Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 217

We have spoken before about the importance of speed and rapid decision making in real estate development. But in practice, it's obviously a little more complicated than just being good at making quick and high-quality decisions. And that's because building a building is complicated and it requires teams of people, all working toward the same goal. Some of these people will be internal to your organization, but many will be external, which is a feature that further complicates matters. Because it means that, to varying degrees, there are critical path items -- items that control your overall project schedule -- that are not fully in your immediate control. This is one of the things makes development and construction so challenging.

Now, ordinarily, when a team is being assembled people will talk about their project experience, their systems and fancy tech, and perhaps some of the awards they've won because of their extreme talent. But what doesn't often get talked about is the simplest and most basic of things: You want people who will do what they said they would do, when they said they would do it. In other words, you want responsive and reliable people. This sounds pretty banal, which is maybe why it so often goes unspoken, but it's fundamental to the success of a project. The other nuance to this is that, most of the time, it's less about the company itself and more about the individual human who will be working on the project. Is that person good?

Just being responsive, reliable, and on top of things goes a long way. These are the kinds of people you want on your team and it's how you move fast.

Approximately 41% of the YTD population growth in Canada this year has been in Ontario. Here's a slide from a recent presentation by Zonda Urban :

So there's an argument to be made that demand is still outpacing new housing supply in most of our major markets:

Why then are new home sales continuing to slide? A reasonable answer would be that -- by design -- this new housing isn't attainable to most:

The result seems to be a long-term structural shift toward more rental housing:

Elevate Miami, which I wrote about last month , just announced a number of new speakers and, more specifically, a number of new high-rise development projects that will be discussed at the conference. They are (not an exhaustive list):

• Dolce & Gabbana Residences, Miami

• Mercedes-Benz Places, Miami

• Aman and One High Line Residences, New York

• Indian Creek Residences & Yacht Club, Miami Beach

• Edition Residences, Miami

• AGE360, Curitiba, Brazil

What should be clear from this list is that Miami is like a different planet. It is one of the places where the richest people in the world go to spend their money, much of it on real estate. Because of this, you can think of this real estate as a luxury good, which is why so many of them are now branded.

In economic terms, a luxury good is typically defined as a good where demand increases -- more than what is proportional -- as incomes rise. For example, if a person's income goes up by 1%, but their demand for a particular thing goes up by 5%, then this thing would be considered a "luxury good," as opposed to a "normal good."

The technical definition is an income elasticity of demand that is greater than 1. More simply, this just means that as someone starts making more money, they will start spending a greater percentage of their income on luxury goods. This is in contrast to "necessity goods," where it doesn't matter how much money you make, you only need so much toilet paper, for example.

What all of this suggests is that as people from all over the world get rich, they are likely to want more branded residences in a place like Miami. However, the flip side of this dynamic is that as incomes fall, the demand for luxury goods should, in theory, also fall more than what is proportional. It works both ways.

So I'll be curious to hear -- from the developers at Elevate -- how things are going right now. We're at a time in the real estate cycle where everyone is rethinking their strategies. Or maybe, Miami truly is a different planet.