Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 558

As promised , below is a list of some of my predictions for this coming year. I have tried to be both punchier and more precise in my prognostications; because, well, obvious predictions are boring and precision will allow me to better evaluate my thinking at the end of the year. So here goes.

1. 2022 will be the year that COVID-19 becomes endemic and finally fizzles out to a point where it no longer factors into our decision making in the same way that it has for most people over the last two years or so. I think this will happen by as early as the summer.

2. As a result, I think the majority of people will be back in their offices by this September at the very latest, with many coming back much earlier. The whole hybrid/flexible work thing won't completely disappear, but the majority of people who used to work in offices will be back.

3. Recreational/fringe residential real estate will soften in 2022 as a result of 1) its tremendous run-up during this pandemic and 2) the renewed pull of urban/office life. Conversely, urban apartment rents will continue to rise and eventually surpass their pre-COVID levels. The SF Bay Area could be one exception.

4. The explosion of travel that I thought was going to happen in 2021, will truly happen this year. The summer will mark its official return, with European travel volumes (to give just one example) returning to their pre-COVID levels.

5. We will see meaningful efforts to further breakdown the hegemony of single-family zoning throughout many North American cities. This has been building for a number of years and I think we will see some tipping point-like moments in 2022. Specifically, expanded permissions for multi-unit housing and greater densities.

6. I wish I could say that autonomous vehicles are destined to do something truly remarkable this year, but I think we are still a few years out (2024-2025?) before a large chunk of us are ride-hailing AVs. But on a related note, I do think that Uber will come into its own this year and finally become profitable ( and not just with adjusted profits ).

7. Public transit ridership will, unfortunately, remain depressed and below its pre-COVID levels for this entire year. The beneficiaries of this will continue to be cars (not good), bikes, and micro-mobility solutions like e-scooters.

8. 2021 was a huge year for NFTs and other fun stuff like digital fashion. Given these trends, I believe there will be growing demand from people to better integrate their digital and physical lives through technologies like augmented reality. Snap has been at the forefront of this space for many years and 2022 will be an important year for its Spectacles (AR glasses). But Apple and others will also make major announcements.

9. Miami's ascent as an important tech hub will get interrupted by questions surrounding the climate crisis and its own resilience. At the time of writing this post, the price of carbon on the EU's Emissions Trading System ( EU ETS ) is about €80 per tonne. I think we will see it break €125 per tonne this year, and possibly go even higher.

10. Ethereum, Bitcoin, and Solana (in this order) will be the top three cryptocurrencies according to market cap by the end of the year. At the time of writing this post, their market caps are $446 billion, $895 billion, and $55 billion, respectively. I am also expecting some breakout web3 consumer applications that will push, maybe, 40% of Canadians and Americans into the crypto space.

Photo by Dave Xu on Unsplash

Past performance, we are often told, is not necessarily indicative of future results. At the same time, history has a funny way of repeating itself. I recently stumbled upon this research paper by Marc Francke (University of Amsterdam) and Matthijs Korevaar (Erasmus School of Economics) looking at the impact of pandemics on housing markets. More specifically, it looks at the impacts of the bubonic plague on 17th-century Amsterdam and of cholera on 19th-century Paris. Here's an excerpt that summarizes what they found:

Our analyses for both cities point to substantial impacts of pandemics on property prices. We find that sales prices respond negatively to outbreaks, in particular in heavily affected areas, and that responses are short-lived, with the effects on sale prices being particularly significant in the first six months of an epidemic. Evidence from aggregate house and rent price indices suggests a smaller negative impact on rent prices. Amsterdam and Paris were very resilient to these outbreaks, with population and house price growth quickly reverting to prior trends.

This paper was first published at the beginning of 2021. A lot has changed since then and, in some ways, their findings now seem obvious. There was still a great deal of uncertainty in the market 12 months ago. While it seems like eons ago, I remember our team having discussions around when would be the right time to launch sales for One Delisle. Of course, 2021 turned out to be a record-setting year for housing and that includes the core/urban housing that the media was quick to write off at the onset of COVID.

This is not to say that certain things haven't changed or that there won't be further changes -- both positive and negative -- that come out of this. To give one just example, we all continue to hear anecdotal evidence that a lot of tech talent would now prefer to be in cities like Miami over San Francisco. (I'm not tech talent, but this would be my strong preference.) Did the pandemic help fuel this? Probably. It opened a door for the people who no longer wanted to live in a city with such a supply-constrained housing market. (I'm sure there were other reasons, too.)

These things, of course, happen. Cities are powerfully resilient, but they still need to compete. The bigger point is that cities continue to be our greatest centers of opportunity. And here we have centuries of data and housing records to support the fact that opportunity is both a powerful motivator and a centralizing force for urbanization. This is true even in the face of things like pestilence.

Happy new year, everyone. I think there's a lot to look forward to in 2022, including far less talk about pandemics and hopefully far more talk of places like Miami.

Photo by Adrien Olichon on Unsplash

Following my recent post about the largest cities in the world (from 100 to 2015 CE), a number of you rightly pointed out that the data looked questionable. Where, for example, is Shanghai in this latest list of largest cities? So I think it's important that I do a follow-up post.

There are a number of nuances to consider when trying to measure urban populations. Perhaps the two most obvious are the geographic extent of each city (i.e. what urban boundary do you use) and the number of people living in informal settlements.

The UN recently estimated that there are some 1 billion people living in slums or informal settlements. That represents nearly a quarter of the world's urban population, which is a staggering number and a pressing global need. We desperately need more housing.

When it comes to measuring the size of an urban agglomeration, most of the studies that I have seen tend not to focus on municipal boundaries ("city propers") or metropolitan areas. The former is often based on arbitrary political boundaries and the latter often contains undeveloped rural land.

So for the purposes of this post, I'm going to go with Demographia's definition of "built-up urban area." They define this as being a continuously built-up area with one labor market and with no rural land. In their view, the world is either urban/built-up or rural. The built-up part is the lighted area that you would see on a nighttime satellite photo.

Given this definition, there are a number of interesting fringe cases. For example, contiguous/adjacent urban areas with more than one labor market get split up into multiple ones. This is the case in the US with the northeastern "megalopolis" that runs from Boston to Washington.

Conversely, if adjacent urban areas share a labor market and are linked together by similar commuting flows, then they get grouped into one urban area. This might be the case even if the area(s) straddle a national border. In this particular case, the free movement of people and goods would be another prerequisite.

With these definitions out of the way, below is another stab at sharing an accurate list of the world's largest megacities or built-up urban areas. This is one is by Demographia and there are a number of key changes compared to the last one I shared. Shanghai now features in the top 10. But Lagos drops down to number 20, which remains a bit of a question mark for me.

For a copy of Demographia's full report, click here . It looks at all urban areas with a population greater than 500,000 people (total is 985). Of course, if any of you have any other data sources that you think I should take a look at, feel free to share them in the comment section below.