The Goldwater Institute is suing the Arizona Department of Water Resources (ADWR), claiming new water policies are illegal and worsening Arizona’s housing shortage by stopping new developments in cities like Buckeye, Queen Creek, and Goodyear.
The lawsuit, filed Jan. 22 in Maricopa County Superior Court, argues that ADWR created two new rules without public input or approval from lawmakers. The rules require developers in groundwater Active Management Areas (AMAs) to prove a 100-year water supply for the entire AMA; not just for the specific site where they want to build. Developers say the policy is unfair, difficult to meet, and not supported by state law.
In 2023, Gov. Katie Hobbs’ office announced a water study showing the Phoenix AMA could face a 4% groundwater shortage over the next 100 years. Based on that study, ADWR stopped approving new water supply certificates for projects relying solely on groundwater. Without these certificates, developers can’t proceed with new housing projects, which they say has caused financial losses and deepened Arizona’s housing crisis.
“This new rule is devastating for housing affordability,” said Jackson Moll, CEO of the Home Builders Association of Central Arizona. “We’re fighting to protect Arizona’s ability to grow and to ensure decisions like this are made openly and legally.”
Christian Slater, a spokesperson for Hobbs, called the lawsuit a “shameless and partisan attack by bad actor developers to get a short-term profit while they pump the water out from under Arizona families and farmers," in a statement to the Arizona Mirror.
He said that the Goldwater Institute’s claims are “disingenuous,” pointing out that they did not challenge similar policies under Republican Gov. Doug Ducey’s administration when unmet demand was found in the Pinal County AMA.
“They didn’t, because they are nothing more than partisan operatives working for the bad actor developers on their board,” Slater said.
ADWR Director Thomas Buschatzke defended the agency’s process for reviewing water supply applications, maintaining that it follows state law.
The lawsuit seeks to block ADWR’s new rules permanently, arguing they harm developers who relied on the previous system and fail to meet legal requirements for rulemaking.
