A Maricopa County Superior Court judge just cleared the way for the construction of hundreds of thousands of new homes in exurban communities like Buckeye and Queen Creek.
Judge Scott Blaney agreed with the Home Builders Association of Central Arizona that state officials didn’t follow proper procedure when they decided no new subdivisions could be built in the far reaches of the Phoenix area unless certain groundwater regulations were met.
Last week’s ruling was the latest move in a long-running tussle between developers who see big dollars in the undeveloped land around Phoenix and state officials who worry about the dwindling supply of groundwater amid potential cuts to Arizona’s share of Colorado River water.
But it won’t be the last move, of course. Officials with the state Department of Water Resources, which maintains it didn’t develop new rules but rather acted in accordance with current law, said they’ll appeal the ruling when it becomes final in May.
In the meantime, the conservative Goldwater Institute, which represented the builders in court, is bubbling with glee.
“We’re delighted that the court has struck down the bureaucracy’s newfangled restriction on home construction — a rule that reduced the availability of homes and raised housing costs in one of the nation’s fastest-growing housing markets,” Jon Riches, the vice president for litigation at Goldwater, said in a statement to the press following the ruling. “This case is just the latest example of the dangers of the unelected, unaccountable administrative state.”
New state of play
Regardless of the state’s intent to appeal, for now, ADWR can’t use its “unmet demand” finding to block new groundwater-dependent residential development in the Phoenix groundwater Active Management Area.
That’s the term the state used in January 2023 when Gov. Katie Hobbs and ADWR released a new groundwater model projecting that groundwater demand would outstrip supply by about 39 million acre-feet over the next 100 years.
That “unmet demand” meant that the state would not issue certificates of assured water supply to homebuilders putting up subdivisions outside of the service area of large, designated water providers.
It was a major event for the Hobbs administration, one covered in the national press as evidence that Arizona was running out of water and the growth that had characterized much of the state’s history would halt.
A New York Times headline from June 1, 2023.
And the decision was contentious within the state: In January of 2025, the Home Builders Association of Central Arizona sued the DWR.
The HBACA contends that the state, in effectuating the moratorium, had illegally adopted new rules for water supply certification under the guise of current regulations. Prior to the “unmet demand” finding, developers just had to demonstrate access to the groundwater underneath their feet. Now, they contend, the state required developers to attest to a 100-year supply of water across the entire AMA.
In other words, if water dropped below allowable depths in a well anywhere in the basin, the developers couldn’t build.
HBACA also argued that Hobbs was hamstringing the construction of new housing at a time of skyrocketing costs. But the core of the lawsuit related to process. State law provides a process for the adoption of new administrative rules. And departments are generally only supposed to develop rules when prompted by the Legislature – DWR, for example, has no power to make laws on its own.
But the department didn’t undertake a rulemaking process — one that would provide opportunity for public feedback and scrutiny — under the Arizona Administrative Procedure Act.
The state’s position is that these aren’t new rules at all. ADWR “has never limited its review to the groundwater directly below a proposed development without considering other uses in the area,” an agency spokesperson told the Arizona Republic’s Stacey Barchenger.
Indeed, the department had issued an unmet demand finding before — under the Republican administration of Gov. Doug Ducey, no less. In 2019, ADWR modeling showed insufficient groundwater supplies in Pinal County, halting the issuance of new certificates of assured water supply there.
Don’t drain the bathtub(s)
But that Ducey-era finding affected fewer planned homes than the unmet demand determination in the Phoenix AMA, and it didn’t generate the same response from the Home Builders.
In court filings, the state said the Legislature wouldn’t have granted ADWR the power to administer the assured water supply program — a product of the state’s 1980 Groundwater Management Act that generally requires builders to demonstrate a 100-year assured water supply to get permits from the state — if it didn’t intend for the department to be able to protect groundwater supplies.
“The suggestion that the Legislature tasked ADWR with assuring a water supply for new subdivisions for at least 100 years but did not intend ADWR to consider threats to the water supplies for current users and issued determinations in the area is absurd,” lawyers for the state wrote.
And while you can’t look at the supply of groundwater in the Phoenix AMA as one big bathtub, there are many interconnected sub-basins, Cynthia Campbell, the Director of Policy Innovation for the Arizona Water Innovation Institute at Arizona State University, told us.
In other words, a dry well in one part of the basin may well be an indicator of water supplies elsewhere.
This is especially threatening to cities like Chandler, which relies on water from a designated service provider — and thus isn’t affected by the moratorium — but sits in close proximity to exploding exurbs like Queen Creek, which relies almost entirely on groundwater certificates.
Campbell describes the “unmet demand” filing as part of a necessarily conservative approach in groundwater modeling. The model is naturally full of assumptions — about supply, demand, the rate of pumping and other conditions, she said. But it’s better for the department to err on the side of caution than abundance.
“If you’re the department, you have to be careful,” she said. “You’re telling people that are about to invest in a home that it’s going to have water for 100 years. What happens if you’re wrong? There’s no alternative.”
The state’s action in the Phoenix AMA was remarkable, if not quite unprecedented. But “the model had never showed this problem before,” Campbell said.
She also said that nobody paying attention to water in the AMA should have been surprised at the unmet demand finding. Campbell, a former water resources management advisor for the City of Phoenix, said that longtime ADWR chief Tom Buschatzke often told water managers in the area that he was increasingly concerned about groundwater pumping.
“If I heard that warning once, I heard it a 1,000 times,” she said.
But for the Home Builders Association, the unmet demand finding represented an abrupt change from the status quo, one that left tens or even hundreds of thousands of planned homes in the lurch.
As you can see from the Home Builders Association of Central Arizona website, copious water is key to its marketing strategy for home buyers.
While the filings from both sides of this lawsuit debate hydrology, the key dispute here is about administrative process and the potential financial losses that the builders face. And Blaney, the judge in the case, evidently found the builders’ argument persuasive.
“Here, ADWR is utilizing criteria when reviewing applications that did not previously exist, while claiming that it is still applying the existing rules,” Blaney wrote.
The assured water supply program is highly contentious. It’s the target of several Republican bills at the Legislature which generally look to make it easier for builders to receive certificates.
And a program the state developed to allow builders and cities to use alternate water supplies to receive certificates is subject to its own, as-yet unresolved lawsuit from the builders and Republican legislative leadership.
But groundwater needs protection now more than ever, Campbell said, as the state faces a megadrought and the possibility of losing a huge chunk of its allocation of Colorado River water — an important counterweight to groundwater overpumping.
“We can overpump this resource. We can go back very quickly to what we saw prior to the Groundwater Management Act,” she said. “It really is a time for people to start to pump the breaks a little bit.”
She’s safe. She’s ok: Former Agenda intern Alysa Horton, who was at the White House Correspondents’ Dinner on a scholarship when shots rang out, wrote a haunting piece about the fear that pulsed through her as she hid in a restroom and texted her CSPAN-watching parents for info.
“After a couple of minutes of quivering in my stall, I poked my head out and whispered, ‘What’s going on?’
My tearful face met a woman in a TSA jacket looking at me from a few stalls down.
‘Do you want me to tell you the truth, or do you want me to lie?’ she asked.”
Where do robot dogs come from?: The Border Security Expo is coming back to Phoenix next month, the Arizona Mirror’s Jerod MacDonald-Evoy reports. That means a whole lot of high-ranking Department of Homeland Security officials will listen to pitches from tech companies trying to sell their wares (or, as a Border Patrol agent once described them to Curt, “a bunch of shit we don’t need”).
Gonna be entertaining: The Navajo County Board of Supervisors picked Sylvia Allen to replace Rep. David Marshall, who the supervisors chose to be the next Navajo County Recorder (although there are clear legal problems with that appointment), per the Republic’s Helen Rummel. As we noted yesterday, Allen is quite a character. She used to be a lawmaker and was known for spouting bizarre, often racist, conspiracy theories, one of which House Democrats resurfaced yesterday, apparently after they learned Allen was coming back.
Inching closer: The Fifth Circuit Court of Appeals threw out a challenge to a Texas law that served as a model for Prop 314, Arizona’s voter-approved measure that would allow local and state police to arrest people they suspect of crossing the U.S.-Mexico border illegally, per Capitol scribe Howie Fischer. The appeals court didn’t rule on the constitutionality of Texas’ SB4, which needs to be established before Prop 314 can take effect. Instead, the appeals court ruled the challengers to SB4 — El Paso County and two immigrant rights groups — didn’t have legal standing to sue.
Coming back to haunt her: A viral video of someone asking Gov. Katie Hobbs who paid for her ticket to a Diamondbacks game in Mexico City prompted some damage control from the governor’s office. Hobbs told the unknown questioner it was “none of your business” who paid for the tickets, but now her spokesman says she “regrets” that statement and explained that the Arizona Hispanic Chamber of Commerce paid for the trip, the Republic’s Stacey Barchenger reports.
We’ll tell you who pays for the Agenda — smart readers who want to support local news!
Coming back to haunt him: The war in Iran loomed large at a veteran’s town hall in Tucson hosted by JoAnna Mendoza, a Democratic candidate in Southern Arizona’s competitive Congressional District 6, Arizona Public Media’s Nick Rommel reports. One Army veteran said he “loved every single thing” Trump said in the 2024 campaign, but “apparently, I’m seeing completely the opposite of what he said.” The backlash to Trump’s policies may be why Mendoza was leading two-term Republican Rep. Juan Ciscomani 47-44% among CD6 voters, per a poll from Conservatives for America, the Tucson Sentinel’s Jim Nintzel reports.
While several congressmen grilled Secretary of Defense Pete Hegseth about the Iran War during a congressional hearing yesterday, Arizona Republican Congressman Abe Hamadeh used the opportunity to giddily share his fantastic idea to get the people of Iran to back the U.S. in its war against them.
“I would love for President Trump’s Truth Social posts to be leafletted all over Iran, to be honest with you,” Hamadeh said. “I think that would encourage them to actually take to the street.”
Yeah, Abe, surely that’ll do it.
The guy just carpet bombed their capital, killed 110 children in a targeted strike and threatened their civilization with nuclear apocalypse — but drop a few pieces of paper with Trump’s unhinged social media posts on them and they’ll definitely get behind the cause.
At this rate, we expect Hamadeh to be appointed to a cabinet position any day now.