Arizona announces limits on construction in Phoenix area as groundwater disappears

Arizona officials announced Thursday the state will no longer grant certifications for new developments within the Phoenix area, as groundwater rapidly disappears amid years of water overuse and climate change-driven drought.

A new study showed that the groundwater supporting the Phoenix area likely can't meet additional development demand in the coming century, officials said at a news conference. Gov. Katie Hobbs and the state's top water officials outlined the results of the study looking at groundwater demand within the Phoenix metro area, which is regulated by a state law that tries to ensure Arizona's housing developments, businesses and farms are not using more groundwater than is being replaced.

The study found that around 4% of the area's demand for groundwater, close to 4.9 million acre-feet, cannot be met over the next 100 years under current conditions - a huge shortage that will have significant implications for housing developments in the coming years in the booming Phoenix metro area, which has led the nation in population growth.

State officials said the announcement wouldn't impact developments that have already been approved. However, developers that are seeking to build new construction will have to demonstrate they can provide an "assured water supply" for 100 years using water from a source that is not local groundwater.

Under state law, having that assured supply is the key to getting the necessary certificates to build housing developments or large industrial buildings that use water. Many cities in the Phoenix metro area, including Scottsdale and Tempe, already have this assured water supply, but private developers also must demonstrate they can meet it.

Thursday's announcement is an example of the law working as intended, according to an analysis by Arizona State University's Kyl Center for Water Policy. Growth in the Phoenix area will likely continue under the new restrictions, the analysis said, but the rate of growth will likely change.

"It's going to make it harder for developments to spring up on raw desert in the far-flung parts of town where developers like to develop," Sarah Porter, the director of the Kyl Center for Water Policy, told CNN. "It's another impediment to that kind of development, like new subdivisions out in Buckeye or Queen Creek."

Porter said the change won't necessarily curtail development in the booming Phoenix metro area, but it could push it towards bigger and older cities like Tempe and Scottsdale. Nor is it expected to curtail water use for industry and manufacturing - an important distinction given Arizona is quickly becoming a hub for advanced manufacturing of technology, including semi-conductor chips.

"It really is only impacting housing subdivisions," Porter said. "There will continue to be new homes built because they have already proved up their 100-year water supply using groundwater, and they were figured into the model. There's this runway of continued development."

But Porter likened Thursday's announcement to a "big, flashing billboard" telling private developers to find a new, more sustainable source of water - or build elsewhere.

Besides conserving water and projects recycling water, Arizona elected officials - including Sen. Mark Kelly, a Democrat - have advocated for creating new water supply through desalination, where ocean water is treated to remove the salt.

Desalination is used in some water-scarce countries, but it's been criticized for being expensive and energy-intensive.

Arizona and other Southwest states are facing water shortages on a number of fronts. In addition to Arizona's groundwater crisis, the state has also faced significant shortages of its surface water allocation from the Colorado River, which it shares with six other states.

And while the groundwater supplies around Phoenix and other Arizona cities are regulated under state law, much of rural Arizona is unregulated - allowing large corporate farms to use unlimited groundwater for crops.

One of those farms, owned by a Saudi company, has gotten increased scrutiny from state officials, including Arizona's new Democratic attorney general Kris Mayes.

Some rural areas of the state have passed groundwater regulations themselves or have successfully persuaded the Arizona Department of Water Resources to grant them some protections that stop unlimited water use.

Kathleen Ferris, a former state water official and one of the architects of Arizona's landmark 1980 groundwater management law, told CNN last year that groundwater is akin to a "savings account" for those who live in the desert.

Especially with a precarious situation on the Colorado River, "it's all the more important that we're conscious of using our groundwater," Ferris said.

This story has been updated with more information.