Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 443

Earlier this year, the Mayor of New York City, Eric Adams, and the Governor of New York, Kathy Hochul, assembled a panel of civic leaders and industry experts to try and come up with a plan for a "New" New York.

Initially, this panel was intended to be entirely focused on reviving the city's business districts, and in particular those that have been slow to recover from the pandemic. But scope creep happens and it ultimately grew to include two other important goals: make it easier to get around and encourage "inclusive, future-focused growth."

The recommendations from this panel were released today and it's in the form of a report with 40 specific initiatives . In keeping with its original intent, the first recommended initiative is one that you would expect: "Make Midtown and other business districts more live-work-play." And what that means is the following:

We will remove barriers that have kept Midtown and other business districts stagnant by making it easier to convert and redevelop outdated office buildings to other uses, including residential, thereby empowering the market to create more vibrant, mixed-use districts. We will also update old-fashioned regulatory codes that have prevented small businesses from locating, expanding, and innovating in those districts, providing zoning flexibility for businesses to thrive. And we will unite our business districts behind a shared goal of vitality by aligning incentives for businesses to help maintain vibrant business districts.

New York isn't the first city to be encouraging office-to-residential conversions and it certainly isn't going to be the last. I think most of you know that I am a firm believer in office-centric cultures and that I'm in mine 5 days a week. But this is a recalibration that is going to need to take place in some submarkets.

And here is one of the capitals of the world -- New York City -- telling us that it needs to happen there.

I am not the target market for Restoration Hardware, I mean RH. But I do think it is interesting the way they are evolving their brand. At the beginning of 2021, the company announced a $105 million equity investment in a development project in Aspen, where it is planning a new guesthouse and, more broadly, a new "RH ecosystem" that will include residences, restaurants, a spa, etc. It hasn't opened yet, but RH does now have a guesthouse in New York . To be clear, it is not a hotel:

So what is RH trying to do with all this?

Surface Magazine recently argued that they are trying to become the "public" version of Soho House. That is, a lifestyle omni-brand that isn't membership-based, but that will still make you feel rich and special while you eat, sleep, play, and shop for various things for your home. Now, I do think that their target customers aren't exactly the same person. But of course, I see the parallels. And it's certainly interesting from an experiential retail, brand ecosystem, and real estate development standpoint. It gets the brand everywhere.

It is an overwhelmingly positive thing for cities when you can somehow figure out how to turn a site like this (which looks to have been a single-family home):

Into 13 homes and new ground-floor retail that looks like this (non-Google street view images can be found here ):

This particular example is at 752 High Street in Thornbury , which is an inner suburb of Melbourne. Designed by Gardiner Architects , the build has 4 floors of residential, a 5th floor rooftop amenity, and a single elevator with a single wraparound staircase. It was also constructed out of cross-laminated timber.

For more about that process, here's a short video :

https://youtu.be/b-688Jvjmwk

If you watch the video, you'll hear the architect talk about how his firm had been working on this project for about 8 or 9 years. I have no idea the backstory and I'm not about to speculate, but clearly 8-9 years is far too long for only 13 new homes. And the reality is that we often don't make it easy to build this kind of infill housing.

Broadly speaking, if you're trying to encourage this scale of housing, I think at a minimum you want to look at 3 things: (1) the planning permissions need to be flexible and as-of-right, (2) you need to look at the local building codes to see if there are any obstacles in place that don't necessarily make sense for this typology, and (3) you want to look at the impact fees being levied.

It's hard not to imagine our cities being better off having more apartments like High Street.