Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 875

Alex Bozikovic (architecture critic for the Globe and Mail) is one of the most vocal proponents of more housing and more density within Toronto's low-rise neighborhoods. Last year, he organized an international design competition where he asked firms to come up with innovative, yet sensible, solutions for how this could be done. I'm a little late getting to this, but today I'd like to walk you through this immensely clever solution by Batay-Csorba Architects , called Triplex Duplex .

The project uses two prototypical, but random, semi-detached lots from the Christie & Bloor area of the city. Each one is 18' wide x 100' deep. So your typical long and narrow lots. From the street (see above image), it looks highly contextual. But in plan, you begin to see the 3 main volumes of the project emerge. Here's a ground floor plan from the architect:

Each volume is around 2,500 square feet. I presume that includes the basement. If you exclude the basement area and the vertical voids throughout the project, which you're allowed to do in your calculation of gross floor area in residential zones, I suspect we'd arrive at an FSI (density) number that isn't that much more than what already exist in these sorts of areas.

At the front of the house (right side of the above plan) is a set of stairs (and a patio) leading down to the front basement unit and a set of stairs leading up to the main front unit. An inset patio also forms part of this main entrance (image below), which is a great way of adding outdoor space while at the same time maintaining privacy across the units. These strategy is one of my favorite aspects of the project.

The rear units are similarly accessed at the back of the building. And the two middle units are accessed along the side of the house. All in all, this housing typology has the ability to accommodate up to 6 units: 3 main suites and 3 secondary type suites. By the architect's own estimate, this could result in 147,000 new housing units across the city if every lot occupied by a semi-detached house were to be redeveloped in this way.

But I wonder if any consideration was given to the secondary (basement) suites that may already exist in these zones. Because in some cases, and as beautiful as these homes may be, we may only be talking about 2 additional suites. Triplexes are also already allowed in some areas of the city. So does this ultimately achieve its intended goal, which is the creation of more "missing middle" housing in order to ease overall housing pressures? Or do we need to be thinking bigger?

As a follow-up to this post ( subscribe to stay connected), I am going to look at what a development pro forma might look like for a project of this scale. The numbers have a way of answering a lot of questions. That said, kudos to Alex for taking on this initiative and kudos to the design team for a pretty spectacular architectural solution.

All renderings by the talented Norm Li .

The average salary of a teacher in the United States was approximately $61,730 last year. This can make homeownership in high cost areas a challenge.

Here is a chart from Curbed :

Landed is trying to solve this problem by offering downpayment assistance to "essential professionals" -- starting first with teachers -- so that they can buy homes in and near the communities that they serve.

The way it works is pretty simple.

They'll contribute up to half of a traditional 20% downpayment -- so 10% of the value of the home -- in exchange for a 25% share in any future gains, or losses.

Put differently, for every 1% that Landed contributes, it takes 2.5% of any future appreciation (or depreciation). However, on an equity basis, they are actually putting up 50% of the required cash (in the maximum scenario) in order to get 25% of any future gains.

There's no monthly payment associated with Landed's money, but it does need to be repaid at the end of 30 years or when the homeowner exits the agreement, whichever comes first. Homeowners are free to repay Landed at any time should they decide to sell the property or they just want to pay them out.

Landed pitches the service as another version of "the bank of mom and dad." And for many prospective homeowners, I am sure that it makes all the difference in the world.

At first glance, it would seem that each homeowner also benefits from a kind of positive leverage. They only put up 50% of the required equity, but they get to enjoy 75% of the potential gains. However, each homeowner is also responsible for 100% of the carrying costs.

I ran a couple of quick return scenarios, assuming a $500,000 purchase price and a 10 year hold, in order to test whether Landed or the homeowner would receive a higher IRR once the property gets sold.

I didn't carry any transaction costs, but I did factor in principal recapture, as well as utilities, insurance, and maintenance.

My rough numbers suggest that it depends on the annual rate of appreciation. If appreciation stays close to the rate of inflation, it could tip in favor of Landed because they don't put out any money after t = 0.

But at higher rates of appreciation, the homeowner starts to benefit from the favorable 75/25 split at the end of the hold period.

Either way, Landed is providing a service to people who may not otherwise be able to afford to buy a home. That has value. Here's some more information on how it works, in case you're interested.

$UBER went public on Friday. Notwithstanding the initial stumble , Uber will go down in history as one of the most lucrative venture capital investments of all time.

The stock is down from its IPO price of $45 per share, but at that price, the initial seed investment of $510,000 that First Round Capital made back in 2010 was worth about $2.5 billion on Friday.

Here is a list of some of the other notable investors from Uber's seed round and what their initial investments grew to over the course of 9 years (chart from the WSJ ):

Of course, for every Uber, there are many more failed companies. And for every investor who turns $5,000 into nearly $25 million, there are many more who decided to pass on the opportunity.

In the case of Uber, many early investors couldn't see how the product could go mainstream. It initially started upmarket with limousines, which was actually a clever way to hack the chicken-and-egg problem that plagues marketplaces.

Many also wondered how many metro areas outside of San Francisco had the kind of urban density and supply and demand drivers to support this kind of a service.

Today, some nine years later and many billionaires later, lots of people -- including myself -- are still wondering: Will Uber turn out to be a great (i.e. profitable) business? Hindsight is always 20/20.