Navigating Major Programmes

You're listening to Navigating Major Programs, the podcast that aims to elevate conversations in the infrastructure industry. We'll press the industry's experts on the complexity of megaproject management, emerging artificial intelligence, and the critical leadership required to approach these multibillion-dollar projects. I'm your host, Riccardo Cosentino. I bring over two decades of major program management experience. Most recently, I acquired my master's in major program management from Oxford University's Business School, which shook my beliefs about major programs. Now it's time to shake yours. Hello, everyone, and welcome to a new episode of Navigating Major Programs.

I'm here today with a returning guest. I'm here with Mati Semetiki. How are you doing, Mati? I'm great. Thanks for having me, Riccardo. Thank you for coming back. Really looking forward to this conversation. Maybe for the guests that missed the episode in the previous season, maybe a quick reminder of who you are and what you do, and then I'll explain why you're here. Sure. I'm Matty Simioticki. So I'm the Director of the Infrastructure Institute and Professor of Geography and Planning at the University of Toronto. I've been studying and working in the infrastructure space for now going on about two decades. And my work has spanned the project delivery side.

So I've done a lot of research on public-private partnerships and cost overruns and how to deliver big things effectively. And then also at the projects themselves and what makes for good outcomes and how you integrate infrastructure itself into the fabric of cities. I'm really an urbanist. I love cities. And I find the infrastructure is that underlying architecture, that foundation upon which you build cities. And so you have to understand how the pieces fit together, how they're delivered, and also who wins and who loses when you're building these big projects. Yes.

And for those of you who were tuned in the last season, me and Maddy had a conversation and you remember we met during the public inquiry. You're a recurrent speaker in media. So if you are in Canada, in Toronto, I think you can't miss Maddy. It's incredible. color commentator, I guess, if you want to use a sports analogy, when it comes to infrastructure. But the reason I've asked Matti to join me again on the podcast is because in some of the encounters that we had over the last few months, I noticed that Matti is the director of the Infrastructure Institute. And I looked up what the Infrastructure Institute was, and I was very intrigued.

But beyond what I read on the website, I was really curious to learn more of what the Institute does, especially because when I started this podcast, I really wanted to have a better intersection between industry and academics and bring thinking from both sides of that same coin in order to have a different perspective about infrastructure, not just from the private sector or the delivery of infrastructure, but also from the policy and the research side.

So learning about the Infrastructure Institute was something that I was really interested in, and I think the listener might also be very interested in learning more about about the history, what you're trying to achieve, and what the future brings. Yeah, we really founded the Institute specifically to solve the issue that you raised, that we have academics who are doing a lot of work on infrastructure. There's full journals and conferences of academics who come together to talk about infrastructure. And then there's professional practice, which is happening in companies and in governments and in non-profits. And in many ways, those two worlds almost don't intersect.

They don't come together very often. They speak a different language. And because of that, it's kind of like two ships passing in the night. And I think we're missing that interplay where us as academics can learn a lot from practice. And at the same time, I think there's really a benefit to practice being able to engage in venues where there's space and independence to reflect on what's working and what's not. And that was really why we founded the Institute. So the Institute is now a number of years old. It's based at the School of Cities at the University of Toronto. And we really do three things. First, we do research on infrastructure.

And research I define fairly broadly because it's not only academic research that goes into journals. In many ways, it's very applied research where we work with stakeholders from government or from the private sector or nonprofits. to understand it's more solution oriented type of research. We have a big training and capacity arm, and we do a lot of work on social infrastructure and community infrastructure and trying to support organizations in developing their own projects. So we've worked a lot with nonprofits. We run what we call a social purpose real estate accelerator.

We see a community infrastructure as infrastructure, and we work with nonprofits in particular to help them design and develop their own projects. And we've also worked with other government agencies and departments to help them conceive of different ways of building things like schools, for example. or health-oriented types of communities. And so the infrastructure is part of the fabric of cities.

And then the third piece of what we do is we engage in the public debate, that we host events and I and others speak in the media and we write reports that are aimed at really sparking conversation and dialogue about how cities and infrastructure are growing and what could be done differently or better. So that's another piece of what we do. So it's really... We start with the fundamentals of what a university is, which is about training and research, but we have a really clear mandate to engage out into the world and have the world find its way back into the university as well. Fascinating.

And for people like me who are not in academia, can you, because I mean, you mentioned it, the Infrastructure Institute is part of the School of Cities. School of City. Okay. Can you maybe for the non-academic folks explain how those operate within a university? Why do universities set up those institutes? Why do you have these branches of universities? It might be very basic, but for the non-academic, it might be fascinating. not basic and very much a function of universities. And I'm probably the right person to talk to you about this because I was the first director of the School of Cities. So what happens at universities is universities are made up of departments and faculties.

And oftentimes, so you'll have people working in all sorts of different areas on similar topics, but because of where they sit or how their disciplines see the world, they often don't actually interact all that much. So what we were finding at the University of Toronto in about 2015, 16, was that we had... hundreds of people that were doing work on cities. And they were spread across dozens of departments and faculties and across our three campuses. So just to give the listeners a bit of a sense of the scale, the University of Toronto has about 100,000 students now. spread across three campuses, one in central Toronto and two in the east and western parts of the region.

And so we are just a big institution with thousands of faculty, and a lot of them are doing work in various dimensions on cities. So you'll have people who are doing Urban planning, engineering, architecture, business, those are some of the obvious ones, but you would also see people working in the humanities, for example, on the history of cities or the art that comes out of cities, or you'd have people who were doing work on music. And like the noise, like how much noise do cities make and what does that impact on quality of life, for example. Then you have the whole health sector. The University of Toronto, like many other universities, has a huge health faculty.

And there are folks looking at the intersection, the social determinants of health, for example, that in many cases are very urban. And urban features like air quality, for example, or food deserts or pollution can have a big impact on quality of life or how walkable a city is. So you were seeing that these folks were spread all across the campus. And there was a push in the mid-2010s to bring those together and create a venue where we could come together and do research, collaboration, and drive ideas that were much more interdisciplinary and, in fact, transdisciplinary than you would get if you just sat in your own department. Because universities, like many corporations, have their silos.

It's not always the easiest for us to talk across those. They're not very... visible boundaries, but they often function as boundaries, both disciplinarily, but also even just like physically, like we're in different buildings or different parts of the university. And so this was a venue to bring people together. And what's happened more recently, my colleague Karen Chappell has now taken over as the director. And the Institute has created, let's call them subsidiaries, if you want to think of it like a corporation. And so we have a number of subsidiaries of the School of Cities, of which the infrastructure is one. So there's one on housing justice.

There's one on our transportation institute for the university is based out of the School of Cities, the infrastructure institute. And there's another one on municipal finance and governance. So think of them as sort of like subsidiary divisions of the School of Cities, of which we're one of them. And what's really great about it is the school was formed with this mandate, again, to be action oriented and community engaged. You know, one of the criticisms of universities, again, is often that we're in an ivory tower, we're a bit disconnected, and we're hard to navigate. Like, people don't always know from the outside who to call or how to connect with us.

And the School of Cities has staff and has an infrastructure, if you will, to be able to make those connections. And the Infrastructure Institute itself has benefited from being in that type of venue. Okay, so a venue for collaboration and interactions amongst academics in order to accelerate and advance the research in these areas that sometimes are multidisciplinary, and you're basically trying to bring those multidisciplinary skills to the same place without the silos. And the other piece is being able to facilitate connections with stakeholders in the community. I think that was really the key.

Like when our past president at the university was inaugurated, Merrick Gertler, he's an urbanist, and his vision was really that the university at its core sat in a community. And as part of that, It's not just that we train people. We train tens of thousands of students every year who go on and graduate and become members of our city and our broader country and even out into the wider world. But the university can play so much more than just a training ground. It's our research, if it connects, can be the place where solutions are found for the next generation.

It's also a venue where we can host events and discussions that are sometimes hard to have in a corporate office or in a government building. They sometimes need an outside venue and I don't want to say a referee, but a host who can host that conversation, who has a sense of who's seen as neutral by the various parties so that they can have discussions that are hard to have. If they're done on someone's home turf. And so, you know, that again, the school of cities serves that role.

And I think the infrastructure Institute has played that role too, as contributing to those broader discussions in venues that are sometimes hard for stakeholders in the game, so to speak, whether you're a consultant or you work for a construction contractor or an engineering multinational or whatever. or a government office. People are quick to argue their side when they're in those venues, but it's sometimes easier when you come to a university that the university can host and do applied research and engage in those discussions that are sometimes a little harder to have elsewhere. So you're Switzerland? On our good days. Yeah, on our good days. Well, it's fascinating. Thank you for that.

I mean, as I said, for me, not being in academia, it's interesting to find out because there's a lot of ideas, a lot of things that discuss and move forward, and they happen over there in the academia world. But this demystifies a little bit of the work that you guys do, which is essential for the advancement of industry and society. Yeah. Okay, so I think before coming on, we spoke a little bit about the work that you do with the Institute. And you said you're focusing mostly on social infrastructure, but not exclusively, but mostly. Any reason why that path was taken? Was it just policy-driven? Was it just what the needs were?

It happened a little bit by chance, actually, that I had been studying what I had called creative mixed use buildings where you'd have, and it was, it was very much like a Canadian innovation that has gone almost completely unspoken about where you would see these buildings popping up with Let's call it social infrastructure or community spaces on the ground floors and then housing and other uses up above. So we have some great examples here in Toronto and in Canada more broadly. We have examples like North Toronto Collegiate Institute, which is a four-story school with two very tall condos surrounding it and a new playing field for the school.

Or we'll have something like The Tiff Bell Lightbox, which is a major arts theater for one of the biggest film festivals in the world for the Toronto International Film Festival. And then up above it is a 50-story condominium tower. And I was increasingly seeing that it wasn't just arts and education. You were also seeing even some some community infrastructure like homeless shelters, we're starting to get mixed with upscale and luxury condos. And we have some examples of that type of development here in Toronto too.

And so as someone who teaches urban planning and comes at infrastructure from the city building side, I was so interested in like, what are the mechanics that get these projects built? And then how do they actually work? Like, does it function? And again, coming back to the Infrastructure Institute's mandate and the I was encouraged to think not only of this as a research project, like that was fun and I did that for a while, but also could we take some of these learnings and turn them into better practice? So we started an accelerator. We call it the Social Purpose Real Estate Accelerator, where we work with nonprofits who have their own sites or are looking to acquire sites.

And we give them training and capacity. We pair them with a mentor. And we've even brought on our own staff who have architecture, engineering, and design skills who can help them with some of the preliminary work, the very early stage work that would be needed to do a social purpose real estate project. And we also work with a firm that does pro formas who are giving them some of the economic viability of their projects. And so again, it's kind of using the university as a platform to turn ideas into action. Like we have this thesis that we need more affordable housing. We need more community-based infrastructure, like community centers, schools, parks, daycares.

And then we use the tools and techniques of real estate and the university's capacity and training function in order to help extend that out to groups that might otherwise either not be able to do it or would really stumble and face hurdles or have to pay huge amounts of money to consultants early on before they really know that they have a viable project. I mean, you mentioned some interesting concept. I mean, the Tiff Bell lightbox that, yeah, I remember when that opened. I remember, I mean, I've been in it. I actually had a friend who stayed in the condo above it because I think it was temporary, it was rental units.

Yeah, I think that's, It's what we call the intersection between commercial and social, right? It's where you're actually trying to support the social activities through some commercial activity within other parts of the development, right? And that's probably like the true public-private partnership. Not the one that we normally talk about, but the other public-private partnership. Maybe for some of the listeners in Toronto, is Regent Park something also that associates with the School of City? Was that prior to School of City, I mentioned Regent Park, maybe for the listener, it's a development in the center east of Toronto.

Regent Park was a low-income housing project developed in the 60s or 70s, if I'm not mistaken. And obviously following certain urban planning characteristic that through the decades proved not to be the right system for urban planning. And so that whole neighborhood has been redeveloped with a new way of thinking how you do low-income housing and how you mix. And so is that the type of things that the Institute will look at? Is that something the Institute looked at in the first place? So we haven't been directly involved at the Institute with Regent Park, but certainly going back in time, folks from the university have been involved.

In the School of Cities, there was actually some of the faculty had been involved in a report, sort of like a milestones report on looking at Regent Park. So there has been some work there. Our engagement is... It's similar. That would be a great example at scale of what we call creative mixed use. I mean, you have, for those who know that area, you have this building called the Daniels Spectrum, which is a community center that has a number of different arts organizations in it and then housing up above. So again, this mixed use, you have a wonderful swimming pool, like top-notch, beautiful Pam McConnell swimming pool.

And then you have this really mixed-use type of community that's taken shape as you try to rebuild and try to retrofit from some of that earlier wave of city building that really separated uses, that made it hard for people to access their homes, and created all sorts of knock-on effects. It didn't have a bank, for example. It didn't have many retail services that you would need to create a really vibrant community.

And the developer of that daniels as well as the city and toronto community housing have done a lot of work both to bring in the social and and retail commercial infrastructure and then also affordable housing and weave that in it obviously hasn't been perfect there's been critiques over the years but i think when you go through there now you just see you see a vibrant neighborhood you see a beautiful park that's very well used you see a school a community center So you're really starting to see what can happen when you think about city building in three dimensions and you think about it as a long-term collaboration between different sectors and different actors.

Yeah, and I think, I mean, I pretty much live in Regent Park. And I think right now it's actually quite interesting if you're in Toronto and you haven't been to visit it because part of the old neighborhood is still in place and part of the new neighborhood has been developed. And you can see the stark contrast between what it was and what it is now. And because it's still one or two phases, so you can still see the old fabric. And the contrast between the new and the old is astonishing. And as you said, you have retails now, and the neighborhood feels so much more, well, almost safe as well. I mean, Region Spire for people in Toronto, no, it never had a great reputation.

But now you can walk around, and it's vibrant, and it feels safe. The swimming pool, it was my swimming pool for many years. It's a great venue. Yeah. You know, Ricardo, it's really remarkable that part. And I was just through there the other day. That's sort of through my main transportation route into the downtown and into work. And I was struck actually by how much retail there was on the ground floors on the side streets. That what's occurred and the fine-grained nature of the planning and the density has enabled retail to thrive, not just on the main street, but on some of the side streets. And again, that just creates this vibrancy, the traffic, and also people.

who are around at various times of day, which is good for safety and good for community. And then you have the school there, which is very active, and the park. I mean, the park is being used. The park, just again for folks who aren't from Toronto, has a playing field and has a track and has a skating rink. Toronto's obsession is hockey, and so it has a skating rink. And it is used regularly. all the time and by people, by just people doing all sorts of different things. And it's, that part has come together, I think, in a really, in quite a remarkable way. And I would say it was intentional. Like none of this happened by accident.

I think that's when you listen to the people who were involved from the beginning. What you learn is that the social and community infrastructure and even the retail landscape that you now see that you might look at and say, oh, like, you know, that just happened by good fortune. It wasn't just good fortune. It was really intentional planning and some pretty strong debates about what good city building is and city building for whom. I mean, I think that's the other piece of talking about Regent Park is that Regent Park historically was a low-income community and was also very much a community with a high proportion of racialized people.

And so there's been debates over the years about, is this gentrification in action? Are people being displaced and pushed elsewhere? And I think there have been efforts over the decades that Regent Park has been redeveloped to make sure that people are able to continue to live in the neighborhood, that the Toronto Community Housing, that's our public housing provider, that those units remain there and that people still have a place. It hasn't always been perfect and it hasn't always been without tension. But what you're seeing is the product of this change. 20 years on or even longer.

And it is this story of how you build social and community infrastructure into neighborhoods and how you build connections. And I think that's been a really fascinating outcome of this process. Okay, so we took a bit of a tangent onto Regent's Park, but I think it's good because it kind of grounded practical terms, some of the work that, you know, you were not directly involved with that particular project, but that's the type of work at scale that the Institute is trying to do. You mentioned social infrastructure. I think we will have to talk about housing given the housing crisis. But I'd actually like to talk about, you mentioned schools. Have you been involved in projects around schools?

Schools doesn't strike me as an element of infrastructure to get overly talked about, but schools are very, very important. I have a passion for this topic in part because the school that I went to was an aging hundred year old building that was becoming decrepit. And, you know, you'd sit in the classrooms and the windows panes were so thin that the wind would blow through it in the winter and the radiators would be just making all sorts of a racket because they were old. and not in a state of good repair anymore.

And the school board actually was at the point where they were going to take down the building and sell the whole site to a private developer just to be rebuilt and get it off of their books. And through a long process, what ended up happening is the school board and a developer and the city came together and came up with a resolution, this idea of having the school on the main floor, on the main few floors, and then two condos up above. So I actually went to North Toronto Collegiate, which was This first mixed use school in the city. I went there before it got redeveloped, but it really just highlights what's possible.

And I've become really engaged on this idea that we can build schools differently and that you can have a stacked school. And so on the schools, we have actually worked with the Toronto District School Board's land agency. on re-imagining and helping them re-imagine what a mixed use school might look like. Now there's all sorts of dynamics that are at play. I mean, you have to make sure that the building is safe and that there's not like unsupervised access between the different uses. There's always questions about where's the school yard gonna go because a lot of the communities we're building now are very dense.

And so there's questions about like, can you have some part of the school yard on the roof of the building, for example? Can you have some part of the school yard in a park that's adjacent? So it's a shared use. How does the housing actually fit up above and how do they access it? You know, so there's all these questions and we've been involved over the years with, they're called the Toronto Lands Corporation, to think about these ideas. And I'm really rewarded. I was just hearing the other day that they're now with the city thinking about implementing some of these initiatives. So again, we get involved with projects at the very conceptual stage.

We're never going to be your architect of record or your engineer. That's not the role of a university. But we can help with concepts to help you know, and concepts and principles of how you would go about it to achieve the best results. You know, Ricardo, the other one where we've had a lot of interest and it's kind of pushed the envelope is fire stations. So again, fire stations are a piece of civic infrastructure that you know, no one wants to live beside the fire station because it's noisy until they have a fire. And then you want the fire service to show up as fast as humanly possible.

And what we've actually learned through our research is that there are a growing number of stacked fire stations where you have the fire station on the first floor, you have the dorm on the second floor and the living quarters on the second floor or the second and third floor, and then you have housing up above. And it's turned out to be a model. Vancouver has done this St. Thomas, Ontario, actually a smaller community within Ontario has done it. Victoria just opened their central fire station with this model.

And so you're seeing that like, it's the mixing of infrastructure and housing and how you leverage every square inch of public real estate and try to deliver some public good and also create places for people to live. And so these are models, these are real. This isn't just like, you know, something that's theoretical on the desk of some academic. This is, people have built these We have ideas for where they could go in Toronto and would love to see that happen further across the country. So I have to ask, because I mean, as you explain it, it makes complete sense. And the first question that comes to my mind is, why wasn't it done before? So a few reasons.

One, with all of these mixed use ideas of infrastructure and housing or infrastructure and commercial, the short answer is like, if someone could do it alone, they would have done it already. It's complicated. Working with other people is hard. You lose control. Things take longer. if they could muscle the project through on their own and they had the resources or the approvals, they would have done it. So part of it is, is just like, there's been a status quo momentum that we always just envisioned. You know, we had the money, we were just going to rebuild the facilities. The push for this now is that we just, we have all this aging infrastructure.

I mean, Just in this region alone, the school board has like a multi-billion dollar budget backlog. The fire station has stations that are really in a bad shape. Like the people who are providing life-saving services should not then spend the rest of their day and nights sleeping in some of these conditions. So part of it is a push. And then there's the pull that it's actually like, it's hard. It's hard. Like there are questions that you have to resolve. Like for example, the fire station. One of the questions I always get asked is, isn't it going to be noisy? Like I hear the fire. If you're on the street, I hear the fire truck. It's loud. It has a siren on.

Isn't it going to be noisy if I'm living above a fire station? Turns out you can make protocols. Turn the siren on when you get down the street so you're not blasting it right in front of the building. There's all sorts of ways. Build the building with better noise insulation. There's different ways that this can be handled. And in fact, in a new building, you're probably going to be better off than some of the buildings down the street that are 100 years old and have that reed-thin window. So, you know, it's really a mind shift as much as it is the technical. The technical we can actually figure out. And in places where there's a necessity, they're doing this. And we're doing it, actually.

When we come up against the necessity, we stack things in all sorts of ways. We bring infrastructure into housing or into offices. And what we're learning is that it's better than the necessity. It actually builds better cities. And I think the key is to go from this being like an afterthought or like your last option to your first choice because it benefits everyone and it's good planning. But it doesn't mean it's easy. It's hard work. So it's basically necessity is the matter of innovation. There was a necessity, scarcity of financial resources, maybe scarcity of land. And so then innovation came in and pushed the envelope. Interesting. Again, very curious.

I'm assuming you're working with this municipalities, with these agencies, how do you get clients? I mean, do you even call them clients? What's the relation between you and somebody that comes for a consultation at the Institute? We tend to call them partners. And because of our different role than a private company, so to give you a sense of how this has worked, we received a philanthropic donation at the beginning of launching the institute that gave us a lot more breathing room and a lot more space to innovate around a mandate of doing social purpose real estate.

So really, we were funded to have the accelerator program to do work with community-based organizations or municipalities who are pushing the envelope on social purpose real estate. and then to engage in broader public dialogue and discussion. So that gives you a bit more latitude than a company that on day one has to get paying clients to do their work. And then we get people who contact us because they've heard about or seen our work who say, hey, can you help us out? And we've been able to work and engage on some of those projects. Some of them are paid.

We often do things, we call it not pro bono, but low bono, where we'll charge You know, not what a full fledged consulting firm would charge, but not nothing to cover our costs. And in some instances, if we're working with a community based organization, we'll do the work pro bono because it's really important. So like we've been involved, for example, we engaged with the Somali Center for Culture and Recreation who's been one of the leading organizations in the city at trying to push for a culturally specific community center and community space for the Somali community and the black community more broadly and around recreation in particular.

There are some other ones around arts and culture, but this is specifically around recreation. So we were able, because we had this base of funding, we were able to say, you know, this is a great project. This is super timely. There's many other cultural communities have recreation centers. There isn't one for this community we would love to support. And so in those instances, you know, we were able to provide some early work that helped lay the foundation. They then took that work. They went out and engaged with other stakeholders and got other engagements with other consulting and advisory firms.

And I'm really pleased to say they just A few months ago, we got an announcement of funding from the federal government, and they have support from the city and province, and there's much more support and momentum to get their project through. So that's how we see our role. I think that's actually a good encapsulation of the type of work we can do as a university. We're never going to stand in front of you, and we're never going to be your lead consultant, but we can certainly be a supporter. that then helps different agencies and organizations achieve their goals. That's what's so important to me. It's that they're achieving their goals.

And I think a university is really good at that because we don't need to be out there driving our own mission and mandate. It's really to help support others and give them the tools to achieve what their dreams and ambitions are. Thank you for that explanation. I now feel I understand the environment a bit better. As I said, we can't talk about social accommodation without talking about housing. There's a housing crisis. It feels like it's a global housing crisis, but it's not just Canada. I'm here in the UK. Everywhere there seems to be this crunch for housing. Are you involved? Is that one of the areas that you're also focusing on with the Institute? Absolutely.

So we were fairly early in seeing in this idea of housing as infrastructure, that housing has its own rhythm and its own financial structures. But in many ways, you can still think of housing like an infrastructure project, that it has a design phase, a build phase. You have to finance it and you have to operate and maintain it. And so that's in many ways very similar. It can have a similar life cycle to an infrastructure project. And we became deeply involved in working with municipalities and other nonprofits in particular to think about how can they drive their own housing projects. So we've worked with the city of Toronto around housing.

We had some work thinking about what we were calling health-oriented communities. So that was a really interesting idea that, you know, in the same way people in the infrastructure space will be very aware of transit-oriented communities that, you know, you build a transit line or you have a transit line, the station areas have a higher value and then you try to build at greater density and there's like a mutual benefit. The same is actually true about a hospital or a healthcare facility, that you have this major generator of economic activity and of very specific types of services in that hospital, and that oftentimes they're surrounded by giant parking lots.

What if they weren't surrounded by parking lots? What if you co-located it with long-term care, for example? Or you co-located it with other types of seniors facilities. Or you co-located it with different types of day services or pharmaceutical or, you know, all these other types of research and development because it's now that you have hundreds of healthcare providers in that hospital. So you're trying to drive both financial and social and community value from how you build around the hospital and create these integrated, what we were calling health-oriented communities.

And so you start to think these are the types of ways that we've thought about housing very literally, but also in this broader, more sort of expansive view. Again, apology for the listener from Toronto, but I can't not think about, you mentioned, yeah, I think the downtown core, where the University of Toronto is with all the hospitals around and the research centers, but that wasn't done by design. I mean, you end up with just a conglomerate, a concentration of research hospitals, but probably because of the proximity to the university. But that's almost a natural development.

But I think what you're talking about is actually trying to force that type of development so that if it doesn't happen organically, like it happened in downtown Toronto, it happens by plan. You're exactly right. And again, the parallel to transit-oriented communities is so direct in that if you think of the history of public transit and whether you're in Toronto or London or Vancouver or Chicago, you can see on the map where the old rail lines in particular were. Because there were these communities. You can see the scale of them that were around the stations. And they're called streetcar suburbs. And you can see them.

And then when the bigger subway systems came in, you can often see from if you were to fly over one of these cities, you can see where the transit line is because there's big clusters of dense development. And sometimes that happened by design. And the history of this is it happened quite organically. And you're absolutely right about the downtown hospitals that You would end up with these agglomerations or these clusters happening. And as we've moved away from that type of clustering, we have to move away from it being organic to it being much more planned and intentional.

And that's why like in the more suburban hospitals, both here in Toronto and elsewhere, you'll often see like a hospital building. It might be a tall building, might not be, but it'll be surrounded by acres of parking. Like just a sea of parking. And, you know, in the same way that we're now looking at transit stations across the world and thinking like, how can we intensify around them? Because there's value. It's not just like a goodwill gesture. It's because there's value. There's the same value sitting on the land beside the hospitals. It's just a matter of how you go about activating it. And in fact, there's many cases in the United States where the hospitals are private.

that actually the private owners are activating that space because they realize there's more value to them in having a pharmaceutical lab and long-term care than there is having a parking garage. Or it's not even a garage, it's surface parking. There's more value to them in having that. But you have to get the incentives right, and you have to make sure that it's the right type of development that's happening. Because it might happen organically, but it's going to take a long time. And I think what you're seeing from policymakers in the midst of a housing crisis in particular is they're trying to push the envelope and see if they can hit the gas pedal on this stuff a little quicker.

Well, again, thank you for that. I think you've enlightened me on something that I was not aware of. It makes so much sense. I mean, it really does. I was actually in Montreal two weeks ago visiting the McGill Hospital, right? And my company is maintaining it. Yeah, I mean, it's in the middle of nowhere. I mean, surrounded by parks. Fortunately, they built a children's hospital next to it. But, like, it is, you know, there's probably a lot of scope for adjacent development that could unlock a lot of value. And, yeah, I mean, I almost want to scream. Does anybody else know about this? Is Maddy the only one that knows about this? Because I never even thought of it. I never even thought of it.

You know, what's dangerous Ricardo is once you start seeing cities this way, you see it everywhere. So the other, like once you start seeing cities in three dimensions and you see how you can drive value by co-location, you start to see it in all sorts of different infrastructures. So the one that for me is the most telling is transit stations. I mean, we've built transit lines here in Toronto, but there's examples across the country where we'll spend billions of dollars on these transit lines. We'll build these brand new stations that will be relatively attractive glass boxes, but it's a two-story glass box.

And right around the station, you'll often see these high-rise buildings pop up around them to take advantage of the added value of being near a station. And you just start to think to yourself, why are we not co-locating the station in a building as well so that the public can generate some of the value back from the value of what they've invested in? And we have a few lines here where you just look and they're Some by policy, some by history, just have very little development that's happened adjacent to the stations. And it's just such a wasted, missed opportunity. And I think once you see it with transit, you'll start seeing it with all sorts of other types of infrastructure.

And I think we're seeing we have to start thinking about these infrastructures in three dimensions and in much more detail. integrated and co-located forms than we've ever done before. And I think, I mean, it'd be interesting to hear your views. I mean, it pushes the envelope from a corporate and from a business structure perspective. There's no doubt that like when you're building a billion dollar or multi-billion dollar subway line, like you don't want to start mixing risks. I understand that. Like there are these question marks that, And it's different players.

I also understand that, that the developers are not necessarily, you know, the people who develop housing are not necessarily the same companies as do civil infrastructure. Like the civil and the housing builders are not necessarily the same, but people can figure this out. And the missed opportunity is just too expensive for us not to be looking at anymore. We're leaving too much value on the table. And the flip side is we're not generating the revenue and the social benefit that we could from these pieces of infrastructure. Yeah, I don't think that would be an issue from a private sector standpoint.

Like from a constructability, I mean, once you're out of the ground, once you build the underground station, you're out of the ground, you're building the roof of the station. Instead of building the roof of the station, you just keep going, right? And then all the activities underneath can continue. And I think we have the modern construction techniques. That's not an issue. I do remember talking... to some professionals about this particular topic. Why? Because when you, I think the rumor goes that when you look at the REM in Montreal, one of the reasons CDPQ funded the REM is because they also own Ivanhoe Cambridge, which is a real estate developer, and they have a lot of land.

And, you know, I think by building the REM, CDPQ was going to increase the value of those lands, which are going to benefit one of the subsidiary. And so one would think, why can't we do that in Toronto? So I was talking to people in the public sector. And I mean, one of the challenges is that... Because you could say, okay, I'm going to develop this new transit and I'm going to buy... Not only am I going to expropriate the land for the station, but I'm also going to expropriate a bit more so that I'm going to capture the value development around. And unfortunately, I think that the practical challenge I was told is...

The law around expropriation doesn't really allow you to speculate on that, so you wouldn't be able to expropriate that land. You could buy it on a willing seller, willing buyer mode, but you can't really expropriate it, so there are legal challenges, but... I have to say, like building on top of the station, the air rights are already there. So that should be a no-brainer. That should be a no-brainer. Like if you can't really expand around the station, but you could definitely, from a constructability standpoint, exploit those air rights above the station. I feel the exact same way. And it's interesting.

We did a study for the Canada Infrastructure Bank on land value capture and on this exact question of how much... So let's take it as a given that there's social value. How much money could you actually generate? Could you generate enough money to pay for major infrastructure investments from real estate? And at least from our calculations, the answer in Canada was... It's good money, but it's, it's sort of like 10 cents on the dollar of what you would need to build giant stations. So you're talking about, you know, you're in the tens of millions, maybe pushing into the hundreds of millions and the lines we're building now are tens of billions.

So it's the money is okay, but it's, it's what you said. It's really the, the social value and the community spaces that you're building that are as important as the money. And I think like, just as a matter of good planning. and good use of our resources, we should be doing this. And it's been unduly difficult in Canada and other places are finding it, are finding ways to achieve this in a more straightforward way than we have. Yeah, I'm thinking, I'm thinking like, I don't only know the anecdotes, but in London, London, England, I think there was a new development around Battersea Power Station. It was a very old power station that was used and they redeveloped the whole thing.

And I believe, that the developer actually paid for this for the subway extension it was an extension of the northern line two stops into the development but it was a very large complex development massive right a massive power station but yeah i mean that you know again it's about scale right i think that's the holy grail if you can actually have but then then it's economy of scale like you can't if you have a small development it's never going to justify the cost of a subway but if you have a very large development i think an mtr in the in hong kong is another example but the the london one was interesting because It really gave a lot of clout to that development once you could actually have a subway getting to it.

I mean, it's very close to the river. It's very close to the center of London. But having the subway actually into the neighborhood made a big change. And the developer knew that. And that's why they paid, if not all of it, most of it. The transit is so important for many of these developments. And I think these are the examples that motivate people to look at these projects in North America and elsewhere. And the numbers come close. There are some good examples. I mean, in North America, there's also Hudson Yards. where they were able to finance the cost of the deck to build over a rail yard with the development.

And if you listen to what we're talking about, and we're talking about some of the most expensive real estate markets in the world, you know, and the most valuable cities in the world, we're talking about London, Hong Kong, New York. Did the economics work elsewhere? You have to see. But the point is, I think building, co-locating and building on top of infrastructure is just good planning. It actually, it drives ridership online. the system as well, which is what you want to. I mean, there's a whole body of research that often we build these new transit lines and then they're underused relative to their projections.

I mean, these are the ways that you try to avoid that is by not just building the transit, but also making sure people live near them and that they have incentive and encouragement to use those systems. And what you're talking about, I think, is it makes for good planning. And the key is then how you actually unlock it and make it real. Well, I think we're almost at time. Again, the time just went by. This was a great conversation. I want to thank you for coming on the podcast. I believe we have another podcast already scheduled to be recorded soon, so I'm looking forward to that conversation. But in the meantime, Maddy, thank again for coming on.

And I'll leave you the last word if you want to point the listener maybe to the Institute website or how the listener can learn more. I'll leave you the final words. Yeah, Ricardo, thanks so much for having me. People who are interested can find us at theinfrastructureinstitute.ca. And it's been a pleasure speaking with you and sharing thoughts about infrastructure and how we do it better. And thank you again. Bye now. Thanks. That's it for this episode of Navigating Major Programs. If you enjoyed this episode, please consider following and leaving a review. Up next, I invite you to continue elevating the conversation on my personal LinkedIn at Riccardo Cosentino.