Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 904

Perhaps for obvious reasons, I am interested in how important issues get debated. I have written before about how I think the community engagement process for new developments is largely broken. I think it naturally incents certain kinds of feedback.

Recently, I've been playing around with an online platform called Kialo . They call themselves "an easy to use, yet powerful tool to engage in thoughtful discussion, understand different points of view, and help with collaborative decision-making."

The site works by trying to create a structured hierarchy of pros and cons around debatable questions. You participate by making claims (supported by links). Duplicate claims are neatly grouped together. And unthoughtful suggestions are moderated out.

The UI looks like this (top level question shown):

But you can then drill down into specific claim groupings (note the org chart looking graphic at the top):

I'm not yet convinced that it creates the "collaborative reasoning system" that they are after (maybe because I haven't used it enough). But I do really appreciate the structure and civility that they are trying to introduce to topics that are often vehemently debated.

Are any of you regular users of Kialo?

According to Amazon's recent annual 10-K filing , the company leased and owned (most of their space is leased) about 288,419,000 square feet of space around the world at the end of 2018. Of this number, about 80% is used for "fulfillment, data centers, and other." Amazon doesn't break out this line item any further, but GeekWire reckons that a good 3/4 of their real estate is dedicated to their fulfillment warehouses.

Here's the full summary of their facilities (from the 10-K filing):

Given that fulfillment is such a large share of their properties, I am most interested in understanding the geography of their warehouses and how that impacts their core value proposition, which is largely all about convenience.

In April 2017, Jean-François Houde (of Cornell), Peter Newberry (of Penn State), and Katja Seim (of UPenn) published a paper on this very topic called, " Economies of Density in E-Commerce: A Study of Amazon’s Fulfillment Center Network ."  There's also this Knowledge@Wharton podcast on the paper if you're looking for a quicker listen or read.

In the early days of online retail, the decision of where to warehouse had meaningful tax implications. Because (in most cases in the US?) you only had to collect sales tax if you had a physical presence in the same location as your purchasers.

As that changed, it then made more sense to create a broader distribution network and minimize the distance between fulfillment center and purchaser. By 2016, Bloomberg estimated that nearly 78 million Americans lived in a zip code where Amazon offered free same-dame delivery. That number has obviously increased since.

And in the paper "Economies of Density", they discovered the following cost savings as a result of Amazon's growing fulfillment network:

We find that Amazon saves between $0.17 and $0.47 for every 100-mile reduction in the distance of shipping goods worth $30. In the context of its distribution network expansion, this estimate implies that Amazon has reduced its total shipping cost by over 50% and increased its profit margin by between 5 and 14% since 2006. Separately, we demonstrate that prices on Amazon have fallen by approximately 40% over the same period, suggesting that a significant share of the cost savings have been passed on to consumers.

The interesting question for real estate people and city builders -- which is brought up in the Knowledge@Wharton podcast but is difficult to answer -- is whether there are diminishing returns to this "economies of density" phenomenon. In other words, how dense does Amazon's fulfillment network want to be?

This is last year's news and some of you may have already seen it, but here is a video of Zaha Hadid's only completed private residence:

https://www.youtube.com/watch?v=kkEPkKF0XGA

It was built in the Barvikha Forest near Moscow. The client, Vladislav Doronin, is a real estate developer. He owns/runs Capital Group , OKO Group , and Aman . Zaha used to call him the Russian James Bond.

The central idea behind the house is the raised master bedroom suite. Vladislav wanted to wake up and only see trees and sky. And so Zaha raised the bedroom 22m above grade.

Look at it in section (those stairs!):

It wouldn't be my first choice, but I can appreciate its boldness. What are your thoughts on this house?

Image: Dezeen