Innovative Culdesac Approach Became Viable in Tempe
- Ryan Johnson, who was on the founding team of Opendoor, has moved on to his next project: Culdesac Tempe, the first walkable, car-free neighborhood built from scratch in the United States, based in Tempe, Ariz.
- Initially headquartered in San Francisco, Culdesac opened an office in Tempe for the talent being produced at local universities, quality of life for employees, proximity to California and other companies’ proven ability to scale in Greater Phoenix.
- The $170 million, 17-acre site will have 761 residential units, more than 16,000 square-feet of retail space and 35,000-square feet of amenities. There are currently more than 250 people on the wait list for the scheduled 2022 opening.
- The Tempe City Council passed legislation specifically to support the housing complex and allow it to exist without residential parking.
The novel idea
Ryan Johnson, Culdesac co-founder and CEO, noticed a trend through his work on the founding team of Opendoor: People want to live in a place where they don’t need to drive everywhere.
“The majority of the U.S. wants to live in walkable neighborhoods, which is something we saw at Opendoor, but currently only 8% of people do,” Johnson said. “By building this new car-free community, it would make Tempe a better place.”
Johnson has seen the success of walkable communities while living in San Francisco. The city’s infrastructure is such that most people don’t need to own a car, but housing prices in the Bay Area are unaffordable for most, making it hard for those who want to live a walkable distance from work and other activities in the city.
“San Francisco has not been building enough housing, which has caused housing prices to (rise) and has made those walkable areas far too expensive,” he said. “It’s possible to build low-cost, walkable neighborhoods … but building a new walkable neighborhood in San Francisco would’ve been a much harder and a longer process.”
“We’ve been impressed with all the great things going on in Tempe, and the job growth of the great companies coming out of there. We saw that Opendoor going there, obviously, also shows some confidence in Tempe.”
Johnson approached the City of Tempe with the idea that Culdesac would have the amenities and lifestyle suited for a working community.
His idea was met with enthusiasm and a local partner willing to help bring his innovative idea to fruition.
“The City Council of Tempe had to pass new legislation that let Culdesac build the first car-free neighborhood built from scratch in the US — it’s the first of its kind and it shows their vision,” Johnson said.
$170M
Development of the car-free housing complex cost $170 million
60%
More than 60% of millennials want to live in a walkable neighborhood but only 8% do
10
It is a 10-minute drive from Culdesac to Phoenix Sky Harbor Airport
Settling in Tempe
As the workforce went remote in May 2020 as a result of the COVID-19 pandemic, Culdesac canceled its San Francisco office lease. Johnson and the staff have traveled between the Bay Area and Tempe when needed, which is convenient given the proximity to Sky Harbor International Airport, which offers 105 direct flights from Phoenix to San Francisco and 117 to San Jose each week.
“Staying connected to San Francisco was important. It is a very short flight, it’s like two hours door-to-door, and if you’re in Tempe, you can be from the airport to your office in 10 minutes,” he said.
The employees that moved to Greater Phoenix also found a more enjoyable work-life balance.
The daily commute for some in San Francisco was as long as two hours. In Greater Phoenix, the average commute is 26.7 minutes. Johnson also cited employees’ housing costs as a challenge of living in San Francisco.
“Being in Arizona has been a big advantage because our employees are happy,” Johnson said.
“The City Council of Tempe had to pass new legislation that let Culdesac build the first car-free neighborhood built from scratch in the US — it’s the first of its kind and it shows their vision.”
Culdesac’s relocation has also given the company access to a robust talent pool. Arizona State University, with more than 100,000 undergraduate and graduate students, has its largest campus in Tempe – less than two miles from Culdesac’s future location. Less than two hours south is the University of Arizona, where Johnson graduated from, and to the north is Northern Arizona University.
“The things that make the area so exciting are the job growth and the talent base,” he said. “We’ve been impressed with all the great things going on in Tempe, and the job growth of the great companies coming out of there. We saw that Opendoor going there, obviously, also shows some confidence in Tempe.”
“Arizona is the petri dish of proptech. So many amazing companies have started here — Opendoor launched here, Invitation Homes launched here, a number of other players,” he said.
Opendoor, which operated in Scottsdale before moving to Tempe in 2019, launched its IPO in 2020 and now has a multi-billion dollar valuation.
“I would definitely consider Arizona, especially if you’re a proptech company,” Johnson said. “If you come out and do a visit, you’ll see the potential here.”