Arizona is one of the fastest-growing states in the country.  Phoenix, located in Maricopa County, was the fastest-growing city in the state from 2010 – 2020, and the county led U.S. population growth last year.[1]  That growth exacerbates the challenges of ongoing drought and shrinking water availability.  At the beginning of June, the Arizona Department of Water Resources (ADWR) released a report showing that the metro Phoenix area faces an unmet groundwater demand of four percent over the next 100 years.  In response to the finding, Arizona Gov. Katie Hobbs announced that the state will not approve new development in and around Phoenix that depends solely on groundwater.

Development through much of the state must meet the requirements of the Assured Water Supply program, proving the physical availability of groundwater for 100 years.  For areas that have previously demonstrated assured 100-year water supplies, development can continue; there are currently 80,000 unbuilt homes in the pipeline that have shown an assured water supply that can, subsequently, be built.[2]  Areas without long-term supply can continue development only with alternative water sources, such as local rivers or the Colorado River, reclaimed water, or transporting water in from other sources in the state.  Facing decreased river flows, the state has already incurred cuts in its Colorado River allocation for the past two years and just agreed to another reduction which will make it more difficult to secure alternative water sources.

In January, a deficit over 100 years was determined for the Hassayampa sub-basin, west of Phoenix, and restrictions were imposed; in 2021, the same determination was made for Pinal County.  With current population growth and housing shortages, housing costs are already rising, and the latest groundwater ruling will further impact costs.  Developers will have to choose between building on land that has an assured water supply at a higher cost or finding water sources other than groundwater that will enable building on land at a lower cost.  Ultimately, the homebuyer will carry the burden of the cost of securing water sources, and while these decisions won’t stop growth in the region, the shortages highlight the need for sustainable growth. 

[1] Pequeño IV, Antonio. “Arizona Restricting Phoenix Construction as Groundwater Dries Up-Gov. Assures ‘Water Future Is Secure.’” Forbes, 7 June 2023, www.forbes.com/sites/antoniopequenoiv/2023/06/01/arizona-restricting-phoenix-construction-as-groundwater-dries-up-gov-assures-water-future-is-secure/?sh=494d0b595529.

[2] Associated Press. “Arizona Limits New Housing around Phoenix Because of Dwindling Water Supply.” NBCNews.Com, 2 June 2023, www.nbcnews.com/news/us-news/arizona-limits-new-housing-phoenix-dwindling-water-supply-rcna87390.