Navigating Water Shortages: The Impact on Home Builders in the East Valley


As Colorado River water shortages continue to make headlines, concerns arise about the potential impact on various sectors, including the burgeoning home-building industry in the East Valley. The recent announcement by Governor Hobbs ordering a halt to new home developments reliant solely on groundwater has ignited discussions about the future of housing growth in the region. However, experts suggest that while challenges lie ahead, the situation might not be as dire as initially feared.

A Shift in Water Rules and its Local Implications

On June 1, Governor Hobbs declared a stop to approving new residential projects solely dependent on groundwater. This decision was primarily aimed at addressing water shortages and ensuring long-term water sustainability across the state. While this announcement did trigger concerns, it’s important to note that its immediate impact is expected to be felt more acutely in certain communities such as Buckeye and Queen Creek, where groundwater usage is more prevalent.

Mesa Councilmember Scott Somers reassured residents, stating, “I don’t anticipate the Governor’s order to affect projects in Mesa. Mesa has a 100-Year Assured Water Supply designation from the Arizona Department of Water Resources. This designation means that Mesa has shown continuous, physical, and legal availability of water along with water quality and financial capability standards to maintain water supplies.”

Despite initial fears, this sentiment is echoed by experts who suggest that while adjustments are necessary, a complete halt in housing development is unlikely.

While communities like Buckeye and Queen Creek are currently hotspots for home building due to their affordable land prices, experts believe that the broader impact on metro Phoenix’s housing shortage may be less pronounced than initially anticipated.

A recent study by the Kyl Center for Water Policy at ASU delves into the relationship between water limits and the Valley’s affordable housing problem. The study suggests that the new water rules may lead to increased housing costs in areas like Buckeye and Queen Creek, where designated water providers are lacking. Queen Creek has made strides recently, however, receiving its first delivery of water it secured from Cibola valley after a five year process. Through that agreement, they will receive 2,033 acre feet of water a year in perpetuity.

Despite the challenges, there are several avenues to facilitate sustainable growth without exacerbating the water shortage. Existing developments holding a Certificate of Assured Water Supply can continue to build new homes.

Builders Pressing On in the East Valley

Moreover, the Arizona State Land Department holds the potential to expedite land sales for housing development. With over half a million acres of state land available for non-commercial development in the Valley, this represents a significant opportunity to ease the housing shortage. In June, local builder Blandford Homes won an auction to secure 115 acres of State Trust land on the northwest corner of Hawes and Warner Roads.

Blandford Homes was the only bidder in the June 28 auction, where they purchased the 115 acre parcel for the minimum bid of $37.85 million.

Blandford plans to build over 400 homes on the parcel, which will complement the 4,500 residential units of various types planned (with building currently underway) for the Hawes Crossing mixed-use development in the former dairy areas near Elliot and the 202.

Building is also continuing in Pinal County on Elliot just east of Meridian as the massive Superstition Vistas development is just at the beginning of a decades-long buildout.

As discussions continue on how to strike a balance between growth and water sustainability, it is evident that the East Valley’s home-building sector is poised for change. The water restrictions imposed by Arizona’s water agency will undoubtedly shape the landscape of future developments. While initial concerns arose about the potential halt of growth, experts and officials emphasize that Phoenix’s housing market will continue to evolve, adapting to both water challenges and the need for more affordable housing options.

Communities have been working together in the East Valley to provide forward thinking solutions along with ongoing dialogues surrounding potential adjustments to water rules to navigate the intricate intersection of growth and sustainability.

As Mesa Councilmember Scott Somers aptly puts it, “With projects like the Central Mesa Reuse Pipeline Project, the city continues to be proactive with projects to ensure a reliable source of water for residents and business.” The path forward may be challenging, but it holds the promise of a more resilient and thriving East Valley community.