Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 171

Since 2009, policymakers in Minneapolis having been implementing land use changes to encourage more housing supply. Some of these changes have included eliminating parking minimums , encouraging multi-family buildings up to 6 storeys on commercial corridors, establishing height minimums in high-density zones, and permitting triplexes on all residential lots. It's, from what I can tell, the type of stuff that many cities have now done or are looking to do. But it seems to have worked remarkably well in Minneapolis. According to The Pew , between 2017 and 2022, the city issued permits for nearly 21,000 new homes and nearly 87% of them were for homes in buildings with 20 or more suites.

This is interesting. It tells us that the triplex policies don't seem to be doing all that much, but that the market has certainly taken to larger multi-family projects. This is an accomplishment. Even more importantly, though, is that it seems to be having a measurable impact on average rents. During the same time period as above, Minneapolis increased its housing stock by 12% and average rents increased by only 1%. Whereas the rest of Minnesota only increased its housing stock by 4% and, maybe as a result, average rents went up by 14%. Changes in homelessness also look dramatically different.

It looks to be a similar story to what's playing out in Austin: increased housing supply is tempering rent growth. (Okay, in the case of Austin it seems to be causing rents to fall .) What I would be interested in seeing now is a further breakdown of this 87% share. Because 20 suites is a different kind of build than 300 suites. It's different for developers and it's different for cities. And I'd like to know if the market is favoring one over the other, or if it's building apartments at all scales. If the city is in fact building lots of new apartments at multiple scales, then this is even more of an accomplishment. It means there might be no "missing middle."

Cover photo by Eastman Childs on Unsplash

Earlier this week, Chinese architect Liu Jiakun was awarded the 2025 Pritzker Prize . For those of you who may not be familiar, the Pritzker Prize is generally considered to be the architect world's most prestigious prize. (The full list of laureates can be found, here .)

Jiakun is based in Chengdu, China and he has worked exclusively within the country. His largest project is a mixed-use complex known as the West Village, which is a truly enormous courtyard building that exists at the scale of a neighborhood.

It houses cultural, recreational, commercial, and office spaces, all of which are connected by an elaborate network of pedestrian and cyclist ramps. Here's what that looks like from above:

At first glance, it's the kind of large-scale development that looks as if it may not work. It looks like it could be the kind of project that sterilizes a fine-grained urban neighborhood. But get closer, and things start to look a little different.

The true test is seeing how it performs at the scale of a pedestrian. And I found this walking tour helpful in understanding what that might feel like. If you spend a few minutes watching it, or even just scanning through it, you'll see that the area looks active and busy, even at night.

Now, I've never visited this project, or Chengdu for that matter, but I suspect that the way to think about this project is not as one giant complex, but as a giant public space flanked by buildings. In other words, it's not that the complex is enormous, it's that the public spaces are enormous.

Jiakun is quoted as saying this :

“I always aspire to be like water,” says Liu, “to permeate through a place without carrying a fixed form of my own and to seep into the local environment and the site itself. Over time, the water gradually solidifies, transforming into architecture, and perhaps even into the highest form of human spiritual creation. Yet it still retains all the qualities of that place, both good and bad.”

The West Village seems to be a testament to this approach. He aspired to not interrupt the flows of the existing environment, and perhaps that's why it works so well. Or at least, that's what it looks like on YouTube.

Photos by Qian Shen Photography

Last year, the Feds lowered immigration targets in response to Canadians getting grouchy about the number people entering the country. This is expected to be felt starting this year. RBC estimates that Canada's overall population will shrink by about 0.2% this year and next, before returning to positive growth in 2027 (albeit at a lower rate).

That said, the data we have at our disposal today is backward looking and for the 12 months ending on July 1, 2024, Canada continued to see impressive population growth. Looking at the Greater Golden Horseshoe specifically, it grew by about 382,000 people. The 2023 figure was also revised upward from 340,000 to 367,000.

Here's a table from TMU's Centre for Urban Research and Land Development:

Nearly three-quarters of this growth was concentrated in the Greater Toronto Area, and about three-quarters of this growth was concentrated in Toronto and Peel at 143,000 and 70,000 people, respectively. These are big numbers, especially during a period of dramatically fewer housing starts.

Of course, going forward, lower household formation should alleviate some of the pressures on our housing market. But zero population growth is not sustainable, not unless we want to end up like Japan with a demographic crisis. So there will be tremendous market pressures to return to positive growth.

At the same time, if we go back to RBC's insight report, it specifically says: "This [lower immigration levels] will help realign housing demand with supply — so long as homebuilding can be sustained near current levels." Yeah, that's not happening . Housing starts in the Toronto region have fallen off a cliff.

So I continue to feel like 2027 will mark an important turning point for our housing market. It could be the year when population growth broadly returns, when we've fully absorbed the supply from the last cycle, and when we suddenly realize we don't have nearly enough new housing. Or at least that's my view.

Cover photo by Richard Hong on Unsplash