Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 268

This morning, I went cycling with my good friend Austin Kjorven up in Milton. And it was a stark reminder that he is an athlete and holds a Guinness World Record, and that I spend the vast majority of my days sitting at a desk.

I'm excited for more riding this summer. Happy May long weekend, everyone.

Last year, I wrote about how Salt Lake City wants to build a new linear park around its downtown. That post can be found, here .

Fast forward to today, and the city's Department of Economic Development has just published a new comprehensive 215-page study that supports turning Main Street into a pedestrian promenade.

Specifically, the area running from South Temple to 400 South, and including 100 South from Main to West Temple:

As part of the study, they highlight a number of successful case studies from around the world, including 16th Street Mall in Denver, Bourke Street Mall in Melbourne, and Queens Quay here in Toronto.

In the case of Denver, they cite the one-mile stretch as single-handedly generating over 40% of the city's total downtown tax revenue! And in the case of Toronto, they refer to Queens Quay as a global destination. (Toronto readers, do you agree?)

Like most city building initiatives, this vision is will take years to realize. But it's interesting to note that, of the eight design alternatives included in the study, there is already one clear preference within the local community -- option B.

Option B is a pedestrian/transit mall, but with multi-use trails. In other words, it is a no-cars-allowed alternative that would still allow bicycles and scooters. Here's the street section:

If you'd like to download a copy of the full Main Street Pedestrian Promenade Study, click here .

As of November 2023, it was estimated that there were 988,000 homes under construction in multi-family buildings containing 5 or more units. This is in comparison to 680,000 single-family homes, according to US Census data. (Looking at the below graph, it's also interesting to see how the supply of single-family homes dropped off after the global financial crisis and multi-family apartments took off.)

All of this means that in 2024, the US is on track to complete more apartments than it has in many many decades. In fact, exactly similar to what we experienced here in Toronto , if you want to find a comparable multi-family supply number, you need to go as far back as the 1970s (see below). Of course, the US had fewer people back then, and so on a per capita basis, it was building more housing.

Still, all of this new supply is having an impact. Apartment List recently published its national rent report, over here . And overall, it found that:

Rent increases are currently being moderated by a robust construction pipeline expected to deliver a decades-high number of new apartment units in 2024.

More specifically, they found that the cities with the most supply are now seeing the largest rent declines:

Many of the steepest year-over-year declines remain concentrated in Sun Belt cities that are rapidly expanding their multifamily inventory, such as Austin (-7.4 percent year-over-year), Raleigh (-4.4 percent), and Orlando (-3.9 percent).

If you're an apartment developer, this is not what you want to see. It means that increased competition is creating downward pressure on rents and that vacancy rates are probably rising. But if you're someone looking to rent an apartment, this is exactly what you want to see. You want more affordable housing. And so, as a consequence, you want more homes to be built. Because when supply outstrips demand, this is what you get.

Charts: Apartment List