Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 384

Cities are complicated. And we have spoken before about how it can sometimes feel like they never really reach homeostasis. In extreme cases, it might seem like they're either decaying and losing people, or they're too successful.

I was reminded of this again this morning while reading an article about how Rome's historic city center is being overrun with Airbnbs and tourists, and how it is pushing out the locals. It has, arguably, become too successful as a tourist destination.

Of course, this problem isn't unique to Rome. Venice has the same thing going on , though probably to a greater extent. And Amsterdam is currently working to attract more highbrow tourists and to move their red light district out of the city center .

But the question I have is: What's the right amount of tourism? If 25,000 listings is too many for Rome, what's the right number? And do cities ever really achieve homeostasis, where, you know, things feel just right? Here's an excerpt from the above article that describes what parts of Rome were like before the tourism boom:

Ms. Rapaccini remembers when Monti was a quiet, authentic haven for arty types and locals. She and her late partner, the film director Mario Monicelli, who received six Oscar nominations, moved to Monti in 1988. The area was   unfashionable, dirty and full of prostitutes, but beautiful in its gritty way, “like a little village” even though it was in the heart of a big, bustling city, she recalls. The apartments were cheap and the area began to attract film types, journalists and artisans – none of them rich – who mixed easily with local workers and shop owners.

It's a romantic description of what sounds like a pretty gritty area. Unfashionable, dirty, and full of prostitutes is apparently better than full of annoying American tourists. And perhaps it is. But then what was the area like before it was unfashionable, dirty, and full of prostitutes? Was that also better?

I have no idea. But cities are constantly changing and evolving , and they were doing it long before any of us arrived, especially in the case of an ancient city like Rome. Maybe that's what makes it so difficult to hang onto that exact moment in time when everything was just right.

Chart: Globe and Mail

https://twitter.com/NewsLambert/status/1667548612040052737?s=20

When interest rates are low, people generally want to buy more highly-levered assets, such as real estate. This, of course, makes perfect sense, because lower rates mean more buying power. But how badly someone wants to buy more real estate should, at least in theory, depend on their particular situation.

If you're buying a pre-construction home, the current rate should matter less than what it might be in the future when it comes time to close (usually you can only lock in a rate for so long). That said, lower rates can help people feel richer because it buoys the value of their other assets/investments. So in this regard, low rates do help the pre-construction market.

On the other hand, if you're buying a home to immediately close on, then current rates matter a great deal. This is the rate that you are going to be paying. However, in Canada, the typical term for a fixed-rate mortgage is 5 years. Meaning that after 5 years the rate resets to whatever market is at that time. So eventually, the mortgage does become an adjustable-rate one.

In the US, this isn't the case. The most popular mortgage is a 30-year fixed-rate loan, meaning the rate stays the same for the entire 30-year period. What this means is that Americans should -- again, in theory -- want to buy more real estate -- the most -- when rates are low. That's the time to back up the truck and lock in a sweet rate for the next three decades.

As many of you know , I am an advocate for high-speed rail in Canada. Specifically along the Windsor-Quebec City corridor, which is the most densely populated part of the country. And so I found this comparison interesting:

"If there is one project that would  create thousands of jobs , improve business productivity, clean up the air, reduce the output of greenhouse gases and cut the demand for endless highway construction, it would be high-speed electric rail between Toronto, Ottawa and Montreal, where population densities are high enough to make the project sensible. Cost estimates are all over the map. The University of Toronto’s Munk School of Global Affairs & Public Policy put the price tag at about $12-billion, which is $2-billion less than the bucks being thrown at the  Volkswagen battery plant  alone. But forget it – the Canadian government wants more cars, not fewer. Canadian cities will remain car sewers forever."

The above excerpt is from this opinion piece talking about EVs and the public subsidies being paid to encourage battery production within Canada. I get that we want to be part of this important mobility shift. But we are way behind when it comes to high-speed rail.

And by behind, I mean that we don't have it at all in this country.