A graphic novel for YIMBYs

As soon as Bryan Caplan’s graphic novel on Open Borders went up for sale, I ordered it. I had been waiting for this book to be published for a couple of years, both because I’m a big fan of how Bryan thinks about and argues for open borders, and because I was curious about the use of graphic novels as a medium for advancing a set of policy proposals.

I now think that the medium works very well. So well, in fact, that I’ve been thinking about other issues or policy proposals that might benefit from the graphic novel treatment.

My pet cause of course is housing, and specifically how land use rules constrain the supply of new housing in cities.

I’ve found that most people could be made sympathetic to the YIMBY cause after a short conversation of the need for and benefits of building more housing in big expensive cities.

Bring Hong Kong to Toronto

I came across a tweet yesterday that read, “Convincing Hong Kongers to become Chicagoans should be among the city’s top priorities for the next 5 years”.

This got me thinking.

I don’t think it would take much money to make Toronto top of mind for Hong Kong emigrants, given that we already have a large Cantonese speaking community both in the city and in Markham.

How much could the City do with $1M? Given the right agency partner, a lot.

The mere fact that the campaign would be officially sanctioned would propel it through media, including local Hong Kong media. The ads and other campaign materials would be secondary.

I think that this could materially impact many thousand destination decisions. With a $1M campaign budget, I’d consider anything north of 10,000 new immigrants over the next 24 months a success. And I think we could do much, much better than that.

This would ideally be paired with a federal announcement that Canada will welcome every Hongkongers now choosing to leave, but I’ll save that thought for a separate post.

More Canada

Today is Canada Day. I thought a lot about what it is that makes Canada great today, and what we should be working on to make it greater still.

As far as I can tell, the ability to attract smart foreigners from around the world is Canada’s greatest advantage, and may be the only one that really matters in the long run.

Though we do welcome record numbers of immigrants every year, it’s a bit surprising to me that we don’t welcome many more. More people typically means more ideas, which means more innovation and ultimately more economic growth.

There are few policy measures we could enact that would do as much to elevate our standard of living and our standing in the world as radically increasing our immigration targets. And thankfully, our federal politics have reached an equilibrium where all three major parties are extremely pro-immigration.

A country who’s politicians compete on who is more welcoming of immigrants is a country with a bright future. We just need to push them to compete harder.

Long Kanye

I’m going to buy some $GPS if and when it hits $12 USD next.

As you might have read last week, Gap is partnering with Kanye West to launch a new clothing line called Yeezy Gap in the first half of 2021. This will be a 10-year deal and comes in the midst of a steady decline in Gap’s fashion cachet and stock price.

Gap clothing hasn’t been cool in some time, and it’s an open question whether Kanye is cool enough to make it cool again.

I think he is.

I’m not much of an active trader — I typically just buy and hold the S&P500 — but I do have a loosely formed investment thesis to go long entrepreneurs I admire whenever I can.

At ~$4.6B, Gap Inc.’s market cap is small enough that this deal could have a material effect. And I want a piece of the upside.

On reading (more)

Charlie Munger wrote that, “in my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time — none. Zero. You’d be amazed at how much Warren reads — how much I read. My children laugh at me. They think I’m a book with a couple of legs sticking out.”

Herbert Hoover, arguably one of the most accomplished and impressive men in American history, read three to four hours every night. “At times it seems to me that I would exhaust all the books on earth,” he said. “But the supply still holds out.”

I love reading and don’t think that I read nearly enough. The backlog on my shelves and in my Amazon cart has gotten to the point where I would need to read one book per week for ~18 months to clear it. I currently average one book every three weeks.

I’d like to get to Hoover’s three to four hours every day. At that pace, averaging one book per week should be easy enough, even when accounting for the larger biographies that I like most.

Reading seems to be one of those activities with obvious returns that few people optimize for. I’m fairly confident that, among other things, reading more would provide me with more and better ideas for how to manage my career, business, and investments.

The disconnect between what I know to be good and true and what I do is very interesting to me. Keith Rabois proposed on a recent podcast episode that we all basically know what it takes to be successful (and healthy), we just don’t do it. I think that’s right, and reading more is a clear case in point.

Building rental housing

Most of what I do from day to day is work as a development manager for The Benvenuto Group.

I was offered this role through a series of serendipitous events that came out of advocating for more rental housing in Toronto. Though I was working as a project manager at a digital agency at the time, I had launched a YIMBY organization called Housing Matters that lead me to learn a lot about the mechanics urban planning and real estate development.

My thinking at the time was that I’d much rather help build rental housing than talk about how we need more rental housing, and the transition from activist to builder has been a good one. There are nuances to real estate development and construction that you can only fully appreciate when in the trenches.

In any case, I just received this cool drone shot of a purpose built rental building that we’re developing in midtown Toronto, and thought that I’d share it.

We’ve excavated to approximately a P3 level and will start pouring our foundations in the next week or two.

This building, when completed, will introduce 180 units of rental housing to the neighbourhood. In a City with a sub-1% rental vacancy rate, this is no small feat.

What is financialization

Some people think that we need to build a lot more housing to improve housing affordability in cities. Others think that that is an insufficient solution as housing has become “financialized”.

Last year, a Toronto City Councillor wrote about this for Spacing magazine.

“That’s financialization and it has nothing to do with the simple supply and demand curves taught in high school. It makes housing more expensive. It increases the concentration of wealth. It is an insanely risky way to run the biggest economic sector in the world.”

This word seems to be relatively new to the debate, and I think that I’m now just starting to understand what it means. Specifically, I understand financialization to mean three things.

First, the increased legibility of housing by global capital markets. Thanks in large part to the internet, the housing market has become more efficient as information asymmetries have eroded. It’s now much easier for an analyst in New York to get a good understanding of distant housing markets and allocate capital accordingly.

Second, predictable scarcity leading to housing as a store of value. Housing in most major North American cities is predictably scarce because a series of land use and other rules have made it hard to build. As a consequence, housing values in these cities typically increase at a higher rate than inflation. This makes housing attractive as a store of value.

Finally, an inflating money supply that contributes to and exacerbates the increased demand brought about by both of the points above.

To restate the point, these are all demand-side factors impacting housing prices and affordability. They do directly have to do with the simple supply and demand curves taught in high school.

Which is not to say that this couldn’t be a problem, or that we shouldn’t explore relevant solutions. Predictable scarcity for instance could become predictable abundance given the right land use policy reforms.

Abolishing parking minimums

Yesterday, Edmonton became the first major Canadian city to eliminate minimum parking requirements for any new development.

In Toronto, developers are required to provide one parking spot per unit for any new residential or mixed use building. These are rarely provided however, as the City is typically amenable to a lower parking count if requested through a Zoning By-law Amendment (rezoning) application or Committee of Adjustment hearing. This is especially true for any site that is well-served by transit. It’s not uncommon to see a ratio of 0.2 parking spots per unit downtown and 0.3 parking spots per unit in midtown.

Still, the requirement is on the books, and any variance requires City approval, at a cost of time, money, and predictability.

The case for eliminating these requirements has been building for some time, and many American cities, including Buffalo, Houston, Minneapolis, and San Francisco, have already made the change. Putting the economic, environmental, and health concerns to the side, it’s simply the case that developers are better positioned to determine demand for parking than the City.

It’s time for Toronto to get with the program.

One cool thing about this deregulatory proposal is that it’s one that finally has a critical mass of support behind it. There’s a broad coalition of interest and pressure groups that would welcome the change, including cyclists, environmentalists, and urbanists. You just need somebody to organize them all to get this done.

With a competent operator building public support and lobbying City Council and Planning, I believe that we could see a successful vote to eliminate parking requirements from our Zoning By-law within 2-3 years.

A bit about this website

I haven’t yet decided how I plan on distinguishing between content that should be blogged about and content that should exist on its own page.

For now, I think that new pages on this website will be used to collect and categorize content for easy reference.

I often get asked for book recommendations and often get dragged into debates over the best way to improve the affordability of housing in cities (and in Toronto in particular). That’s why I have a page on this website listing the books I’ve enjoyed over the past few years and another listing good academic studies on issues relating to housing affordability, including on the impact of land use constraints and rent controls on prices.

If you haven’t yet, you should check them both out.

As I think through the best way to organize a personal website, I take inspiration from these below, which you should also check out.

(Of course, now that I list these references, this looks like content that should exist on its own page. I’ll think about it some more.)

Hello world

This is my new blog, which I’d like to use to, among other things, explore issues relating to state capacity in handling megaprojects, both physical and digital. It seems to me that we don’t know how to build big things in a timely and cost effective way anymore, though we did 100-years ago.

In Toronto, we’re moving forward with plans for a much-needed downtown relief subway line, the Ontario Line, at a of cost over $700-million per km. In contrast, the median urban subway around the world costs less than $300-million per km.

There are many reasons why big infrastructure projects cost more and take longer to complete than they should, including but in no way limited to political interference. The Ontario Line is itself a reconfiguring of the older proposed Downtown Relief Line by a new Provincial government.

I think that it’s important to first understand that this is in fact the case, as most political debate seems to be centred on how to pay for these projects rather than how to pay less for them.

This extends to digital projects as well, evidenced most infamously by the Phoenix pay system, which could end up costing the federal government $2.2-billion (for software!) to complete.

If we could agree that we should be getting a lot more bang for our buck out of these projects, and start to identify and address the reasons why that isn’t happening, we could build ourselves a much better city, province, and country.

Given the potential benefits of competent state lead megaproject management, I think that much more attention should be focused on this problem than there currently is. And to that end, I’ll try to contribute in my own little way.