Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 378

Tishman Speyer, the San Francisco Giants, and MVRDV have just completed a new residential building in San Francisco called " The Canyon ."

The first phase of the larger Mission Rock masterplan (which also includes a project by Studio Gang), the complex got its name because of a walkway that cuts through the plinth of the building and that, well, looks like a canyon. You can see it in the above image if you look closely. There are even stairs that take you up as you walk through it.

But what is most interesting about this walkway is not its geological reference. It would be how it performs at the ground floor and for the homes that face into it. It's a way of creating a narrow mid-block connection (and we like narrow streets ), while at the same time allowing more light into the center of the block.

So I'd be curious to see/experience what it's like in the middle of this canyon. Hopefully it's interesting.

Photo: Jason O'Rear

This proposal by Dubbeldam Architecture + Design, called Incremental Density, is both an obvious step in the right direction and a problem. It is directionally right because it is exactly the kind of "gentle density" that we need and that many of us hope to see in our cities.

Four to six storeys, prototypically built on an as-of-right basis all across city, possibly by small-scale owner/developers. In fact, this approach is one of the things that Toronto's new mayor, Olivia Chow, has been speaking about on her first day in the office:

Further, Chow said she wants to make it “easy and fast” for those who want to “build up” their single-family, often detached, homes to address what is known as the “missing middle” due to a history of “red tape” around zoning.

“What I’m saying is ‘build, build, build, build,’ up to four storeys if you want to have four units,” she said. “You can rent out three of them and some money right. Then you are creating more housing, and you’re earning some extra dollars,” she continued.

“So I want to unleash the power of the homeowner and say to them, ‘go build it,’ because we need housing right here now.”

Here's the problem, though. I'm going to go out on a limb and assume that at least a few people will not want 6 storeys beside them and their backyard. I mean, I struggled with a 2.5 storey laneway house for many years. (11 to be exact.)

So how do we get from where we are today to what you see above? It's going to take some finessing. Maybe it's only in specific areas and on certain sites to start, or maybe we need to gradually increase the massing over time. Either way, I too am ready to "build, build, build, build."

What do you all think of this proposal?

Images: Dubbeldam

We have spoken recently about the reset taking place in the development industry right now. It is difficult to underwrite new projects.

But even before this current environment, it was challenging to make new rental housing pencil. Condominium projects almost always look more attractive (at least here in Toronto) and generally speaking, the spectrum for rental housing feasibility goes from "no, this doesn't work" to "yeah, maybe this will work if we trend rents over a long enough time horizon."

The problem with this is that we know more rental housing would be a positive thing for our cities. So how do we address this? Here are some common solutions that get thrown around:

• Make condominium projects less attractive to build. If fewer developers want to build condominiums and if fewer investors want to buy them, then maybe new purpose-built rentals will become more enticing to build. On some level, this makes sense. It should create downward pressure on land values . But this doesn't help rental housing supply if it isn't feasible to begin with. And why limit overall housing supply? (Related post, here .)

• Make rental housing projects less attractive to build. I know this sounds counterintuitive when I say it this way, but we do do this. Rent controls, to give just one example, generally make it harder to build new rental housing. Yes, it can help those who are already housed, but it can disincentivize proper building maintenance, it can lead to more people being over-housed, and it absolutely hurts new supply. So there are trade-offs.

• Make rental housing projects more attractive to build.

I find this last one intriguing, and so here's one specific idea that I have raised before. Though this time, I'm quoting Benjamin Tal of CIBC:

But, by far, the most pragmatic step to take in the immediate future would be to waive or defer HST payments on purpose-built rental projects from first occupancy to the sale of the building, while keeping the same valuation methodology as the current regime.

It’s the most realistic option since it’s relatively easy to implement, and Ottawa will have a willing partner in the Ontario government. Buried in page 84 of the recent Ontario budget was the following sentence, “we call on the federal government to come to the table on potential Goods and Services Tax/Harmonized Sales Tax (GST/HST) relief, including rebates, exemptions, zero-rating or deferrals”.

Such a move alone would shave close to $60K from the unit cost of that 400-unit project in Toronto, resulting in a meaningful reduction in rent, while at the same time unlocking tens of thousands of rental units across the country in short order — clearly a step in the right direction.

We should do this.

P.S. Sam, thanks for sharing Tal's article with me.