Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 353

Drone delivery is one of those things that has always sounded really cool, but has yet to see a lot of adoption. As of May of this year, Amazon Prime Air has only made about 100 drone deliveries in California and Texas (the two states where it operates). This is compared to their initial target of 10,000 deliveries before the end of 2023.

That said, last week, the Federal Aviation Administration (FAA) approved UPS (as well as other companies) to fly drones "beyond visual line of sight." This seems like a pretty important approval, because I don't know how you deliver anything meaningful if somebody needs to keep the drone within their line of sight.

The thing that I can't get over in my mind, though, is how you deal with the noise population associated with lots of drones flying around. It's one thing if you live in a low-density community and a lonely drone comes by once in a blue moon to say hello. But in the city, even just replacing every cubed-shaped Uber Eats backpack would equal a hell of a lot of drones.

Presumably they would fly, at least some of the time, on top of our existing streets, just above the cars. Because the authorization is only for altitudes below 400 feet . So for tall buildings, you wouldn't always be able to do deliveries from the roof. And I guess that would be fine so long as they stop sounding like giant insects.

If that were to be the case, it's interesting to think about what that would do to all the real estate that exists at that same elevation.

The Dutch now believe that the number is 230cm . This is an increase from a previous recommendation of 200cm. The thinking behind this number is roughly as follows. Apparently there are Dutch laws stipulating that bikes can't be wider than 75cm . So this is the starting point.

But since it's impossible to always ride in a perfectly straight line, there seems to be a generally accepted rule that, at an absolute minimum, cyclists need about 100cm of width to themselves.

If you now double this so that two people can ride side-by-side, you're at 200cm. This is an important design criteria because the Dutch also seem to believe that (1) cycling is a social activity and (2) a child should be able to ride beside their parent. (Love this!)

Finally, add in a bit of buffer so there's room to pass slower cyclists and/or nobody feels like they're going to crash into oncoming cyclists, and you get to 230cm as the ideal width of a single bike lane.

I'm not sure I had given this much thought before, so I look forward to scrutinizing (and possibly measuring) every bike lane I ride in going forward.

For next year's budget (2024), the City of Toronto is projecting a $1.5 - $1.7 billion budget shortfall. And over the next 10 years, this shortfall is expected to grow to nearly $47 billion if changes aren't made. This is according to a recent report prepared by Ernst & Young and Strategy Corp. So right now, all of this is being looked at and debated by Council .

Where are we going to get this money?

One persistent debate is whether the city actually has a revenue problem, or whether it's simply an expense/spending problem. I can't say that I've scrutinized the city's expenses at any length, so I'm not going to get into that level of detail today. For this post, I'd like to focus on two specific things. The first is property taxes.

Here is a figure, from the report , showing residential property tax rates across southern Ontario:

What you will see is that Toronto has the lowest rate of the 35 municipalities that they looked at. Now obviously there are some nuances to consider. The average home price in Toronto is higher than it is in, say, Sault St. Marie. Toronto also has a large commercial property tax base. But even still, historically speaking, Toronto has tended to increase its residential property taxes at or below the rate of inflation.

This is a problem. And it is the exact same problem that we have talked about on this blog in regards to residential rent controls. If you own an apartment building where the rents are capped and your expenses are, therefore, growing faster than your revenue, you are (1) highly incentivized not to invest in the apartment (you can't afford to) and (2) eventually going to hit a financial wall.

Sound familiar? As far as I can tell, that is, at least partially, what is happening here.

Secondly, one of the first things that I did when I opened the report was run a search for "road tolls" and "congestion charges". Regular readers of this blog will know that this is something I feel strongly about . Here's what I found:

In 2017, when the City considered implementation of tolls for the Gardiner and the DVP, staff estimated that a $2-per-trip toll would generate $5.6 billion in 10 years. The province has refused several requests to consider these options, with the Minister of Transportation rejecting any discussion of uploading or tolling as recently as December 2022.

This is also a problem. One of the general rules with taxes is that you should ideally tax the things you want less of. Hmm. So why not tax traffic congestion? There is no question that it works. There's lots of evidence from all around the world. We just lack the political will to actually do it. Instead, we pay lip service with solutions that don't work.

At the same time, if we were to actually implement road pricing, I don't believe that a flat toll is the way to go. $2 also seems low. The best practice is dynamic road pricing that fluctuates based on actual congestion levels. Meaning, if you're driving at 5am, expect a low rate. And if you're driving at 5pm, expect a high rate.

Virtually overnight, we know this would do at least three things: (1) it would reduce/eliminate traffic congestion (congestion levels would become a function of pricing); (2) it would reduce overall carbon emissions in the city; and (3) it would take a meaningful chunk out of this $47 billion budget shortfall.