You wouldn’t know about Arizona’s recently imposed limits on housing development by driving through Queen Creek. Banners wave on the fronts of spacious model homes inviting buyers to come look. Construction crews are busy erecting whole new neighborhoods.
On a recent morning, Paul Gardner, Queen Creek’s utility services director, stopped by one of the town’s newest master-planned communities.
“In Queen Creek we probably have a dozen subdivisions similar to this at similar phases, and we’re averaging somewhere between 1,200 to 1,500 homes a year of new move-ins,” Gardner said.
Queen Creek is the fastest-growing city in Arizona and the 14th fastest-growing city in the nation, according to U.S. census data. In his nearly 40-year career managing water in the town, Gardner has witnessed that boom firsthand.
“In 1985, we had 500 customers, today we have close to 40,000 customers, so it’s been tremendous growth,” Gardner said. “You just do the mad rush to make sure you have enough facilities, make sure you have enough water, and that you’re going to be able to meet the growth that you know is coming,”
But to meet the majority of that demand for water, the town taps into the Phoenix area’s finite underground aquifer. For the past year, that has put Queen Creek in a difficult position.
To build a house in most urban parts of Arizona, you first need to prove that property has enough water to last 100 years. But last June, Gov. Katie Hobbs announced metro Phoenix’s groundwater was projected to fall short within a century, so the state would stop allowing new development in groundwater-dependent areas. The biggest impacts would be in Buckeye and Queen Creek. Almost a year later, even though construction hasn’t stopped in Phoenix’s outer suburbs, developers remain concerned. But officials are now working toward a new policy solution for affected communities.
Thinking back to last year’s announcement, Gardner said he wasn’t surprised the Hobbs administration moved to rein in development as a way of addressing groundwater concerns.
Even so, he said, “you want to have certainty. Everybody wants certainty.”
After the announcement, construction projects that already had 100-year water certificates were allowed to continue.
“People thought growth just stopped,” Gardner said. “Well, we probably had half a dozen subdivisions that were going vertical right after the announcement, and there’s probably a few more that will break ground.”
But, Gardner said, five to 10 years down the road, when construction wraps up on all of those grandfathered-in projects, there could be a slowdown.
So for developers, the issue is urgent.
“We’ve got to solve this within the next 18 months, maybe two years,” said Mark Stapp, director of the real estate program at ASU’s WP Carey School of Business.
Developing homes takes years of advance planning, Stapp said. And with the rate of growth on metro Phoenix’s periphery, developers are already struggling to keep up with demand. Slowing construction could lead to even more of an imbalance.
“It will be difficult to get new lots approved far enough in advance of market need that we don’t have a supply problem,” Stapp said. “We already have an affordability and an attainability problem in this marketplace. That will exacerbate matters really significantly, and then that begins to put a damper on our economic development.”
But state water officials now think they’re close to a plan to make a 100-year designation more attainable in places like Queen Creek. The Arizona Department of Water Resources is developing what it calls an Alternative Path to Designation of a 100-year Assured Water Supply, or ADAWS.
“It’s facilitating incremental growth and transitioning providers from groundwater to alternative supplies,” said Carol Ward, assistant director for planning and permitting with ADWR.
For communities that don’t have 100-year designations, right now there’s no clear way to get one. And even with limits in place for new construction, groundwater pumping is set to continue for existing customers in those municipalities.
Under the ADAWS plan, communities that don’t have 100-year designations could keep using groundwater to grow their populations in the near term, but they would have to commit to finding new sources of water in the long term. Possible options could include treated effluent water, water from the Colorado or Salt rivers, or other sources. And as the communities bring in those new supplies, little by little, they would have to give up groundwater.
“It gives them some flexibility in the short term in terms of how they manage their supplies,” Ward said. And over time, she said, “the risk of groundwater shortages as compared to current conditions will be reduced.”
Details about how much groundwater the impacted communities would have to phase out and how fast they’d have to achieve reduction goals are not yet final. Since the Governor’s Water Policy Council first proposed the rule changes in November, some particulars of the plan have changed.
For example, the council’s original proposalsuggested each time a user secures a new alternative water source, it would have to dedicate 30% of that new supply to replacing groundwater. In ADWR’s most recent draft, the plan says just 25% of each additional water allotment needs to be used to offset groundwater pumping.
Some public commenters, including Kathleen Ferris, who helped draft Arizona’s landmark 1980 Groundwater Management Act, have argued the proposed change doesn't require users to offset their groundwater use fast enough to be truly sustainable.
But the town of Queen Creek in a public comment told ADWR the plan is asking communities to transition away from groundwater too fast to be realistic. The town would prefer to lower the offset rate to 20%.
Ward said the department is continuing to review stakeholder feedback.
ADWR can change these rules without legislative approval through a rulemaking process with the Governor’s Regulatory Review Council. ADWR does not have a firm timeline to complete that process. But Ward is confident the plan will take effect within the next year or so.
“This really is a viable path forward,” Ward said.
In the meantime, Queen Creek is already pursuing alternative sources of water. The town last year paid $24 million for an allotment of Colorado River water that used to go to a farm in La Paz County. It’s also negotiating to buy property in the Harquahala Valley, which would allow it to pump water from a “transportation basin,” which is a separate aquifer outside the Phoenix area, specially designated for urban uses. And Queen Creek is advocating to raise Bartlett Dam, which would allow the town to get water from the Verde River.
“We’ve been working for the last 12 months to help everybody understand that we have been planning for a long time,” Gardner said.
But, he said, all of the town’s options for alternative water sources would take hundreds of millions of dollars and many years to build new facilities and infrastructure.
“We just can’t do it all overnight,” he said.
Looking around new master-planned communities that bring more than 1,000 new homes to Queen Creek annually, Gardner knows the town needs to be bullish on sourcing water.
“We’re going to end up with about 500 gallons a day in the middle of summer that needs to go to every single home, and we’re going to need about 155 gallons a day of treatment for wastewater, and you just multiply that times 1,200 or 1,500, that’s what you have to have capacity for,” Gardner said.
Even though the terms of the ADAWS plan aren’t final yet, Gardner said he’s grateful at least for the discussion of a path forward.
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