neighborhoods I love in this city are becoming home to more and more people.

At one point, my home (which is in the St. Lawrence Market) was a “new development” and somebody could have fought and opposed it. But it was allowed to be built and I was allowed to move in. I’m thankful for that. And so my plan is to be just as gracious to the next person who wants to join the neighborhood.

Last weekend I posted a poll asking readers what they think the “capital of the world” will be in 2050 . It was really the 2nd half of a two part poll. The first one asked what people think the capital of the world is today. And the majority of people said New York.

While New York still came out on top in the 2nd poll, the most notable difference is the rise of Chinese cities. Behind New York is Shanghai, Hong Kong and Beijing. And in a way, this order makes sense to me. China would like to see Shanghai on top of Hong Kong, because it’s perceived as being more Chinese (Hong Kong is still too British). But both are still more economically important than Beijing.

Still, my own belief is that China is going to need to go through some structural changes before its cities really have a chance of dethroning New York (or London, depending on your vote in the first poll). And I think it has to do with openness, transparency and freedom. Fred Wilson probably put it best when he said to basically invest in whatever China blocks:

As our [Bitcoin] panel was winding down, Superintendant Lawsky asked what countries were doing it right. I didn’t answer that question but instead decided to talk about one that isn’t doing it right and brought up China and noted that a fantastic investment strategy would be to have invested in every Internet service that China has blocked. My point being that the services China likes to block are the really important ones that have been built on the Internet.

He then goes on to say that he believes there’s a strong correlation between innovation and freedom. And I would agree. So until China stops blocking the innovation that is likely going to drive the world forward, I think it’s going to struggle to assume a true leadership position.

What are your thoughts?

I just came across an interesting web app created by geographer and programmer Andrew Hardin that maps public transit travel times for San Francisco, Seattle, Boulder and Denver.

The app allows you to click on a location within one of these cities (or enter an address) and then receive a visual representation of travel times from that location.

Both public transit and walking are factored in, and the fastest of the two is then modeled. The public transit data is taken from each respective authority and is similar to the data used by Google Maps.

With these sorts of applications, I always wonder what it might look like overlaid with additional data points, such as home prices. Intuitively I would expect the best connected neighborhoods to also have some of the highest real estate values.