Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 597

With seemingly so much happening in the world these days -- everything from COVID to climate change -- it is perhaps easy to feel a little discouraged about the current state of affairs. But I am an optimist. And as I mentioned on Twitter a few weeks ago, I haven't been this excited about the future of tech and the internet in a long time.

We are seeing the auto industry quickly transition to electric vehicles (though, in my opinion, not driving at all is still better for our cities than driving something that is electric). Norway has created the world's first ever zero emission, autonomous cargo ship . And LIDAR vision systems are looking pretty promising as one of the technologies that will ultimately power fully autonomous vehicles.

I believe in the resiliency of cities and, as I have been arguing on this blog all throughout COVID, I think the claims about the demise of our cities have been greatly exaggerated. In fact, I think this pandemic has forced us rethink a lot of things about our urban environments, including how we allocate and use our public spaces (think patios). Some of these changes have been for the better and they're not going to go away.

I think the benefits of working in close proximity to others are too great to have everyone working remotely. Yes, we have learned that decentralization is possible. But there's an overwhelming amount of research telling us that we're all more innovative and productive when we cluster together in cities and in offices.

I have been back in the office almost 100% of the time since it has been possible to do that. And I am much happier and more productive as a result. There's also research suggesting that there are psychological benefits to a reasonable commute . It creates a break in our day, allows us to detach from our work, and gives us time to process stuff in our mind.

I think things like digital fashion and augmented reality are going to have profound impact on the way we consume things. You could also argue that there's a sustainability angle to more digital and less physical. And of course, I am excited about the transformations that I believe cryptocurrencies and blockchain technologies will continue to bring to many different industries (if not most).

This morning I was reading a Financial Times article about cryptocurrencies in the developing world. It it perhaps no surprise that many of these countries are providing to be early adopters. People are leapfrogging over to cryptocurrencies because their existing currencies and financial systems aren't effective enough. That has lead to adoption and penetration that looks something like this according to FT:

There is, of course, many other things to be optimistic and excited about. But I'll leave that for the comment section below. What are you excited about these days?

According to this RedFin data from 2019 -- which looked at normalized sale prices and Walk Scores above 50 -- it is about 23.5% or $77,668 for 16 major US metro areas. Again, this is 2019 data and so things may have changed a bit, especially with the whole COVID thing.

It also varies by metro area in this data set. The premium in Boston, for example, is almost 30%. Whereas the premium in Oakland is actually a slight discount (-1.3%). There are going to be local conditions that play a role.

But as a whole there is an economic trend here that makes intuitive sense to me. Though it's not just a question of how pricey your home is. You also need to consider your transportation costs, the value of your time, and the health benefits of living in an environment that promotes consistent and moderate activity.

When you factor all of these things, maybe "premium" isn't the right way to look at this.

Earlier this year, Enrico Moretti, who is a professor at UC Berkeley, published this research paper looking at the effect of high-tech clusters on productivity and innovation. (I am unclear if there is any relationship to the Italian brewing company Birra Moretti.)

One of the things he looks at in the paper is the decline of Kodak. Headquartered in Rochester, New York, Kodak famously missed the transition to digital photography. And so by the late 1990s, they were forced to start letting people go. The result was an almost 50% decline in the size of the entire "high-tech cluster" in Rochester.

But what Moretti goes on to test in his paper is the impact that this employment decline had on productivity and innovation outside of Kodak and outside of the photography sector (but within Rochester). And what he found was that between 1996 and 2007, the productivity of non-Kodak inventors dropped by about 20%!

This, of course, is one of the great features of cities. Even if you're not working at some big company with lots of smart people, just being in the same city, on the same block, or within the same office building, can make you more productive. It turns out that business ecosystems are pretty interconnected. Spillovers are important.

For more on this topic, check out this recent Wired article by Viviane Callier. In it she makes the case that remote work is going to negatively impact productivity and innovation over the long run.

Photo by Yassine Khalfalli on Unsplash