#30

1. When acquiring properties for midrise development, we focus on areas that can command rents of at least $4.00 per square foot (today) with no parking provided. We also prioritize relatively wide lots—at least 45 feet where no side yard setbacks are required or 55 feet where they are.
   
   The fewer lots we need to assemble to reach that threshold, the better. A single lot is ideal. Two can work, but it is difficult. Once you need three or more, the odds of securing a feasible deal drop significantly.
   
   Here’s the challenge: in those parts of the city where parking isn't necessary to command high rents, lot widths tend to be narrow. Meanwhile, in those parts of the city where lots are wide, parking is required to command high rents.
   
   Parking generally doesn’t fit our model as we rely on cost-effective construction. That means using alternative structural systems to conventional formwork and avoiding below-grade areas. A single level of underground parking requires excavation, shoring, de-watering, and extensive formwork, increasing the construction budget by 15-20%—with each additional level becoming even more expensive.
   

2. The Washington Post reports that Tesla is working to secure permits for a self-driving taxi service in Austin by the end of the summer and in California by the end of the year. The service would initially use Model 3s and Model Ys with a driver behind the wheel for added safety but is expected to transition to Cybercabs—with no driver and no wheel—by late 2026 or early 2027.
   
   I haven’t seen any public statements on how quickly Tesla plans to expand to additional cities, states, or countries.
   
   Elon Musk has a long history of underestimating the timeline for achieving full Level 5 autonomy, but it now seems we’re genuinely getting close. A year ago, Matt Yglesias argued that self-driving cars had become underhyped, and there’s been a lot of progress made since then.
   

3. There are other trends working in our favour when it comes to parking. To the extent that self-driving cars make me excited about the future, declining fertility rates don’t. As I approach 40, I’m struck by how few of my friends and acquaintances have kids. Childless urban millennial professionals are likely less inclined to require parking in a cool new rental building.
   
   We’re here to deliver what the market wants and can support, but I do think that this is bad for the city, the country, and the world. I’ll maybe save some of those thoughts for another time. That said, I don’t see it negatively affecting real estate prices or rents in the medium-term, given 1) sustained high rates of immigration and 2) the enduring appeal of cities in general and Toronto in particular.
   

4. I just finished reading Lionel Barber’s Gambling Man: The Secret Story of the World’s Greatest Disruptor, Masayoshi Son. I had been waiting for a solid Western biography of Son for a while, and this one did not disappoint. He’s a wild, flawed, but undeniably fascinating figure—an impressive case study in the power of conviction. Everyone says that they believe in technology and the promise of AI, but no one believes like Masa believes.
   
   I had lunch with a developer friend not too long ago who pointed out that most developers here are looking for sites and projects that will overdeliver, for alpha, often at the expense of only taking on a small fraction of the projects their capacity would otherwise allow. If you believe in Toronto’s future, as we do, you should probably be more interested in smart, broad beta exposure.
   

5. I’ve updated the event page for the upcoming Missing Middle Summit to include some names of confirmed speakers. Check it out and get yourself a ticket here.