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Arizona limits new construction in Phoenix area, citing shrinking water supply

The decision marks the beginning of the end to the explosive development that’s made Phoenix the fastest growing in the country.

(Rebecca Noble | The New York Times) Stalled construction on a lot in Queen Creek, Ariz., a suburb of Phoenix, on April 13, 2023.

Arizona has determined that there is not enough groundwater for all of the future housing construction that has already been approved in the Phoenix area, and will stop developers from building some new subdivisions, a sign of looming trouble in the West and other places where overuse, drought and climate change are straining water supplies.

The decision by state officials marks the beginning of the end to the explosive development that has made the Phoenix metropolitan region the fastest growing in the country.

Maricopa County, which includes Phoenix and its suburbs, gets more than half its water supply from groundwater; most of the rest comes from rivers and aqueducts as well as recycled wastewater. In practical terms, groundwater is a finite resource; it can take thousands of years or longer to be replenished.

The announcement of a groundwater shortage — what the state calls “unmet demand” for water over the next 100 years — means Arizona would no longer give developers in areas of Maricopa County new permits to construct homes that rely on wells for water.

Phoenix and nearby large cities, which must obtain separate permission from state officials for their development plans every 10 to 15 years, would also be denied approval for any homes that rely on groundwater beyond what the state has already authorized.

The decision means cities and developers must look for alternative sources of water to support future development — for example, by trying to buy access to river water from farmers or Native American tribes, many of whom are facing their own shortages. That rush to buy water is likely to rattle the real estate market in Arizona, making homes more expensive and threatening the relatively low housing costs that had made the region a magnet for people from across the country.

“We see the horizon for the end of sprawl,” said Sarah Porter, director of the Kyl Center for Water Policy at Arizona State University.

The state says it would not revoke permits that have already been issued and is instead counting on water-conservation measures and alternative sources to produce the water necessary for approved projects.

A groundwater shortage would probably not derail the planned growth in the short term in major cities such as Phoenix, Scottsdale and Mesa, Porter said.

“There is still capacity for development within designated cities,” Porter said, referring to cities whose growth plans had already been approved by state water officials. Those cities would not be able to get approval to build anything beyond that amount.

The new restrictions would be felt hardest and most immediately in small towns and unincorporated swaths of desert along the fringes of the Phoenix metro area — where most lower-cost homes tend to get built. “Those have been hot spots for growth,” Porter said.

The announcement is the latest example of how climate change is reshaping the American Southwest. A historic 23-year drought and rising temperatures have lowered the level of the Colorado River, threatening the 40 million Americans in Arizona and six other states who rely on it — including residents of Phoenix, which gets water from the Colorado by aqueduct.

Rising temperatures have increased the rate of evaporation from the river, even as crops require more water to survive those higher temperatures. The water that Arizona receives from the Colorado River has already been cut significantly through a voluntary agreement among the seven states. Last month, Arizona agreed to conservation measures that would further reduce its supply.

The result is that Arizona’s water supply is being squeezed from both directions — disappearing ground water as well as the shrinking Colorado River.

And the water shortage could be more severe than the state’s analysis shows because it assumes that Arizona’s supply from the Colorado would remain constant over the next 100 years — something that is uncertain.

Arizona’s water problems have begun to percolate through the state’s politics. In January, the new governor, Katie Hobbs, a Democrat, pledged in her first major address to tighten controls on groundwater use around the state.

As evidence of that commitment, Hobbs released a report that she said had been suppressed by the previous Republican administration. It showed that an area west of Phoenix, called the Hassayampa subbasin, doesn’t have enough water for new wells. As a result, the Arizona Department of Water Resources said it would no longer issue new permits in that region for home construction that relied on groundwater.

But Hassayampa is just one of several subbasins that make up the larger groundwater basin underneath metropolitan Phoenix. The state’s announcement Thursday essentially extends that finding across the Phoenix area.

Despite the increasingly dire warnings from the state and water experts, some developers are confident that construction will not stop anytime soon. The Arizona water agency has given permission for construction on about 80,000 housing lots that have yet to be built, a state official said.

Cynthia Campbell, Phoenix’s water-resources management adviser, said the city largely relies on river water, and groundwater represents only about 2% of its water supply. But that could change dramatically if Arizona is hit with drastic cuts in its Colorado River allotments, forcing the city to pump more groundwater.

Many outlying developments and towns in Maricopa County’s sprawl have been able to build by enrolling in a state-authorized program that lets subdivisions suck up groundwater in one place if they pump it back into the ground elsewhere in the basin.

Campbell said the idea that you could balance water supplies like that had always been a “legal fiction” — one that now appears to be unraveling, as the state takes a harder look at where the groundwater supplies are coming up short.

“This is the hydrologic disconnect coming home to roost,” Campbell said.

In outlying areas, “a lot of the developers are really worried. They’re freaked,” Campbell said. “The reality is it all came back to catch us.”

This article originally appeared in The New York Times.

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