When a small Arizona community called Rio Verde foothills lost its water supply a year ago, forcing locals to skip showers and eat off paper plates, it has a poster child for unwise desert development. The rural neighborhood of about 2,000 people north of Phoenix had relied on trucked water deliveries from the nearby city of Scottsdale, but the city chose to stop deliveries to conserve its own water a climate-driven drought on the Colorado River.
Last month, after months of public debate over how to resolve the crisis in the Rio Verde foothills, the state government approved an agreement that restore permanent water access to the beleaguered community, albeit with much higher bills than residents are used to. But when the new legislative session begins next week, the Republican-led chamber may actually weaken, rather than tighten, the standards governing new development, opening the way for thousands more homes to pop up in water-unsafe suburbs of Phoenix and Tucson.
“The broader solutions are more difficult, and people may not be ready to think about what solving the problem would really take,” said Priya Sundareshan, a Democratic state senator who represents part of Tucson.
When Arizona developers build six or more homes on a plot of land, they must demonstrate that they can provide water to those homes for at least one hundred years. This rule exists to protect homebuyers from the kind of land fraud that has been notorious in the state for decades, but over time some landowners have found a way around it. The developers of so-called “wildcat” subdivisions divide large parcels of land into smaller parcels and sell off hundreds of those parcels one by one, bypassing the requirement to ensure a long-term water supply.
Rio Verde Foothills is one such subdivision. Some neighborhood residents have residential wells that pump water underground. But because there isn’t much water in the area’s aquifers, most rely on trucks delivering water from the city of Scottsdale, which has rights to water from the Colorado River. When Scottsdale shut off the water last year, Rio Verde had nowhere to turn for replacement supplies: There was no extra groundwater, and all the water from the Colorado River was spoken. Home values dropped, and local residents who found alternative water trucks had to pay monthly bills that exceeded their mortgage payments.
As the media frenzy surrounding Rio Verde Foothills reached a fever pitch last summer, the state legislature passed a bill which forced Scottsdale to provide water to the neighborhood by 2025. A few months later, a state regulator approved a long term agreement between the community and a large utility company called Epcor, which agreed to build a new water standpipe in the neighborhood and bring in a new water supply from elsewhere in Phoenix. Rio Verde Foothills residents will pay for the $12 million project through water bills that could be double or triple current rates. The deal also limits future growth in the neighborhood, allowing just 150 additional homes to access the standpipe.
“It’s been an exhausting, exhausting battle for this community, and people are not happy with how much it’s costing,” said John Hornewer, a Rio Verde resident who runs the neighborhood’s largest water transportation company.
But the state legislature’s solution doesn’t address the larger problems presented by wildcat subdivisions. While Democrats and some Republicans in the legislature tried to add language that would have limited when and how developers could exploit the wildcat loophole, they couldn’t get enough support to send it to the governor’s desk. Democratic Gov. Katie Hobbs initially held out for a fix for the loophole — she vetoed an initial bill in May it didn’t tackle the wildcat issue – but she eventually did undersigned A Rio Verde-focused bill reached her desk the following month, acknowledging that the neighborhood needed immediate help.
“The bill did nothing to fix the underlying problem,” said Sundareshan, the state senator from Tucson. “We could find ourselves with many more communities … in the same situation.”
Frederic J. Brown / AFP via Getty Images
Hobbs continued to push for broader reform on the feral cat issue. Last year, she created a “water policy council” made up of experts and industry leaders and tasked it with alleviating the state’s water problems, including the wildcat loophole. The council released its final recommendations in Decembercalling on the legislature to emphasis on these subsections and give local governments more power to regulate them. It’s not clear how many such subdivisions exist, but they have appeared outside of Phoenix and Tucson at least two decades.
Democratic lawmakers will make another push once the state legislative session begins next week, but Hobbs’ proposed reforms still faces fierce opposition. Many members of the state legislature oppose more government involvement in water regulations, and the state’s housing lobby has fought past efforts to curb the kind of subdivision that allows wildcat development.
“There is an appetite for [reform], but I think it will get lost in the shuffle,” said John Kavanagh, a Republican state senator who represents the Rio Verde Foothills area. “The homebuilders will fight aggressively against a bill that is divided, and you have members with a more libertarian bent who believe that the right to property is almost unlimited.”
Indeed, homebuilders are now pushing the legislature to move in the other direction, arguing that the 100-year water supply standard is holding back the state’s economic growth. Back in June, Hobbs’ administration new water supply approvals suspended in the Phoenix area, stating that the city’s aquifers do not have enough water to support future development over the next century. This left several major development projects in limbo, with builders unable to proceed with tens of thousands of homes.
Hobbs’ administration has since moved to ease the moratorium in response to protests from the real estate industry, and regulators may soon allow builders to fast-growing suburbs like Buckeye resume construction on stalled projects. But the state’s builders are seeking more sweeping changes to the 100-year water supply standard: They argue that lawmakers should create an incentive to replace water-intensive cropland with neighborhoods, which require far less water than large-scale agriculture. The builders also argue that lawmakers need to adjust the state’s model for calculating groundwater deficits, which they say is too pessimistic.
“If the Legislature and the governor’s office do not agree to the necessary changes to resolve this issue this year, it will be very devastating to our housing affordability, our housing stock and our economy,” said Spencer Kamps, the vice president of legislative affairs for the Home Builders Association of Central Arizona.
The future of the 100-year requirement is likely to take center stage this year, along with a parallel debate over how to regulate the kind of intensive groundwater pumping that has dried up wells and caused land to sink rural areas such as Cochise County. The issue became so controversial last year that two members of Hobbs’ water policy board with ties to the agricultural industry, which is responsible for some of the most aggressive pumping, resigned even before the board had completed its recommendation.
Until the legislature reforms the wildcat subdivision statute, however, there is nothing stopping developers from creating more vulnerable neighborhoods in the middle of the desert. Hornewer, the Rio Verde Foothills water carrier, said he was sure his neighborhood’s crisis would play out somewhere else.
“It’s probably already happening,” he told Grist.
