Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 878

The European Union uses something called the Nomenclature of Territorial Units for Statistics (or NUTS) in order to geographically subdivide its member states and collect statistical data. There are three scales: NUTS 1, 2, and 3. And generally speaking, they follow existing administrative boundaries. Or at least that's the goal.

In addition to being used for collecting statistical data, they also form the basis for how the EU implements its " cohesion policies ", which are designed to direct funds toward less developed regions within the Union based on GDP per capita (PPP).

Because these NUTS impact funding allocations and because they can be redrawn if certain criteria are met, there's not surprisingly an incentive to gerrymander. The Pudding has a great visual essay that explains why this happens and how Hungary split its central region into two new ones, isolating its capital, Budapest.

Big cities tend to be, of course, more developed than their surrounding areas. But it is interesting to see by how much. Though an extreme outlier, the Inner London - West region has a GDP per capita that is 625% the EU average (2017 numbers).

Image: The Pudding

As of August 2018, the City of Toronto has allowed laneway suites (accessory dwelling units) to be built as-of-right in the Toronto and East York area of the city (subject to meeting some criteria).

This was a tremendous step forward for the city. And I know a number of people who are currently taking advantage of these new planning permissions.

Toronto is now looking at expanding these permissions across the entire city and they have just started their community engagement phase. The first public meeting took place today and the next three will be taking place over the course of this month. Click here for the when and where.

This is a natural extension of the policies that have already been put in place around laneway suites and I'm excited to see this moving forward.

For those of you who already own property in Toronto & East York and are considering building a laneway suite, there are two programs that you should be aware of.

The first one allows eligible property owners to defer development charges on the new secondary dwelling unit for up to 20 years. This is meaningful. And the second is a $50k forgivable loan if you make the laneway suite an affordable rental for at least 15 years. (The cap is the City of Toronto Average Market Rent .)

I still remember what happened when I tried to build a laneway house almost 10 years ago. I was told, by the city, that a house cannot be built behind another house. I knew that would change. Now look at how far we've come.

Image: Lanescape

Wired's oral history of how the London startup scene came to be is a good reminder that, typically, a city needs some great big exits (acquisition or IPO) to really kickstart an ecosystem. In the case of Silicon Valley, you could perhaps trace things back to Fairchild Semiconductor (1950s) . But a more recent example of this phenomenon would be the PayPal Mafia , whose members have gone on to found Tesla, LinkedIn, YouTube, and other companies that you may have heard of.

Put simply: success begets success. When a startup does really well and the founders and employees of that company get rich, it is likely that many will go on to found/fund other successful companies in that same city. In the case of London, that catalytic startup was arguably Skype (at least according to Wired). Microsoft acquired the company in 2011 for $8.5 billion, giving birth to the Skype Mafia . Of course, that wasn't the only ingredient, but it sure helped (excerpt from Wired):

Since 2008, according to data compiled by Dealroom.co, the UK has created 60 unicorns (tech companies valued at $1bn or more) – 35 per cent of the 169 created across Europe and Israel. In the past three years, the UK has created more unicorns (25) than France, Germany, the Netherlands and Sweden combined (19). And London has produced 23 unicorns with a combined value of $132bn, compared with Berlin’s eight, worth $32bn.

The world has changed since Skype was founded. It's now cool to be doing a startup. But given that every city seems to be trying to establish a thriving startup scene, I think it's valuable to point out just how important a single big exit can be, not just for the people within the company, but for the broader city. Easier said than done, right?

Photo by Benjamin Davies  on  Unsplash