Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 574

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Wired published a great article last week talking about "the 10,000 faces that launched an NFT revolution." What they are of course talking about are the CryptoPunk NFTs that I think most people would agree are one of the "OGs" of NFT art. Initially minted in 2017, they are usually credited with starting the NFT craze that we are all living through today. CryptoPunk #7523, for example, sold for $11.75 million. I think this is the most expensive CryptoPunk in the world. Either way, it is one of the most expensive NFTs out there.

But as I was reading through the article I was reminded of something. Toronto is doing an awful job celebrating the fact that an immense out of crypto innovation has and continues to come out of Toronto. CryptoPunks, which is Larva Labs , was started by two guys from Toronto who met at the University of Toronto. I know that it is still early days for crypto and web3, but why are we not telling this story to the rest of the world and using it to continue to attract the smartest and most ambitious people to our great city?

This is a missed economic development opportunity. And the door won't be open forever. If any of our city leaders are reading this post (which is unlikely), I would encourage you to give this some serious thought and take action.

On a related note, the above article is great evidence for Chris Dixon's argument that, " what the smartest people do on the weekend is what everyone else will do during the week in ten years ." Larva Labs was started by two software developers who worked during the day and used their evenings and weekends for new passion projects. CryptoPunks wasn't their first initiative, but it has obviously come to define them. Smart people need room to play and experiment. Often that happens after hours.

I was having a conversation this week with a few friends in the industry about the future of parking. We were specifically talking about Toronto, but I would imagine that much of this holds true for many other cities around the world.

Here in Toronto, it's not uncommon to see new parking spaces in central locations selling for upwards of $200k. For those that are not in the industry and not seeing the work and immense costs that go into building parking, this often comes as a surprise.

But as I have said many times before on the blog, parking is often a significant loss leader for new developments. Even at relatively high prices, most developers aren't covering their costs. So developers naturally aren't racing out to build more of it. They're trying to build just what is absolutely necessary for the market.

Given the strong incentives to build less parking, it's no surprise that parking ratios continue to decline. But consider some of the other parking headwinds:

• Parking minimums are (hopefully) set to be removed

• Push toward watertight undergrounds across the city (higher costs)

• Tipping fees for disposing of contaminated soil (higher costs)

• Increasing development charges / levies (higher costs)

• Introduction of inclusionary zoning (higher costs)

• Inflationary construction cost environment (again, higher costs)

There is a lag between changing cost structures and what the end consumer sees and feels. Junction House, for example, is fully tendered from a construction standpoint and so we are building with a kind of historic cost structure that would be impossible to replicate today. When the next project comes around, they'll have higher costs and will have to price their homes accordingly.

As rising costs and new policies (like the ones I mention above) begin to work their way through the system, I think it's fairly obvious that parking ratios will continue to be one of the first things that gets looked at and ultimately chopped down. This will make parking even more scarce in the city and surely far more expensive.

(Back in 2018, Hong Kong had the record for the most expensive parking spot in the world . I wouldn't be surprised if it still holds this title.)

But as I have argued before, I am of the opinion that building around the car is not the way to build big and well-functioning global cities. Many of us recognize that we need to focus on alternative forms of transport -- everything from public transit to new micro-mobility solutions. And given where costs are going, I don't think we'll have much choice.

Photo by Sven Mieke on Unsplash

So, this seems dumb .

San Francisco's Board of Supervisors recently voted 8-3 in favor of rejecting a new 495-unit residential project at 469 Stevenson Street in SoMa. The property is currently a parking lot used by Nordstrom.

Of the project's 495 units, 73 were to be offered at affordable rents (about 14% of the project). In addition, the developer was prepared to donate a nearby parcel for additional off-site affordable housing. This would have brought the total count up to 118 units (or about 1/4 of the project).

Apparently gentrification was a serious concern with this project:

“It’s very clear to me that this will have a very significant displacement and social-economic impact on the Sixth Street corridor, on the Filipino community, and the broader low-income community here,”  said  District 10 Supervisor Shamann Walton.

The mayor seems to get it though:

“This project met all the criteria for approval, and it would have created 500 new homes on what is currently a parking lot surrounded by tall buildings, located near transit,” Breed told the Chronicle. “We can’t keep rejecting new housing and then wondering why rents keep rising.”