Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 84

Fred Wilson chose the perfect quote by William Gibson, here , to describe the current status of self-driving cars: "The future is already here — it's just not very evenly distributed." That's how it feels right now.

Waymo isn't in Toronto yet, but they are expanding rapidly throughout the US and elsewhere. Last week they announced fully autonomous driving in five new cities: Miami, Dallas, Houston, San Antonio, and Orlando. Autonomy is here, as we have talked about many times. There's no longer a question.

But what's interesting is that we're at the point in the hype cycle where expectations are not as inflated as they were a number of years ago (at least that's the way it appears to me). Years ago, everyone in real estate was talking about how it would disrupt parking requirements and reshape the landscape of our cities.

So when does this happen?

Fred ended his post by saying that "the downstream effects of this technology and behavior change are going to be profound." But he doesn't get into what these changes might be. Let's do a reminder of that now. Some of the most commonly believed consequences are as follows:

• Cars consume a vast amount of real estate and also spend the vast majority of their lives just sitting around idle. Switching to a "mobility-as-a-service" model will require dramatically less parking. This is going to force landlords to repurpose the parking they already have and it's going to encourage developers to build new buildings with reduced parking, or no parking at all. That will be good for housing affordability.

• However, the autonomous vehicles will need to park and corral somewhere at some point. My guess is that we will see something akin to rail yards today. This would be a good use for some of our excess parking, though this use won't require nearly as much. I would also imagine that many of the cars will leave the most valuable and dense parts of a city during off-peak periods.

• At the same time, it's not clear what the winning business model for AVs will be. Will it be a Waymo-like model where the ride-hailing company owns and operates all of the cars? Will it be a Tesla Robotaxi model where individuals own the cars and put them out to work? In this case, maybe the Robotaxis just go back to people's individual garages. Or will Uber remain the dominant platform? Meaning, an asset-light model that aggregates customer demand remains the highest-value component of the stack. Personally, I can't see Tesla's Robotaxi model being very lucrative for individual owners, so I'm inclined to look toward Waymo and Uber.

• Street parking will be replaced by a proliferation of pick-up/drop-off zones. This urban design problem will need to be solved as we dramatically increase the number of people getting in and out of AVs on busy urban streets.

• In the mid-1990s, Italian physicist Cesare Marchetti remarked that, all throughout history, humans have tended to cap their commute times at about 60 minutes per day. Something like a half hour each way. This became known as Marchetti's Constant . What this has meant is that as new technologies (streetcars, cars, and so on) allowed us to move faster within that 60 minutes, humans have tended to sprawl further outward. Will AVs do the same, and could they actually break Marchetti's Constant?

• As we all know, the key difference with AVs is that we will no longer need to pay attention to our commute. We could sit in an AV and sleep, work, watch a movie, or do whatever else we'd like. One can think of it like a mobile office or mobile living room. This should, in theory, make commuting long distances a lot more enjoyable and encourage even greater "super sprawl."

• The counterforce to this phenomenon is that if more people are willing to commute long distances in an AV, we will see demand greatly outstrip supply on our roads. In other words, traffic congestion in large cities will get even worse. I think this will force more/most cities to adopt congestion pricing. Politically, it will finally become acceptable, because now we'll be able to use "the machines" as our scapegoat. They're overrunning our cities! Ironically, this means that we won't adopt the thing that makes driving a lot better until we all stop driving.

So where do these opposing forces ultimately net out? Well, my view (and bias) is that human-scaled walkable communities will always have value. We are social animals. I also think that the experience within our cities will improve dramatically. Pedestrian safety will increase (the data already supports this) and far less space will be dedicated to cars. Good.

At the same time, I think that reducing commute friction will encourage an exurban explosion. Like the technologies that came before AVs, it's going to empower humans to further decentralize. What this will do is exacerbate the divide between our urban cores and our suburban and exurban fringes.

Of course, this is just me surmising. I don't really know. But AVs are here, and I think it's time we get back to discussing and planning for the second and third-order effects of this technology.

View post on X →

Rental apartment completions in the Greater Toronto & Hamilton Area (GTHA) are expected to exceed condo completions for the first time in a very long time starting in 2028 . But what does this mean for the overall market, and is it actually going to be enough new housing? Let's look at some of the numbers.

Last year, the GTHA recorded 29,671 new condo completions. This was some sort of a record. This year, condo completions are projected to total around 31,396 homes . Even higher. But then completions start to fall off, with 17,487 homes scheduled for completion in 2026. By 2029, this number is expected to be close to 1,000. So let's call it zero for argument's sake.

If we are to crudely assume that 50% of these new condominiums ultimately make it to the secondary condo rental market, then we are expecting nearly 16,000 condo rentals this year, just under 9,000 condo rentals in 2026, and ultimately no new condo rentals by around 2029 (or some number close to it).

Now let's consider the purpose-built rental side of the equation.

The 10-year average for purpose-built rental apartment starts in the GTHA is only 2,819 homes . This is a far cry from the volume of rental housing that we delivered in the 60s and 70s . Of course, with the new condominium market largely shut off, there's renewed interest in building purpose-built rentals.

In 2024, purpose-built rental apartment completions totalled 5,537 homes . And in the first half of this year, 3,156 homes reached the occupancy stage. Extrapolating out, I'm guessing that puts us somewhere around 6,000 new purpose-built rental apartment homes by the end of 2025.

If we pause and think about only 2025, we're on track to deliver roughly 37,000 new condo/rental apartments and ~22,000 new rental homes (again assuming 50% of the new condominiums become secondary rentals). I view this as our peak supply year for this cycle.

There's a lot of talk about a "record" number of purpose-built rental apartments now under construction, and while it is true that the numbers are elevated compared to the latest 10-year average, it is not a long-term record compared to the 60s and 70s and, more importantly, it is not enough to offset our dwindling new condominium supply.

Even if purpose-built rental completions spiked to 8,000 or even 10,000 new homes next year, we are still going to see a drop in new rentals and new housing overall in the GTHA. 2026 is the turning point year where new supply turns south. And it's going to keep going south until probably 2029, which is when I believe we will see supply bottom out.

Nothing in this post should be construed as investment or development advice, but here's the way I'm thinking about it:

• 2025: ~37,000 new condominium/apartment homes (peak supply year resulting from the pandemic boom)

• 2026: ~25,000 new homes (supply begins its decline)

• 2027: ~18,000 new homes

• 2028: ~10,000 to 13,000 new homes

• 2029: ~8,000 to 10,000 new homes (supply bottom)

I have no idea what will happen with interest rates, immigration, investor sentiment, and the countless other factors that impact a housing market, but even if things started to turn around next year, it would be mostly impossible to avoid the housing supply bottom that I believe we have coming in 2029. Buildings take a long time to build.

Conclusion: I think that 2026 will prove to be an excellent year to buy assets (land, unsold inventory, IPP, and so on), and that 2028 onward will be an excellent time to be delivering new homes. By then, we should be dramatically undersupplying the market. It doesn't feel that way today, but eventually the bill from our frozen development market will come due.

Cover photo by Adam Vradenburg on Unsplash

We all know the concept. Now here's an interactive map that allows you to explore cities around the world and see how 15-minute they are. In the default case, it is based on how many points of interest somebody could walk to in under 15 minutes (but there's also a bike toggle). A blue cell means the walk time is less than 15 minutes. And a red cell means it's greater than 15 minutes.

Here's Toronto:

Salt Lake City:

Houston:

Miami:

Paris:

Tokyo:

I tried not to adjust the scale at all, but the amount of blue/red you see will depend on the cropping of each map. Still, it's pretty clear that Tokyo and Houston are not the same kind of city. What a contrast.

In some cases, though, I think the blue areas could be, in a way, overstated. Technically, I'm sure the data is right, but practically speaking, a blue area may not be very pedestrian oriented, meaning most people still drive. This is where good urban design factors. A 15-minute walk will feel very different depending on what you're walking on and through.

Maps from 15-min-City ; cover photo by HANVIN CHEONG on Unsplash