Addressing Arizona’s Water Crisis: A Call for Common Sense and Fairness

In the face of an ongoing housing crisis, Governor Katie Hobbs has halted home construction across significant portions of Arizona. This decision, undertaken without legal authority, stems from claims that the state is experiencing a groundwater shortage, a narrative that many experts contest. The implications of her actions are profound, as Arizona’s home affordability ranks among the worst in the nation.

Traditionally, for any new subdivision to gain approval, builders must provide a certificate demonstrating a sustainable 100-year water supply. This process has allowed Arizona to manage its water resources effectively while accommodating a growing population. Remarkably, the state has managed to maintain consistent water usage for over seven decades, despite a population surge from 1.5 million to 7.5 million residents.

Now, in an effort to address what it labels an “unmet demand,” the Hobbs administration has ceased issuing construction permits in areas dependent on groundwater. This move, criticized as a significant bureaucratic overreach, undermines both the housing market and the livelihoods of Arizona families seeking affordable living options. The Goldwater Institute has responded by filing a lawsuit against this directive on behalf of the Home Builders Association of Central Arizona.

Central to the lawsuit is the Hobbs administration’s new groundwater model for the Phoenix Active Management Area (AMA). Critics argue that the model disproportionately impacts some of the fastest-growing and most affordable areas of Phoenix. Furthermore, the process by which the model was developed lacked the necessary public engagement, failing to adhere to established rulemaking protocols.

Additionally, the term “unmet demand,” introduced by the Arizona Department of Water Resources, lacks formal recognition in state law. This shift in policy alters the requirements for developers who previously had to prove sufficient groundwater availability for their projects. As a result, the Hobbs administration’s actions have led to stalled projects and unwarranted hardships for aspiring homeowners, all while leaving substantial investments stranded.

Arizona law stipulates that such crucial decisions regarding water policy should be made by elected lawmakers, not bureaucrats. The inconsistency in water use regulations has raised concerns, particularly about how they differ between residential and commercial developments. These decisions have significant long-term implications for the state’s growth and sustainability.

For decades, homebuilders have actively engaged in practices that replenish groundwater resources. This dedication contrasts sharply with other industries that extract water without similar environmental responsibilities. The implementation of the “unmet demand” rule appears to single out homebuilders, while allowing unregulated groundwater use in other sectors.

The cessation of residential construction is not a viable solution. Arizona was recently identified as the ninth-least-affordable state for homebuyers, with communities such as Buckeye and Queen Creek being among the few affordable options available. As median prices in these areas surge at alarming rates, time is running out for working families to realize their dreams of homeownership.

The actions taken by the governor and her agency must be re-evaluated; they have hindered the development of affordable housing in Arizona. While protecting the state’s water supply is imperative, it is equally important to maintain Arizona as a desirable place to live and work. Governor Hobbs is urged to reverse the unwarranted regulations that have exacerbated this critical housing issue.

Jon Riches serves as vice president for litigation at the Goldwater Institute, and Jackson Moll is the CEO of the Home Builders Association of Central Arizona.