Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 849

Emily Badger's recent piece on " how 'developer' became such a dirty word " has been getting passed around within the industry over the last few days. I had a chuckle when I read this bit:

The notion that development is inherently bad, or that developers are inherently bad actors, seems to ignore that the communities residents want to protect from developers were once developed, too, and often by people who made money at it. (That is, unless you believe in “ immaculate construction .”)

The article hits on a number of points that are absolutely true. There's generally a lack of understanding around the economics behind new housing. And the cost structures, today, are dramatically different compared to the suburban-industrial complex.

To provide one example, our cost consultant, Finnegan Marshall , recently shared with me a chart (dated April 2019) that broke down the various government fees that typically make up every new condo suite in Toronto.

What it showed is that between 20-24% of the price of a new condo is generally compromised of government fees and taxes that span all three levels of government. This includes everything from development charges ( impact fees ) to parkland dedication.

Similarly, the article quotes one developer from Montgomery County who estimates that the impact fees alone for his projects are usually upwards of $60,000 per housing unit. (This is pretty cheap compared to Toronto.)

I raise this as an example because development charges/impact fees have become an important source of revenue for cities across both Canada and the US. They often offset lower property taxes. (Whether this is appropriate is an entirely other debate.)

And so I find it paradoxical that many homeowners would like to simultaneously see lower property taxes, no new development, and more public services and infrastructure.

Photo by  EJ Yao  on  Unsplash

Today I'm excited to announce that the Junction House Sales Gallery has just received a Best of Canada Award (2019) from Canadian Interiors. Link, here . Shout-out to Dialogue 38, Vanderbrand, Unique Urban Homes, Superkul, and the rest of the team for making it happen. We are fortunate to have had such a cool space to work with. It was previously occupied by the art studio, Moss & Lam. And so from the very beginning the idea was always to find the right balance between old and new, raw and unpolished, playful and luxurious.

Some of you may also not be aware that before we converted the above studio into a condo showroom, we donated it to a number of creative groups who were looking for space, but maybe didn't have a lot of (or any) money. Lost & Gone used it to host an immersive rendition of Romeo & Juliet (video of the performance, here ). DJ and designer Steve Aoki used it to launch one of his Dim Mak collections (okay, he has a lot of money). And Secret Walls used it for a live art battle. In fact, Secret Wall's markings are still present within the Gallery if you look up toward the ceiling.

Before we came along, the space was used as an art studio. That's an important part of the Junction House story and we wanted to commemorate that in the build out of the Sales Gallery (the "Gallery" part is meant to reference this past use). It is also one of the reasons why we partnered with Ben Johnston for this "Forever" mural on the outside of the building (yes, we see the irony); why we created a place for artists to showcase their work (currently Leeay Aikawa ); and why we commissioned a celebrated local artist ( Thrush Holmes ) to create a custom piece for the future lobby of Junction House .

Art matters.

Benedict Evan's most recent blog post, called " Amazon as experiment ," draws some interesting parallels between what Amazon is doing today (and experimenting with) and the beginning of mass retail, namely the invention of the department store. He also talks about some of the shortcomings of Amazon's model, which isn't at all focused on (or good at) things such as "pleasure" and product discovery. Here are a couple of excerpts:

On the other hand, it’s interesting that Amazon seems to be doing as much experimentation as possible around the logistics model—from stores to drones to warehouse robots of every kind—but much less around the buying experience, other than small-scale tests of the Four-Star stores. After all, historically, department stores were about pleasure as much as they were about convenience or price. They changed what it meant to "go shopping" and helped turn retail into a leisure activity.

This has always been the gap in the Amazon model. It’s ever more efficient at finding what you already know you want and shipping it to you, but bad at suggesting things you don’t already know about, and terrible whenever a product needs something specific—just try finding children’s shoes by size.

This is probably inherent in the model. For Amazon to scale indefinitely to unlimited kinds of products, it needs to have more or less the same commodity logistics model for all of them. That’s the line it’s never been willing to cross. Amazon doesn’t do "unscalable." And yet, while we now know there is nothing that people won’t happily buy online, not everything will fit that commodity model. So maybe that’s the real test of Amazon’s pride: can it work out how to let us shop, rather than just buy ?