PHOENIX — Subdivisions on the outskirts of metro Phoenix that have had their planned builds paused may soon have a path to construction starting back up.
In order to build a subdivision in Arizona, you have to have an assured 100-year supply of water, at minimum, if your community relies solely on groundwater.
Last year, it was revealed that certain communities in Buckeye and Queen Creek, for example, may not meet that standard. Arizona Governor Katie Hobbs announced in June 2023 that she was placing a moratorium on building additional subdivisions in those communities because they relied solely on groundwater, saying they couldn't prove they had a 100-year water supply.
"The development on the outskirts of metro Phoenix is what I would call a historic development pattern that has been followed here for decades," said Mark Stapp, a Fred E. Taylor professor in real estate at Arizona State University's W.P. Carey School of Business. "That's how we grew."
Communities like Queen Creek and Buckeye are looking to build more housing to keep up with the amount of interest they've seen from potential homeowners, but both also rely heavily on groundwater to keep the water running in homes.
Stapp says water is clearly limiting where things can be built.
"Water is something that you have to plan for in advance, you don't just decide tomorrow, 'Oh, I'm going to make this investment,'" explained Kathleen Ferris, a senior research fellow at Arizona State University's Kyl Center for Water Policy.
Cities on Phoenix's outskirts have been most impacted by the housing moratorium, as housing continues to be built in more urban areas.
At last week's State of the State, Hobbs said she was continuing work on a program - the Alternative Designation of Assure Water Supply, or ADAWS - that would give those communities the ability to keep building by getting their water, at least partially, from other sources.
"I have directed the Arizona Department of Water Resources to finalize a new pathway for water providers and communities who have historically relied on groundwater resources," Hobbs said.
Water experts warn that the groundwater in these areas is finite.
"Once we pump those out, they're gone," Ferris said. "So, we have to figure out a way to stretch our surface water, reclaimed wastewater, all of those supplies."
Hobbs is working with the Arizona Department of Water Resources, or ADWR, to figure out how to rework the law to allow water from other non-groundwater sources.
"The question is going to be, 'What's the solution, and is that solution either going to change development patterns or is it going to increase the cost of housing?'" Stapp said.
