Valley developers want lawmakers to alter 43-year-old laws that restrict construction in areas without adequate water supply.
In a press release, the Home Builders Association of Central Arizona is not disputing that the state Department of Water Resources concluded that areas around Buckeye and Queen Creek do not have the 100-year assured water supply required under the 1980 Groundwater Act to allow new subdivisions.
That led the agency, under the direction of Gov. Katie Hobbs, to stop issuing permits for new home construction in those areas.
Now the organization says legislators need to remove what it calls a “moratorium on home building in the most affordable parts of the Valley,” saying the move is leading to rapidly escalating home prices.
Spencer Kamps, the organization’s executive director, said the provisions of the 1980 law and related statutes do not recognize what homebuilders have been doing to ensure that their new developments do not have a net negative effect on the supply of water.
He wants what he calls “sensible modifications” to remove hurdles that now exist.
Any change in laws, even if approved by legislators, also would need the blessing of the governor. And she appeared displeased at how the home builders have characterized what has been happening.
“The governor did not ‘enact a moratorium,’ ” said press aide Christian Slater. “The governor followed the law,” meaning the 1980 code.
And Hobbs was cautious about changes.
“Gov. Hobbs knows the 100-year assured water supply is a strength that fuels Arizona’s economic growth, not a weakness, and will not undermine it,” Slater said.
He said, though, the governor is working with business leaders and “responsible home builders” to find a sustainable and long-term solution that protects the water supply while making housing more affordable.
But Slater said there are limits.
“She will not sacrifice Arizona’s sustainable future growth,” he said.
What is driving all this is an announcement by Hobbs and state water officials in September the agency won’t issue legally required permits for new subdivisions in some areas on the fringes of Phoenix.
Tom Buschatzke, director of the Department of Water Resources, said a newly completed analysis showed the areas were about 4.9 million acre-feet short of what would be needed over the next century to meet that 100-year supply, about 4% of the anticipated need.
An acre-foot is generally considered enough to serve three families for a year.
That brought construction to a halt, including what the home builders say are approximately 200,000 already approved home sites.
The organization says this is more than about its members.
“The moratorium could potentially have a negative domino effect on construction and retail jobs in the affected communities and throughout the region,” it said, linking its request for changes to an ongoing problem of housing affordability.
It cites data from Redfin, an organization that provides residential real estate brokerage and mortgage organization services, which says the median price of an Arizona home went from $284,600 in 2020 to $436,200 now.
The issue of affordable housing facing lawmakers, however, is more complex than that.
There are proposals to restrict the zoning rights of cities, with proponents arguing that allowing more homes per acre would lead to more affordable housing.
And there has been a push to force cities to expedite the permitting process to cut down the amount of time between initial planning and finished construction.
For the moment, the issue of what’s required in water supply to build new homes affects only “active management areas” where there are limits on groundwater use but outside the service areas of cities that have their own assured supplies.
But it comes as the Governor’s Water Policy Council is looking at whether new laws should be imposed statewide, especially as some rural areas which currently have no or few restrictions on groundwater pumping, leaving cities and some small farmers concerned their wells will run dry.
Nothing in the September order brought all development in the Phoenix metro area to a halt, at least not at this point.
That’s because all existing municipal water companies are currently presumed to have their own 100-year supply.
So anyone seeking to build homes within that service territory is credited with having the amount of water required and can start construction.
Hobbs said that in and around Buckeye and Queen Creek, not served by municipal water companies, nothing in the order affected 80,000 lots where DWR already has provided the required certificate of assured water supply.
But everything beyond that has come to a standstill.
Kamps said he’s not ready to detail exactly what changes his organization wants.
“There’s a lot of issues being talked about,” he said. “I’m not at liberty to disclose them to you.”
Kamps said, though, the bottom line is simple.
“We need access to water,” he said. “And we’d like the $4 billion of investment that we’ve made in housing projects to be turned back on.”
Kamps said there are equity issues.
He said even in areas where there is a 100-year supply there still is a requirement for the cities to show that groundwater is being recharged. But he said that opportunity is being denied to developers outside those areas.
And Kamps said developers also cannot claim credit for at least a percentage of what is saved in groundwater pumping when the farmland they are developing is retired.
He said even higher-density residential development uses less water than what had been pumped to irrigate the crops that had been grown there.
Then there’s the fairness of it all.
Kamps said home builders are being singled out for restrictions that do not exist for other water users, ranging from industrial and commercial to residential rentals.
“So you can’t build a home in the Hassayampa River basis,” Kamps said.
“But you can build a manufacturing facility, you can build an industrial facility,” he continued. “And what that does is assure the groundwater tables will be pumped dry.”
Kamps said mandating more efficient use by others would leave more water for new homes.
He is not the only one to raise the issue.
“People don’t realize that housing is a small piece of the pie,” Senate President Warren Petersen said earlier this year. In fact, just 20% of the state’s water supply is for municipal use, most of that for homes.
The lion’s share of what’s left goes for agriculture, with the balance for industrial uses.
The Gilbert Republican said housing already is “regulated to the hilt and conserving.”
There also is a move to eliminate another exemption.
Rep. Gail Griffin, R-Hereford, wants the same requirement to be imposed on what are known as “build-to-rent” communities, subdivisions build not to sell but to lease out single-family detached homes. They are not subject to current requirements for assured water supply.