An Arizona court ruling has given homebuilders a win in a fight over groundwater rules, but it does not remove the state’s 100-year water-supply test for new subdivisions in regulated areas.
A Maricopa County Superior Court judge voided a rule used by the Arizona Department of Water Resources after a challenge from the Home Builders Association of Central Arizona. A Havasu News story framed the decision around new-home approvals in fast-growing desert communities where water rules can affect whether subdivided lots can be sold.
The court fight centered on an alternative path for showing water availability in parts of Arizona where groundwater is already under pressure. The judge rejected a state requirement that developers show access to 133% of a project’s projected water demand, but builders in Active Management Areas still have to satisfy Arizona’s assured-water rules before selling subdivided lots.
For buyers, the question is whether the development is served by a designated water provider or has the water paperwork needed for lot sales.
Judge Rejected the 133% Water Requirement
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Maricopa County Superior Court Judge Scott Blaney ruled that ADWR could not require developers using the challenged path to show access to the water needed for a proposed development plus another 33% on top of that.
According to Arizona Capitol Times, the judge found that ADWR has authority to make rules for determining whether development in Active Management Areas meets Arizona’s water-supply law. The problem was the extra 33% requirement, which developers challenged as beyond the agency’s authority.
The ruling could affect some projects, but appeals, ADWR review, provider status, and project-specific supply still matter. Gov. Katie Hobbs’ office criticized the decision and said the state would appeal, while builders argued that the agency’s rule added costs and blocked housing in areas where demand remains high.
The 100-Year Water Test Still Applies
The ruling does not allow new subdivisions in Arizona’s Active Management Areas to skip the assured-water process. The Arizona Department of Water Resources says its Assured Water Supply Program evaluates whether a 100-year water supply is available while considering current demand, committed demand, and growth projections.
ADWR says developers in Active Management Areas must demonstrate an assured water supply before recording plats or selling parcels. The agency also says the Arizona Department of Real Estate will not issue the public report that allows lot sales without that demonstration.
A subdivision still needs a legally accepted water supply; the ruling narrowed one disputed method ADWR used to measure extra supply under the challenged rule.
Phoenix Groundwater Projections Still Shape the Fight
The legal dispute grew out of Arizona’s effort to manage groundwater in the Phoenix Active Management Area, a region that includes much of metro Phoenix and fast-growing edges of Maricopa County.
ADWR’s Phoenix groundwater update says its model projected 4.86 million acre-feet of unmet groundwater demand over 100 years under current conditions. The agency also says its 2024 model update does not support issuing assured-water determinations based on groundwater in the affected areas.
ABC15 reported that Sarah Porter, director of the Kyl Center for Water Policy, said Arizona’s regulations put water before growth and that groundwater should be treated as a non-renewing supply.
Buyers Should Ask for the Water Paperwork
In fast-growing desert communities, buyers should ask about water before signing. They can ask whether the project is served by a designated water provider, whether it has a Certificate of Assured Water Supply, and whether the developer has the public report required for lot sales.
Buyers can also ask whether the subdivision relies on groundwater, surface water, effluent, stored water, or a mix of supplies, and whether the project’s approval depends on future agency action, litigation, or a provider’s designation status.
Before signing a contract, buyers should review the public report, ask the builder or sales office how the subdivision satisfies Arizona’s assured-water rules, and check ADWR records tied to the project or provider.