Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 899

I started my undergraduate degree as a computer science and physics student. But despite my love of technology (and physics, incidentally), I quickly realized that I didn't want to end up as a software developer. I was interested in so many other things: art, design, business, real estate, entrepreneurship, cities, and so on. And at the time, I was struggling to remain focused on writing code.

So by the middle of my second year, I decided to drop every single one of my classes and construct my own program until I figured out what I truly wanted to major in. My course schedule ended up spanning everything from the urbanization of ancient cities to the philosophy of aesthetics. It was a pretty great program if you ask me. But others wondered what I was doing.

I did, however, already have leanings toward architecture. It felt like the perfect combination of art and science. And so while enrolled in my made up program, I started exploring the possibility of transferring schools and switching majors. Around this time I also started meeting with architects to try and learn more about the profession and see if this is something that I really wanted to pursue.

I'll never forget this one lunch. The architect I met with -- who will, of course, remain nameless -- told me very clearly: "You should do anything besides architecture. If you like drawing become an animator. If you like design, do graphic design. Just don't become an architect." Naturally, I came out of that lunch and decided to spend the next seven years getting two degrees in architecture.

And even though I never became a licensed architect, and almost certainly never will, I would do it all over again given the option. I loved the journey and it is this circuitous journey that led me to where I am today, which is in a highly fulfilling career in real estate. I create new things and those things have the opportunity to improve people's everyday lives. I'm grateful for that. But the path was anything but clear at the time.

I am telling all of you this story because I was reminded of it when I read this fantastic article by Charles Duhigg called, Wealthy, Successful and Miserable . It is the story of how Charles, a Harvard Business School graduate, discovered that -- despite obtaining boatloads of financial success -- many of his classmates actually ended up miserable after school.

Sure, we all need and deserve basic financial security. And when we don't have it, money can really buy a great deal of happiness. But there's lots of research out there, some of which I have written about before, that suggests that happiness quickly plateaus once our basic needs are met.

As soon as we're no longer worried about money, we actually crave other things from our paychecks. We want it to also be a source of purpose and meaning. To give one concrete example, the article cites a study about a set of enthusiastic and high performing janitors in a large hospital. What was ultimately found was that they saw their jobs not just as cleaning, but as a kind of healing for the patients. They had purpose.

But what I found most interesting about the article was the discovery that finding happiness in life and business might require, or be aided by, a bit of struggle along the way:

And many of them had something in common: They tended to be the also-rans of the class, the ones who failed to get the jobs they wanted when they graduated. They had been passed over by McKinsey & Company and Google, Goldman Sachs and Apple, the big venture-capital firms and prestigious investment houses. Instead, they were forced to scramble for work — and thus to grapple, earlier in their careers, with the trade-offs that life inevitably demands. These late bloomers seemed to have learned the lessons about workplace meaning preached by people like Barry Schwartz. It wasn’t that their workplaces were enlightened or (as far as I could tell) that H.B.S. had taught them anything special. Rather, they had learned from their own setbacks. And often they wound up richer, more powerful and more content than everyone else.

We are, of course, talking about the "also-rans" at Harvard Business School. They're no slouches struggling to find work. But I don't think that negates the point being made here. It can be easy to get caught up doing what we think we ought to be doing when in reality we should be finding meaning in something we hopefully love doing.

There's a lot of debate within urbanist circles about whether or not supply alone can solve or at least mitigate housing affordability concerns. Richard Florida and others will say that, while beneficial, increasing supply isn't the be all end all. We need to be building affordable housing.

Edward Glaeser, Joseph Gyourko, and others have, on the other hand, argued that middle-income housing is a supply problem and that low-income housing is quite simply a demand-side problem,  which could be solved through things like a housing voucher program.

In other words, the cost of housing isn't necessarily the problem, it's the low income levels. One of the benefits of supplementing people's incomes is that it empowers mobility. People can then move to where there are jobs, as opposed to being tied to a specific neighborhood or city.

But this debate is arguably just about the extent of the supply benefits. Intuitively, it makes sense to try and match new housing supply with demand and economic growth. But how far can that take us, particularly in high demand and high productivity cities?

Glaeser (Harvard) and Gyourko (Penn) have a relatively recent paper out called, The Economic Implications of Housing Supply,  which looks at, among other things, the "implicit tax" imposed on development as a result of land use restrictions and other supply constraints.

Here are two excerpts:

We will argue that the rise in housing wealth is concentrated in the major coastal markets that have high prices relative to minimum production costs, and it is concentrated among the richest members of the older cohorts—that is, on those who already owned homes several decades ago, before binding constraints on new housing construction were imposed.

But in a democratic system where the rules for building and land use are largely determined by existing homeowners, development projects face a considerable disadvantage, especially since many of the potential beneficiaries of a new project do not have a place to live in the jurisdiction when possibilities for reducing regulation and expanding the supply of housing are debated.

If you're interested in this topic (and sufficiently nerdy), you can download a PDF copy of the paper here .

Photo by  chuttersnap  on  Unsplash

This morning BILD and Altus Group released their January 2019 new home sales figures for the Greater Toronto Area.

Here are the highlights:

• 1,362 new homes sold in January 2019 across the GTA. This is up 14% compared to last January.

• Of these, 942 (~69%) were condominiums (includes low, mid, and high-rise, as well as townhouses). And 420 (~31%) were single-family homes (includes detached, semi-detached, and freehold townhouses).

• Condominium sales volume is sitting only about 5% below the 10-year average and the benchmark price increased this month to $803,638, which represents a 12.5% year-over-year increase.

• On the other hand, single-family home sales are down about 53% from the 10-year average and the benchmark price decreased by about 8.1% compared to last year. It is sitting at $1,130,046.

While there continues to be a bifurcation in the new home market, we are seeing improvements across the board and the data is consistent with Altus' prediction that 2019 will see an increase in overall sales.

It is also important to consider how geography might factor into the above numbers. Here are the January sales numbers for the last three years broken down by region within the GTA:

Just under 80% of the new condominiums sold last month took place in Toronto, whereas only about 1.2% of the single-family homes sold last month took place in the city. You can count them on one hand. There were only 5.

So rather than just look at this in terms of housing type, I think the other way to interpret the data is that it could suggest strong and continued demand for centrally located and transit-oriented communities.

And that just so happens to translate into a condominium.

Photo by  Eugene Aikimov  on  Unsplash