Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 541

When I was living in Philadelphia as a graduate student, new development was seen as a bit of a gift. I remember developers telling me that it costs the same to build in Philly as it does in New York, except that the rents are obviously a fraction in the former relative to the latter. So it was tough to make projects pencil.

At the same time, Philadelphia had a 10-year residential tax abatement program in place. I think it's still in place, but it may have been modified since I was there. Either way, it was essentially an incentive to develop or redevelop existing residential properties. In the case of a renovation, the taxes associated with any improvements were what got abated for the 10 years.

Put differently, it was an invitation to gentrify. Come buy an old row home, fix it up, and then don't pay any additional property taxes on those improvements. This was the way things felt at the time. So it was interesting to learn today that Philly's current development boom is about to get throttled down with a new mandatory inclusionary zoning policy that will take effect later this year. Gentrification, it would now seem, is a problem.

The policy requires that 20% of the units in any new housing development (with 10 or more units) must be affordable for at least a 50-year period. For rental households, affordability means 40% of the area median income (AMI). And for owner-occupied households, it means 60% of AMI.

I have already said pretty much everything I can say about inclusionary zoning . But one of the unique things about Philly's policy is that it is only going to apply to two of its Council Districts. It is not a citywide policy. This is going to create a strong disincentive to develop in these areas, and will likely force new development into surrounding ones. But maybe that's part of the point.

Photo by Dan Mall on Unsplash

We just finished up three days of snowboarding and skiing in Tremblant, Quebec and we’re now in Montreal closing out the long weekend. I am arguably Toronto’s greatest fan and supporter, but I continue to admit that Montreal is the coolest city in Canada.

In other news, Theresa Qiu and Grant Schellenberg recently authored a Statistics Canada report looking at the weekly earnings of visible minorities and white people across the country. The study focuses on Canadian-born individuals aged 25 to 44 who were gainfully employed and making money in 2015.

The reason why they isolated the study to Canadian-born visible minorities is that they wanted to eliminate the noise around new immigrants who may be struggling with the language(s), the recognition of their foreign credentials, or some other variable.

In this case, every individual that factors into the study was born in Canada and, in theory, had access to similar sorts of opportunities. Of course, we know this isn’t always the case, but it’s an attempt an equal baseline.

The findings are pretty interesting.

Korean, Japanese, and South Asian men all tend to earn more than white males (which formed the baseline for the study). More than 60% of Chinese and Korean men also have a bachelor’s degree or higher, whereas only 24% of white males are in the same position.

This is an important data point because we know that economic outcomes tend be positively correlated with educational attainment. The benefits of education also tend to compound later in life and this study only focuses on people aged 25 to 44. So the spreads could widen.

One the factors that is surely influencing the above findings is that visible minorities are overwhelmingly urban. About 60% of visible minorities in Canada live in just three cities: Toronto, Montreal, and Vancouver. This compares to only 27% of white people.

Again, an important data point given that people in big cities tend to earn more than those in smaller communities.

For the full study, click here .

As a general rule I don’t like to recommend books that I haven’t read yet. And so I’m not here today to recommend Jenny Schuetz’s new book about how to repair America’s crumbling housing policies . Instead, I’m just telling you all about it. You can then do your own research and decide if it’s worthy of your time. The premise sounds good though:

Unequal housing systems didn’t just emerge from natural economic and social forces. Public policies enacted by federal, state, and local governments helped create and reinforce the bad housing outcomes endured by too many people. Taxes, zoning, institutional discrimination, and the location and quality of schools, roads, public transit, and other public services are among the policies that created inequalities in the nation’s housing patterns.

This may be confirmation bias at work but I continue to feel like there’s a groundswell of interest in housing reform. In particular, there seems to be a growing interest in rethinking the privileges that we have decided to bestow upon low-rise housing (at least in this part of the world). But of course, that’s only one part of what is ultimately a complex set of systems.