Arizona limits housing projects in Phoenix area over groundwater supply concerns

Arizona will no longer grant certifications for new residential developments in Phoenix, it’s largest city, due to concerns over groundwater supply.

The announcement indicates that the Phoenix area, currently the nation’s fastest-growing region in terms of population growth, will not be able to sustain its rapid growth because of limited freshwater resources. The state’s new policy won’t impact developments that have already been approved, so the growth limit ramifications will not be felt in the short term.

Longer term, though, housing developers will have a high bar to overcome to get new projects approved. They will have to demonstrate that they can provide an “assured water supply” for 100 years using water from a source that is not local groundwater.

About 80,000 unbuilt lots for housing are already approved and can go forward. The state’s decision is not expected to reduce water use for industry and manufacturing. But it could be a warning sign that parched areas of the West face tough decisions over how much growth they can support in the years ahead.

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