Gov. Hobbs' Illegal Water Rule Threatens Housing in Arizona-Goldwater Sues

January 22, 2025 (www.waternewswire.com) Arizona is facing a housing crisis, and now Governor Katie Hobbs is taking illegal actions that make the problem even worse, throwing up roadblocks to new home construction.

Today, the Goldwater Institute sued the Hobbs administration on behalf of the Home Builders Association of Central Arizona to halt one of the most significant bureaucratic overreaches in Arizona's history.

In certain parts of Maricopa County, builders must obtain a certificate showing a 100-year groundwater supply before they construct new housing-and home builders have historically met this requirement. But in November, the Arizona Department of Water Resources imposed a new policy, based on a flawed concept called "unmet demand," that prevents new housing projects in large portions of the Valley, including Buckeye and Queen Creek. Although the phrase "unmet demand" does not exist in Arizona law, this new rule now requires homebuilders to show a 100-year groundwater supply across the entire water management area (a specially designated area with a reliance on groundwater) rather than at the site of the proposed development. In other words, if a groundwater shortage is projected anywhere within a management area, the Department of Water Resources now claims that there is insufficient groundwater elsewhere in the Valley.

The model further compounds this issue by arbitrarily placing wells throughout the management area that do not move over the course of 100 years, far in excess of the life expectancy of most wells. This approach defies common sense. If water in a hypothetical well is projected to dip below a certain depth in the East Valley, the agency declares a water shortage for developments in entirely unrelated areas like the West Valley, prohibiting homebuilders in the affected areas from constructing any new homes.

The new rule is also illegal-it was imposed without legislative authorization or the required formal rulemaking process.

Under Arizona law, sweeping policies like the "unmet demand" rule must go through formal rulemaking, ensuring input from stakeholders and those impacted. Furthermore, all agency rules must be authorized by the Arizona Legislature-a principle rooted in our democratic system, where lawmaking is entrusted to elected representatives, not faceless bureaucrats.

"Decisions on vital statewide concerns like the availability of affordable housing and the responsible stewardship of our natural resources should be made through a transparent, democratic process-not imposed by executive fiat," Goldwater Institute Vice President for Litigation Jon Riches says.

"Gov. Hobbs' deeply inaccurate and flawed claim that Arizona is running out of groundwater is having devastating effects on housing affordability in the state, which already ranks among the worst in the country," adds Jackson Moll, CEO of the Home Builders Association of Central Arizona. "Today's lawsuit strives to uphold the basic democratic and separation of powers principles found in the state constitution, protect our state's ability to conserve its precious natural resources, and grow economically for the future."

The Goldwater Institute has a long history of standing up to government bureaucrats when they overstep their authority, both in Arizona and around the nation. We'll keep fighting government overreach-and ensuring bureaucrats can't run roughshod over our rights.

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