Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 523

If you've been following the Toronto housing market and/or following any panicky resale agents/brokers on Twitter, you'll know that things have shifted over the last few months. Here's what broker (and my friend) Christopher Bibby had to say about the market in his most recent newsletter :

As anticipated, April has ended up being one of the defining months of the 2022 real estate market. With the recent fragility we are seeing, it is clear that the market peaked in February. In fact, the Toronto Real Estate Board, in its most recent Market Watch, claims that month-over-month prices could be down by 2.6%—which is very likely. TREB also indicated that the overall number of year-over-year transactions in March was down by approximately 30%. I deferred the release of this newsletter because weekend activity positively altered some of my previous commentary. The key takeaway, however, is that sentiment has shifted in our marketplace.

But let me paraphrase the conclusion of Bibby's newsletter with two words: who cares? If you think that Toronto (or some other city) will remain an important global city by 2025, 2030, or even 2040, you really shouldn't be fussed by what the market is doing over the span of a few months.

Moreover, I can tell you that my least favorite time to go out and buy real estate is when everyone else is submitting silly offers and clamoring to buy whatever they can find.

San Diego-based Jonathan Segal is a unique kind of builder in that his firm doesn't have any clients. They act as both the architect and developer for all of their projects. This gives them a lot of control over the building process, but also more freedom to experiment.

ULI recently interviewed Segal about his micro-housing project on 320 West Cedar Street in San Diego's Little Italy (called The Continental ). And I think it's a pretty interesting case study for us to discuss here on the blog.

It's a 5,000 sf corner site, and Segal developed it with 42 micro units (5 of which are priced at 65% of AMR), two retail spaces at grade, and a separate "single-family townhouse" for his son that sits on top of the retail space at the corner.

The idea was to create relatively affordable "workforce" housing, which is why there's also minimal parking. The 37 market-rate units are currently priced between $1,595 and $1,995 per month, and the affordable ones are about $900 per month.

Segal is forthright in the interview in saying that leasing velocity was slow following completion in December 2019. It was hard to rent these kinds of units in San Diego without any parking. But he viewed the project as an experiment and eventually he did find product-market fit.

The mix of housing types here is also noteworthy. Presumably his son could have just gone out and built a more typical grade-related home. But why do that when you can build on top of an urban retail space and add 42 other homes to the lot?

Never Too Small remains one of my favorite YouTube channels. And I have written about their videos before on the blog. The homes that they feature on their channel are generally below 600 square feet or so, and most of them are well below this mark. Some have even been designed for young families.

One of the common strategies that you'll see with small floor plans is that the bedroom is often reduced to only what is necessary for sleeping and it is often inset within the home, away from any exterior glass. As an example, here are before and after screenshots from a 318 sf apartment in London (link to video).

Before:

After:

In this case, the bedroom was pulled away from the apartment's bay window and a small mezzanine level was created. This makes a lot of sense since the bay window is kind of a main feature -- one that, I think, is better reserved for a primary living space. They also flipped the kitchen up against the other window, rescuing it from the bowels of the apartment.

If I had been the one tasked with redesigning this apartment, this is a floor plan that I could see myself landing on. But here's the thing. All things being equal, I think most people would prefer a bedroom with a window. And even when all things aren't equal, a lot of people seem willing to compromise on their main living space so that they still get one (see before plan).

So before you go ahead and watch the NTS video, I'm curious : Which do you prefer? Would pick the before plan or the after plan given these two options?