Oh, Hell No! Developers Want Waivers of 100 Year Assured Water Supply Certification for New Homes

This would be BEYOND a terrible idea. No Dem should even contemplate supporting this nonsense.

Developers in the Phoenix area want lawmakers to alter 43-year-old laws that restrict construction in areas without adequate water supply. 

In a press release Thursday, 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 state 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. So 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 homebuilders 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. 

“Governor 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 homebuilders” 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. 

AZCapTimes

Homebuilders seem to be sniffing around the idea of escaping from their obligation to ensure an adequate guarantee of water supply to any new homes. That is a recipe for a future real estate market disaster. New home development, and thus the limits of Arizona’s population growth, MUST be limited by our water supply.

There is plenty of capacity in our water supply to ensure a 100 year supply certificate to any new development, but it may – and likely will – cost developers to ensure those supplies can reach any new development. And THAT is precisely the costs these builders are trying to avoid and pawn off on municipalities and state – or individual homeowners.

We must not allow those foundational development costs of ensuring an adequate and sustainable 100 year supply to be shifted or kicked down the road without careful study and clear disclosure of who bears those costs. And, god forbid, the costs of ensuring access to water should NEVER be left to individual home owners who have never been informed that they risk bearing such costs themselves when they purchase a home!

What is driving all this is an announcement by Hobbs and state water officials in September that 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 of water 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 water to serve three families for a year. 

That brought construction to a halt, including what the homebuilders say are approximately 200,000 already approved home sites. 

The organization says this is more than about its members. 

AZCapTimes

No, it’s not. They gambled in beginning to develop 200K lots that could not meet state water supply requirements and they want to be bailed out of their bad bet: that’s the bottom line here.

“The moratorium could potentially have a negative domino effect on construction and retail jobs in the affected communities and throughout the region,” its release says, 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 reduce the amount of time between initial planning and finished construction. 

AZCapTimes

Don’t fall for the “but the economy!” appeals. I haven’t any problem with changes to zoning and approval that would make building homes denser and faster, but they cannot be allowed to be built if no one knows from where those home owners are going to get their residential water.

For the moment, the issue of what’s required in water supply to build new homes affects only certain areas of the state – those inside “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 that 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. 

And even 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. 

AZCapTimes

As it should. We must not let some bad investment bets by developers to force our legislature into doing anything so rash and foolish as to waive the already very minimal 100 year supply requirements. If anything, we need to expand the requirement to all of Arizona, or adopt new AMAs.

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 homebuilders are being singled out for restrictions that do not exist for other water users, ranging from industrial and commercial to residential rentals. 

AZCapTimes

This argument is total nonsense, and elides the fact that industrial and commercial developers are sophisticated enough to realize any risk they undertake if they aren’t within a municipality and undertake development without an assured water supply: home buyers are NOT.

“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.” 

AZCapTimes

Totally agree that such development risks mining out our ground water, but it doesn’t leave a homeowner holding the bag on a property that has become essentially worthless, which is the whole point of an assure water supply certificate. Assured water supply certification is NOT designed to protect or conserve our water supplies; the program is designed to protect HOME BUYERS.

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 “regulating to the hilt and conserving.” 

AZCapTimes

Warren Petersen, as usual, is wholly full of shit: we are neither regulating nor conserving nearly enough. We have essentially NO regulation outside our Active Management Areas, and there are NO statewide conservation efforts worthy of the name. We could and should provide incentives and programs to help ag users become more water efficient: we don’t. He is right that municipal, and thus the vast majority of residential use, is only a small part of our water use. There is a great deal of room for more efficient use and shifting use to municipal use, but keep in mind that a lot of current use is wholly unsustainable ground water mining at rates well above recharge rates.

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 built not to sell but to lease out single-family detached homes. They are not subject to current requirements for assured water supply. 

AZCapTimes

I gotta say it is good news that Griffin seems to be open to closing the rental loophole, because hedge funds are driving a Mack truck full of exceptions through that loophole. Just because housing is BUILT to be a rental does NOTHING to ensure that it STAYS a rental with the investor landlord owners bearing the risk of having no assured water supply. Rentals can, and do, become occupant owned, and with this loophole on the books, those buyers could be burned for everything they invest.

No Arizona Democrat should allow any exceptions to a full requirement of a 100 year assured water supply on any new home. The requirement protects homebuyers and waiving it in any way places peoples’ life savings at risk. There are many creative ways to expand our housing supply in Arizona: this must not be one of them.

Here is a chart of Arizona’s water supply:

Every part of our supply – the Colorado, state surface waters, and groundwater – are finite and are quickly depleting and/or reducing. If we want more water available there is only two realistic options to expand supplies: use what we have more efficiently and transfer the savings to other uses, or reuse what we already have. That 5% share of reclaimed water is the most promising source of future supply, and the ONLY part of this chart that can actually EXPAND.