Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 292

One of the things that you'll notice on real estate listings in France is an Energy Performance Diagnostics (EPD) rating. In French, it gets reversed, and so it's a DPE (diagnostic de performance énergétique). What it tells you is how much energy the dwelling (or building) consumes and how much greenhouse gas it emits. And it is a requirement on all real estate listings and for all dwellings, except those that are occupied for less than 4 months per year. The output of this diagnostic is a rating from A (best) to G (worst).

According to FT , this is how primary residences in France rank today:

Less than 5% of homes are rated A and B (the most energy efficient). And many more are rated G and F. Beyond just being energy inefficient, this is potentially a problem because there are penalties and restrictions for the lowest rated homes, one of which is that you are not allowed to rent out the property. Right now and as of January 1 of this year, the upper consumption limit is 450 kWh per square meter per year. Go above this and the home becomes ineligible.

This number is also planned to reduce over time :

• January 1, 2023: Rental ban on properties with G+ energy label

• January 1, 2025: Rental ban on all properties with G energy label

• January 1, 2028: Rental ban on all properties with F energy label

• January 1, 2034: Rental ban on all properties with E energy label

Now here's what this is thought to mean for overall rental supply:

By 2028, 5.2mn homes rated F and G, or 17 per cent of total housing stock, will become ineligible for rental. By 2034, all E properties will also be excluded, amounting to about 40 per cent of homes.

This raises an interesting question: Is it more important to have energy-efficient homes or to have greater overall supply? Now obviously the goal and ideal scenario is both; lots of affordable homes that are also energy efficient. And presumably, one of the objectives of this rental ban is to stick/carrot owners into investing in energy measures. But it's not exactly obvious as to how many owners will be able to renovate their homes in time, and how many homes will become ineligible for rent. This will be an interesting policy to watch as it plays out.

Brigitte Shim (of Shim-Sutcliffe Architects ) invited Gabriel Fain and I to the Daniels Faculty this morning (at the University of Toronto) to talk about Mackay Laneway House .

It was for a class on laneway housing and, as it turns out, some of the students had been using MLH as a case study. That's pretty cool, although the primary lesson is probably "don't build next to large trees."

Following the presentation, we had a good discussion about laneways, and it reminded me of some of the things that I believe to be true. More specifically, it reminded me of what I think will happen in the future:

• Bona Fide Streets : Laneways will become bona fide streets. Meaning, they'll get real names (most don't have one today) and they'll get serviced. Today, laneway suites are typically serviced via the main/existing house.

• Severable Lots : Laneway lots will become severable. Right now this is strongly discouraged, because the intent is to create new rental housing and not new for-sale housing.

• Market Inversion : Once these lots become severable, the market will then be able to decide which frontage is most valuable -- the current street side or the laneway side. Maybe some get split right down the middle (50/50) or maybe some get biased toward one frontage. Either way, I think it will become common for the laneway frontage to be more desirable given its intimate scale and pedestrian orientation.

• Mixed-Use : Non-residential uses will become allowed.

I have no idea when all of this might happen, but I believe it will happen. So I wanted to write it down publicly.

Knight Frank just published the 2024 edition of its annual wealth report and, it turns out, that 2023 was a reasonably good year for rich people. Below are some of the charts that I found interesting as I flipped through the report.

The first is their Prime International Residential Index, which tracks the pricing of the most desirable and expensive properties in the following 100 locations. Generally, they define this as the top 5% of each market.

Moving on, this is how much square meterage that US$1 million will buy you in select city and second-home locations.

These are the cities that saw the greatest cross-border investment flows into commercial real estate.

This is their prime property price forecast for 2024.

This is what it looks like for prime rents.

And finally, this is how much net wealth you need in order to join "the 1% club" in select countries/territories.

To download a full copy of Knight Frank's 2024 Wealth Report, click here .