Daily insights for city builders, delivered every morning at 6 AM ET. I’m Brandon Donnelly — a Toronto-based real estate developer and founder of Globizen. I’ve been writing here since 2013.

Tag: arizona

  • Walkable archipelagos are emerging across the US

    We have spoken before about how walkable urban communities punch above their weight. In the US, only about 1.2% of land is, on average, designed and built for walkability. And yet, walkable neighborhoods in the top 35 metro areas account for about 19.1% of total US real GDP.

    At the same time, because walkable communities are a rarified commodity, they usually come at a premium. According to some sources, it’s to the tune of 30-40% when you look at home prices and rental rates. This again suggests that humans actually like and want this type of urbanism.

    Which is probably why there’s a growing interest in building more of it. Here’s a recent article from Bloomberg CityLab and here’s a photo of Culdesac’s new completely car-free community under construction in Tempe, Arizona (this doesn’t look like the Arizona I know):

    But in addition to just giving people more of what they want, there are also real economic benefits to stripping out parking and to overall more compact development. Charlotte-based Space Craft is another developer focused on car-light and transit-oriented apartments, and they have seemingly managed to make their projects more affordable as a result:

    “Our product offered lower rents to residents, $100 to $200 below our competitors, and was the best product in the market because we were able to reinvest some of the savings from parking,” said [Harrison] Tucker, who sees walkable urban neighborhoods becoming their own real estate investment class. “The economic case was just very strong.”

    This also flies in the face of the common argument that developers will always profit maximize and charge whatever the market will bear for their spaces. So why even bother trying to make it easier and cheaper to build? But this is not true! Lower development costs, as we see here, can and will translate into lower rents and higher quality buildings.

    I also agree with Tucker that we will see walkable urban neighborhoods, and their associated building typologies, become an important real estate asset class. For all of the reasons that we talk about on this blog, this is where our cities are headed.

    However, it’s going to take some time. I like the metaphor (mentioned in the above article) that, right now, we are creating “walkable archipelagos” or walkable islands in seas of cars. With the right connectivity (transit, micromobility, and so on), these islands can do just fine. But over time, I suspect we’ll see a lot more land reclamation. Good.

  • A cactus-inspired building in Arizona

    I was on a panel last month with Jamie Miller, director of biomimicry at B+H Architects, and he remined me just how much I am fascinated by the use of biomimicry in architecture and engineering. Nature is pretty impressive and I think there’s a lot that we can learn from her.

    Here is a recently completed example of what I’m talking about.

    The project is the new Pinal County Attorney’s Office in Florence, Arizona (designed by DLR Group). What the team did here was try and emulate the skin of the saguaro cactus. That ultimately translated into vertical self-shading fins on the envelope of the building.

    Here’s what that looks like (via DLR Group):

    Here is some evidence suggesting that the fins are truly helping performance (via Urbanland):

    And here is the explanation for why it works and why nature does this (also via Urbanland):

    Sit in front of a saguaro cactus for an hour and you will see the way it protects itself and thrives in the intense desert heat. Its vertical fins provide continuous self-shading and redistribution of heat. This ability to self-shade breaks sunlight up into smaller areas that shift continually, preventing any one area of the cactus skin from overheating. This adaptation not only makes the saguaro viable, but also gives it a beautiful and distinct character. Creating a 3-D computer-generated model of a saguaro cactus and using a daylighting simulation model confirmed that no part of the plant received more than 15 to 20 minutes of direct sun at any one time, avoiding the possibility of sunburn.

    How cool.

  • Phoenix’s cool pavement pilot program

    When I was in Phoenix this past spring I noticed a number of people carrying their big dogs around. At first I wasn’t sure what was going on. I thought maybe the dogs were injured and couldn’t walk. But then it dawned on me that maybe the ground was too hot for the dogs to walk on it. Phoenix is kind of hot sometimes and so this appears to be a thing.

    In response to this kind of hot problem, the city has a pilot program underway where they’re testing out something that they are calling “cool pavement”, which is essentially a highly reflective coating that gets layered on top of your traditional asphalt streets. Here’s a video showing some of it getting applied:

    The idea here is, of course, to lower the surface temperature during the day and also reduce the overall urban heat island. And after the first year of the pilot program, the results have been encouraging. Cool pavement had an average surface temperature that was 10.5 to 12 degrees Fahrenheit lower than traditional asphalt during the middle of the day.

    But there have been some tradeoffs. Because of its higher reflectivity, mean radiant temperatures increased by about 5.5 degrees Fahrenheit during the day, which means that these streets feel warmer to humans when they’re around them. That’s obviously not ideal, but it could be a necessary trade-off to reduce surface temperatures across the city.

    For more information on Phoenix’s cool pavement pilot program, click here.

  • Water supply and air conditioning

    This past weekend I was reminded that Phoenix is largely what it is today — the 5th biggest city in the US — because of two very important things.

    Firstly, the city had to figure out water supply.

    About 50% of the city’s water supply comes from surface and groundwater, specifically the Verde River and the Salt River watersheds that are to the north and east of the city. And about 40% comes from the Central Arizona Project, which is a 541 km diversion canal that pulls water from the Colorado River and brings it through the state (terminating in Tucson). From what I have read, the CAP canal serves about 80% of the state’s population.

    Secondly, Phoenix needed A/C.

    Air conditioning was first invented at the beginning of the 1900s, but it really didn’t become ubiquitous until the second half of the century. And not surprisingly, it made the southwest of the US far more appealing. In 1950, Phoenix had just over 100,000 people. By 1960, the city had grown by about 311% to reach nearly 440,000 people. Apparently there was more construction in 1959 alone than from 1914 to 1945 combined. Air conditioning made Phoenix’s summers bearable.

    Air conditioning is such an interesting topic because it’s one of those things that many of us take for granted. When you walk into a store or an office building in the summer, you expect it to be cool. But it hasn’t really been around all that long and its invention has, in many ways, been instrumental in defining the modern city. Even something as common and banal as a glass office tower with large floor plates would not be possible/practical without air conditioning.

    We can certainly debate how sustainable it is to urbanize and air condition desert climates like Phoenix, but there’s no denying that air conditioning has had a profound impact on our urban landscapes. Diversion canals are pretty important too.

  • Frank Lloyd Wright hated tall people

    I have been in a few of Frank Lloyd Wright’s houses and in every case it turned out like this:

    The Prairie School (of architecture), for which Wright was a pioneer, was all about horizontality. That typically meant flat roofs, deep overhangs and, in the case of Wright’s work, exceptionally low ceiling heights.

    I’m about 6’3”. Many of his clear heights were less than 7’ and I believe his doorways were often 6’2”. This clearly doesn’t work for me, but it mattered for what Wright was trying to do. And I don’t think he was the type to worry about small matters like the comfort of tall people.

    The above photos were taken at Taliesin West in Scottsdale, Arizona. Wright bought the land (495 acres) in 1937, and turned it into both his winter home and a teaching studio.

    Apparently Wright paid $3.50 per acre at the time, which feels like a pretty good deal to me. It shows you the power of just buying and holding things over long periods of time.

    Today, Taliesin West is the home base of Wright’s foundation and also a UNESCO World Heritage Site. I’m glad I was able to finally visit it after reading about it for so many years in architecture school.

  • A completely car-free neighborhood in Arizona

    The New York Times recently published this interesting piece about Culdesac and the completely car-free community that they are building just east of Phoenix in Tempe, Arizona (a place that is not generally known for its walkability). Culdesac calls itself the first “post-car real estate developer in the United States.” And so their Culdesac Tempe project has been designed to house 1,000 residents and exactly 0 cars.

    When the first phase is completed next year, residents will be restricted from having a car within the community and they’ll also be restricted from parking on any nearby streets. (This second stipulation was done to assuage concerns that a zero parking community would create a spillover effect in the surrounding area.) Instead, residents of Culdesac Tempe will rely on their local amenities, as well as on transit (it’s on a light rail line), biking, ride-sharing, and other forms of urban mobility.

    While this may seem kind of crazy for sprawling Arizona, the company’s thesis is both clear and clever. The future of American cities needs to be the kind of walkable urbanism that you find in places like the northeast. But at the same time, the fastest growing cities in the United States are generally in the Sun Belt. What they are doing is building walkable urbanism in the places where people clearly want to live.

  • The Central Arizona Project

    Phoenix is the 5th largest city in the United States. It has a city proper population of about 1.6 million people and a metro area population of close to 5 million. It is also one of the fastest growing cities in the US.

    But being the desert city that it is, its population consumes more water than its natural aquifers can support. Which is why there is something called the Central Arizona Project (CAP).

    Approved in 1968, the CAP diverts water from the Colorado River into the state of Arizona. The system is 336 miles (or 541 km) and it runs from Lake Havasu to Tucson, via Phoenix.

    Here is an aerial image of the canal from Wikipedia Commons:

    And here is a system map from CAP:

    Today, it is the single largest water source (and consumer of power) in Arizona, serving about 80% of the state’s population. This obviously makes it invaluable. It delivers on average about 1.5 million acre-feet of water per year. (Acre-foot = Acre of area x one foot in depth.)

    I was reading about this project today and I found it fascinating. Maybe some of you will too.

  • People are camping out in Opendoor’s homes

    Inc. Magazine just did a profile on Opendoor, which is a company that we have, of course, talked a lot about on this blog and that I continue to follow closely.

    It’s interesting to read about some of the challenges that they’ve been having as a result of their frictionless open houses. Since all you need is a smartphone, the company has been having the ongoing problem of people camping out in their listed homes. Sometimes for weeks. They’ve been working to address this by restricting the hours (6AM to 9PM) and by installing motion detectors. I am sure they will figure it out.

    The company is also having to be careful in terms of how it positions itself alongside realtors. There are many livelihoods at stake here. Here’s an excerpt from the article:

    During interviews, Wu has chosen his words carefully when discussing Opendoor’s potential to replace Realtors. “The reality with Realtors today,” he said on stage at the Startup Grind Global Conference in Silicon Valley in February, “is their role is shifting from project management–especially in our ecosystem, where we’re automating a lot of the processes–to advisement.”

    Fred Wilson (venture capitalist) has argued many times before on his blog that business model innovation is far more disruptive than technical innovation. I think it’s valuable to keep that in mind in the context of this discussion.

    Opendoor continues to charge a commission fee (sometimes a higher one than is typical), but it also makes money on the flipping of homes and it has plans to vertically integrate other aspects of the real estate business.

    Will that do it?

  • Why Phoenix is ground zero for algorithmic home buying

    I have been writing about algorithmic home buying on the blog since Opendoor launched back in 2014.

    I don’t have anything new to report on that today, but this recent article from the WSJ is interesting in that it talks about why Phoenix, in particular, has become ground zero for algorithmic home buying, as well as for institutional investors looking to buy cheap rentals.

    Across Opendoor, Offerpad, and Zillow, nearly 500 homes are now being purchased — largely by software — in Phoenix each month:

    One of the reasons why Phoenix is well suited to these platforms is that the housing stock is cheap and fairly homogenous. (The WSJ calls it “stucco sprawl.”) This makes it easier for the algorithms to put a value on the homes.

    A big chunk of the housing stock is also relatively new. Just over 36% of it was built in 2000 or later. And it tends to trade fairly often. Below is the percentage of homes in 2018 that were resold within a year of purchase.

    It’s also worth noting that Arizona is a non-recourse state, meaning you’re typically not personally liable if you default on your home mortgage. You simply hand back the keys. So it’s viewed as a fairly risk tolerant state, which may be one of the reasons why Phoenix’s median home price chart looks like this:

    I’ll end with this quote from the article: “It’s the dawn of e-commerce for real estate,” said Zillow Chief Executive Rich Barton. “Phoenix is ground zero.”

    Charts: WSJ