Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 531

Gas prices are up. And here is a chart to support this statement:

If I were trying to be as sensational as possible, I would likely leave things here. But since that is generally not what I try and do with this blog, here is another chart showing gas prices over a longer time horizon.

Shown this way, gas prices don't seem as crazy. In fact, we're only now returning to where prices were back in 2008.

That said, these swings do impact things. And it is interesting to consider how these impacts might be felt differently across different cities.

So here is one more chart from City Observatory looking at the average number of miles driven per person prior to COVID:

One way to think about this chart is that it generally speaks to built form. Compact cities with higher densities and greater access to public transport, generally translates into people driving less.

The result is something that City Observatory refers to as a "green dividend." Less driving, means you save money on cars and gas. And so when gas prices go up, so does your green dividend.

Of course, if you were to get really serious about calculating your green dividend, you'd also want to look at your housing costs, as land prices tend to decline as you sprawl outward.

Ultimately, this is a trade off between housing costs and transportation costs (both direct and indirect, such as the cost of your time).

But I think that there should be another dimension to this green dividend and that is the environmental benefits of less vehicle miles travelled. That too, of course, can be measured.

The great housing debate continues: Are we building enough housing, or are we not?

Right now the media is talking about a new report from the Union of B.C. Municipalities , which is claiming that cities in British Columbia are actually building enough housing to keep pace with population demand.

Between 2016 and 2021, the province's population grew by 7.6% and the number of new dwellings grew by 7.2%, according to the report. So supply appears to be lining up with demand.

One problem with this robust analysis is that many people, including the Housing Minister, don't agree. Here's an excerpt from the Globe and Mail :

“The overly naive analysis comparing housing to population growth to declare the adequacy of our housing supply fails to understand that housing and population growth are intimately related,” said statistics analyst Jens von Bergmann, a regular decoder of housing statistics for Vancouver and Canada. “It’s a slap in the face of those who have been pushed out, or those who failed to move here, because of the unavailability of housing.”

And on a related note, here is a recent piece by Shawn Micallef (Toronto Star) talking about why the left can't get Toronto's housing right.

We all know that inflation is a thing right now. Prices are rising. One way businesses can choose to respond to this is through something called "shrinkflation", which the Financial Times writes about here . The idea behind shrinkflation is that, instead of just raising end prices to absorb higher costs, you instead shrink or reduce your product or service offering. Of course, you could also do a combination of both things: increase your price and shrink your offering.

This shrinking can take many forms. A few less chips in your bag. A slightly smaller chocolate bar. Smaller food portions at the restaurant. Or maybe opt-in room service for your hotel room. It can also take the form of less space. Average apartment sizes in most big cities have trended downward over the years for this exact same reason. Developers are working to maintain some kind affordability in the face of rising costs.

I think a lot of people like to scoff at these sorts of practices. Why can't we just build bigger family-sized suites? But the reality is that it is being driven by real market constraints. Without something giving, like suite sizes, urban housing would be multiples less affordable compared to current levels. The developers I know don't have any sort of deep-rooted philosophical aversion to selling 5,000 square foot estates in the sky. The problem is simply that most buyers and renters won't like the sticker price.