Harbinger of a shift in automobile retailing and of the future of malls? With Tesla and car-sharing challenging what owning a car means, the traditional car manufacturers have had to get creative. In the latest – Mercedes is opening up “Mercedes me” stores in malls around Canada.
Speaking of redefining retail – Apple announced it is going to start referring to stores as “Town Squares” in an effort to turn their commercial locations into broader gathering places and “communities.”
Bloomberg short-lists the likely locations for Amazon’s HQ2 to six cities, with the caveat: “five could be eliminated by politics” (spoiler: five of the six cities are in the US, the sixth is Toronto). It’s a compelling argument considering Toronto actually meets the qualifications easily, though I’m not sure how Toronto’s incentives stack up against those of US cities. An interesting counter-argument was proposed by City Lab: how will Amazon employees deal with Ontario’s foreign-buyer’s tax? I don’t foresee this as a major issue, though, as a bigger chunk of that 50,000 workforce would be Canadian.
Meanwhile, tech companies are happy to pay premium rents in order to be closer to talent, upending traditional notions of lower-rent seeking as costs of labour for technology and professional services continue to grow as a share of operating costs.
Boomer’s aren’t leaving the suburbs (as fast as people thought). BisNow reports on the trends of baby boomers staying put in their suburban houses instead of moving to more connected, higher density living that many have anticipated would happen. In the same vein of miscalculation as millennials, those waiting for a boomer tsunami have not quite wrapped their heads around the fact that terms such as “millennial” and “baby boomer” are broad demographic categories, not a specific group of people who all have the exact same tastes and desires at the same time. Like millennials, boomers encompass a large age-group and people in that age-group are going to make key life decisions at different times, not all at once. So the lesson is: yes, boomers will eventually leave their large suburban homes and move to smaller, denser apartments in the city. However, it won’t happen until they’re too old to care for their homes, a phase which is easily 20-years away for those in the median of the age group and will take roughly 30-40 years after that. A trickle, not a tsunami.
The St. Louis Dispatch reports that brick-and-mortar retail isn’t dead, it’s undergoing a transition. Although we often hear much about malls and long-standing stores closing down, the actual numbers on brick and mortar retail reportedly show a net gain: retailers in the US built, on average, 4,000 more stores than they closed down in 2017. Now, this report comes from an industry group and I haven’t come across any data to check myself, but it’s an otherwise positive spin on what sounds like terrible news. So, the retail apocalypse isn’t an apocalypse, it’s just change.
Amazon made waves this week with an announcement that they were looking for locations for a second North American Headquarters. Thinkers, bloggers and mayors are rolling over themselves trying to guess or bid on why their city is the ideal location for the new Amazon HQ, while residents of Seattle are sending warnings. My take: Amazon isn’t posting this as a popularity contest. If they really were just interested in finding a good location alone, they would have announced the location with the news, not issued an “RFP” for cities to bid on. Amazon is looking for who can provide the juiciest tax break/incentive package here. I like this one clever Redditor’s theory: “Here is my guess: Amazon already knows but will sit by while city & states fight over with massive subsidies & grants. Eventually Amazon will ask whatever city they already chose if they can match it & then surprise everyone with their choice.”
Hurricane Harvey hit Houston over the weekend. News of the effects of the storm are widely available, but this piece from the Texas Tribune focuses on the lack of appropriate land-use and environmental regulations and their part in the fallout from the flooding.
Not a new article but something I came across this week; back in 2016 realty service Trulia published their findings on the effect of low-income housing on nearby housing values. They found that, out of 20 US metro areas analyzed, only 2 showed any negative effects on property prices from the construction of low-income housing. The key note in this analysis, though, is: “at least in cities where housing is either expensive or in short supply.” It’s a great study to keep in a back-pocket for that debate, since the overall message seems to be that in rapidly-growing urban areas the property value uplift from demographic and demand factors is so strong that the development of affordable housing is unlikely to affect it.
Millennials are moving to the suburbs after all, reports Bloomberg. This has always been a strange battle between the demand side (industry) and the supply side (policy-makers). Of course the more rational answer is that it’s both, but identifying an underlying cause for why Boomers embraced sub-urbanization and why millennials haven’t (thus far) hasn’t been as straightforward as many would think. My answer has lain in the demographics – millennials are starting families much later than our parents did, so the desire for a suburban lifestyle has been more delayed than completely replaced. Additionally, it’s also been less an issue of personal choice, as the economic fallout of the Great Recession has definitely played a major role in many young people’s abilities to afford the suburban lifestyle (buying a house and a car). As the economy has recovered and young people are finding gainful employment again, they seem to be embracing the suburban lifestyle.
Japan, ever struggling with an aging population, also has to contend with rising urbanization and what it means for smaller towns and rural areas.
The NYTime wrote a piece on “co-living spaces” – communal housing units where resident apartments are limited to the basics (bedroom+bathroom?) and other spaces, such as kitchens, dining, living areas are all shared. The most interesting bit of the article, for me, though is “You won’t find much of that outside the building, which is why this Urby is essentially a vertical — and interior — neighborhood.”
I’ve often wondered about the intersection of the technology industry and urbanism – will we have a resurgence of the old “company town”? Considering many of North America’s major technology hubs are in existing cities, it might be a different evolution. In that theme, the Seattle Times wrote about Amazon’s footprint on the city.
Last week the Toronto Star published an article profiling a study from the School of Urban Planning at McGill University on Airbnb’s inventory of commercial operators running “ghost hotels” as opposed to regular people renting out empty rooms in their houses. This issue has been raised by other outlets in the past (such as this one by fivethirtyeight). This week, Fast Company profiled another study from researchers at MIT, UCLA and UNC which found that Airbnb has a not-insignificant-but-not-huge effect on area rents. However, the study also finds that the share of commercial operators in a zip-code affects the increases in rent, or “the effect of Airbnb is smaller in zipcodes with a larger share of owner-occupiers”.
Earlier this year researchers at Ryerson University found that much of Toronto’s low density neighborhoods are losing population and are, effectively, “over-housed”. The reason for this, the research finds, is that these neighborhoods are largely inhabited by empty-nesters or seniors. For younger people priced out of the housing market who are hoping to live in a low-rise home in the future, this may be a sign of hope. As residents of these units age and decide to downsize to a smaller unit, these homes would become available and add to the housing market. However, what most people often fail to note is that the retired, empty-nesters and seniors comprise a very large age-group. New research from the Altus Group shows people don’t generally downsize to an apartment or assisted-care home until well into their later years (80s, according to this report). With the current median age of the Baby-Boomers in the late 50s, there’s easily another 20 or so years before the tipping point. In the meantime, it’s could mean increasing supply or trying other, unconventional methods.
Here’s an interesting post on the “aspirational appeal” of the suburbs for African-Americans and how the demographics (and politics) of suburbs are changing. UrbanEdge did a Q&A with Pete Saunders (who wrote the blog post) to dig a little deeper into it.
I noted happily how dockless bikeshares are catching on, but are investors who are pumping money into these services doing so because they’re cycling evangelists? Maybe, but it’s more likely because bikeshare services are another way to mine data about customers.
In this week’s edition of Didn’t-We-See-This-Coming, some of Apple’s employees aren’t so peachy about the open plan concept of their new digs.
Citylab (referencing this report by the National Association of Realtors) takes another look at foreign investors (specifically Chinese investors) in the US housing market. Key point: “As a group, [Chinese buyers] surpass top buyers from Canada, the U.K., Mexico, and India. Between April 2016 and March 2017, Chinese buyers purchased more than 40,500 housing units, worth a total of $31.7 billion. That’s up from of 29,000 units and $27.3 billion the year before. Sixty-seven percent of those units were single-family homes, and 61 percent of all sales were made in suburban areas.” What’s really interesting, however, is if you look at the data in the NAR report. After Chinese buyers, the biggest foreign buyers in the residential market in the US are Canadians. Makes me wonder, if Canadian investors are willing to spend this much money on real estate in the US with the exchange rate where it is, how much are they spending on investment properties in Canada? It’ll be interesting to see how this rolls out with the new measures as well as further measures coming up (Globe and Mail did a quick take).
The bike-sharing evolution continues with more dockless bikeshares popping up. Dockless systems are really going to be the key to shifting more people to cycling. They just provide that ease and convenience; you can pick it up anywhere (provided there’s one nearby) and drop it off anywhere. I wonder how this affects the services operations when bikes need to be relocated to keep up with high-demand areas.
Bisnow has a good discussion on the role that neuroscience is playing in the design of cities. The article is an overview of the relationship between urban design and behavioral psychology. It’s been fascinating to watch psychology take over the field of economics and slowly make it’s way to other disciplines (one of the pioneers in behavioral economics, BEWorks, is hosting a “nudgethon” for public transit in Toronto in September). While the recognition is new, the notion that urban design ought to follow user experience rather than imposed design goes as far back as Jane Jacobs, who promoted an observational and ethnographic approach to urban planning in The Death and Life of Greater American Cities. Since then, planners have called for a rejection of rigid land-use models (such as euclidean zoning) and promotion of flexible uses (such as mixed-use and form-based zoning). Architect David Galbraith takes it a step further and encourages designs that allow for organic development. As he states in the post: “Cities of the industrial age looked mechanical, cities of the information age can look like fractal networks — like nature.” His solutions seem to echo how Japan manages its zoning code (for reference, in a simple video).
On the tech side, one of the really exciting things coming up mostly-behind-the-scenes is proptech (property+technology), or the intersection of real estate and technology. A classic case of this is how traditional realtors have been embracing tech, though it’s still focused on helping people find a house to purchase (I’m sure I can find more interesting examples if I actually search around). Here’s an interview from ZDnet with a data scientist from Zillow if you want a little case study. Now I’m not too familiar with Zestimate, but if anyone wants to get into the weeds, Kaggle has a competition on improving the error rate for the Zestimate.
The Toronto Star reports on renting in Toronto, where rents for housing have reached highs comparable to London and Brooklyn. The article describes how people feel like apartment hunting has become similar to dating, where everyone must now create a profile to attract landlords and get them to “swipe right”.
Rising e-commerce sales and advancements in robots is seeing a shift in the logistics and distribution market around the Greater Toronto Area, according to the Globe and Mail. One things I’ve always wondered about is the dwindling amount of employment lands for warehousing and logistics in the region and the increasing demand driven by e-commerce. With robotics, it seems that warehouses are going vertical.
Airbnb is rolling out a new feature called “experiences”. Tom Friedman wrote a bit about it in the NYTimes. In sum, it’s a way for Airbnb’s hosts to provide additional curated experiences for visitors. Some good examples are provided in the article, but the gist of it is, not being content to simply take on the hotel industry on the basis of providing accommodations alone, Airbnb wants to be a kind of “hands-off” concierge wherein hosts provide fun and interesting travel experiences to visitors.
There’s been a lot of debate about Elon Musk’s new Hyperloop proposal. Geoff Manaugh of bldgblog wrote a great critique of the Hyperloop and similar moonshot ideas for the New Yorker, but I feel as if everyone’s missed the point on this. Musk has no investment in Hyperloop. He pitched the idea 8 years ago and it’s been taken on by 3rd parties ever since. He has, however, put money down on a tunneling company. Musk is using the Hyperloop to sell his tunnel. The tunnel is the main thing here, not the Hyperloop. It’s Musk’s way of sparking the public’s imagination to take care of an age old problem (how can we build more tunnels and improve our transportation infrastructure?).