Developers flood Arizona with homes even as drought intensifies

California just had its driest January and February ever, and the snowpack is dangerously low. As the West enters its third year of drought, water sources are drying up and restrictions on the Colorado River are now hitting every sector of the Western economy, including home building.

If there is a shortage of water, there is also a shortage of housing. The United States currently needs more than one million more homes just to meet current demand, according to an estimate by the National Association of Home Builders. Other estimates are even higher. As millennials hit their prime home buying years and Gen Z enters the fray, the supply of homes for sale is at an all time high. Builders are hampered by high land, labor, and material costs, so they are focusing on the West and areas like suburban Phoenix, Arizona, which are growing rapidly.

On a large swath of land in Buckeye, Arizona, just west of Phoenix, the Howard Hughes Corporation is developing one of the nation’s largest planned communities, Douglas Ranch, flooding the desert with housing.

Howard Hughes CEO David O’Reilly says water won’t be a problem.

“Each home will have low-flow appliances, national desert landscaping, drip irrigation and reclamation,” he said, adding, “we are working with local municipalities, the town of Buckeye , all water districts, to make sure we enact real conservation measures, not just on our property, but across the region.”

The community is expected to have over 100,000 homes, bringing in at least 300,000 new residents. Major public builders like Pulte, Taylor Morrison, Lennar, DR Horton and Toll Brothers have already expressed interest in building homes, according to the Howard Hughes Corporation.

And it’s just one of more than two dozen developments underway around Phoenix, as the West is in the midst of its worst drought in more than 1,000 years.

“They expect the growth in this area to be a million people. And there’s no water to support that growth. Not with groundwater,” said Kathleen Ferris, in charge of senior water research at Arizona State University.

Ferris produced a documentary about the state’s Groundwater Management Act of 1980. It requires developers to prove that there are a hundred years of water in the ground they are building on. Douglas Ranch is located on the Hassayampa aquifer, which will be its main source of water.

“And the problem is that with climate change, there’s no backup water supply that you can use to save a development based entirely on groundwater. If it loses all of its water supply, there’s no water to back it up,” Ferris said. .

Mark Stapp is director of Arizona State University’s real estate development program at the WP Carey School of Business. He points to various reservoirs that could replenish groundwater, but admits there is still a risk due to the sheer scale of the development.

“I would say there is a legitimate concern about our future, and policymakers are very aware of that,” Stapp said.

O’Reilly argues that the current need for housing outweighs future concerns that may be unfounded.

“I don’t think the answer is to tell people looking for an affordable home in Arizona, ‘You can’t live here, go somewhere else.’ I think the responsible response, the thoughtful response, is to build affordable homes for them, but to build them on their own,” O’Reilly said.

A report last spring from ASU’s Kyle Center for Water Policy warned that the amount of groundwater in the Hassayampa sub-basin is significantly lower than regulators estimate, and that without a change in direction, “l “Physical groundwater supply below Buckeye will decline and be unsustainable.” The report also states that the century-old pattern for groundwater is constantly changing, particularly in light of climate change. The state water resources department is now determining if the basin is in fact worth a hundred years of water.

“The bottom line is that there are places in this state, in this valley where there is enough water supply to support new growth. We don’t have to go far into the desert and pump groundwater to build new homes,” Ferris said. .

Land, of course, is cheaper in the desert, but Ferris says, “Well, at some point it comes at a cost.”

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