Governor’s panel moves to close water loopholes

A subcommittee of the Governor’s Water Policy Council on Aug. 15 addressed wildcat subdivisions, grandfathered water rights and build-to-rent communities.

Former House Speaker, Rusty Bowers, who is now an EPCOR representative, said the Assured Water Supply Committee considers issues that aggravate the larger water issues Arizona faces.

The subcommittee took no action.

Build-To-Rent

The first and simplest issue to be addressed is building homes to rent rather than sell, which means the rentals don’t have to secure certificates of assured water supply from the Arizona Department of Water Resources like homes for sale do.

On Aug. 16, Spencer Kamps, a lobbyist for the Home Builders Association for Central Arizona, said: “A new product has arisen in the last five or six years roughly, called build-to-rent, or BTR, and it looks like a traditional for-sale subdivision … that has generated concern. But for all intents and purposes that product is no different than a four-story traditional apartment complex.”

If a homebuilder secures a certificate of assured water supply, then it must replenish the groundwater it’s using for the homeowners.

The committee is considering putting BTR projects into the assured water supply program, so they’d go through the same process.

Committee member Rep. Gail Griffin, R-Hereford, ran a bill this year that would have required groundwater for BTR developments to be replenished by the Central Arizona Project, but the bill was killed by Senate Democrats and Sen. Justine Wadsack, R-Tucson. Wadsack had an alternative proposal, but it was transformed into another law.

Griffin did not respond to a request for comment.

Sen. Priya Sundareshan, D-Tucson, said that Democrats opposed the bill because it wouldn’t require BTR developments to have assured water certificates like other properties, and would put the onus on CAP to replenish the water – not the property owners.

Wildcat Subdivisions

In Arizona, land parcels subdivided into six or more lots must provide reports that include assured water supply, but that doesn’t always happen – and smaller subdivisions don’t have to provide similar assurances.

It’s something the committee wants to change.

Illegal lot splitting in itself is difficult to address, according to representatives from the Arizona Department of Water Resources. In fact, they say it’s hard to know how many illegal lot splits there already are.

To win an illegal subdivision lawsuit, plaintiffs must prove that the defendants were “acting in concert” to violate the law, which is hard to prove. No one has successfully taken a case like that to court and won in more than 20 years. The department wants that statute, and some other loophole-prone language altered.

The department also said that the timing of the violations is an issue. The illegal splits can’t be addressed until the properties are already up for lease or sale.

Going further, Sundareshan said that lots subdivided into fewer than six lots are still too big to be exempted from having to prove they will get water. She wants that number to be more like zero.

Grandfathered Rights

Natalie Mast, the water resources department’s active management area director for management plans, presented details to the committee about a third and final issue: grandfathered water rights that allow people to use groundwater in regulated active management areas if they had a right to it historically.

Arizona has three types of grandfathered water rights.

One type of right is in an AMA where a landowner has land that was initially entitled to be irrigated with groundwater and retired the land from irrigation – but still has the right to withdraw groundwater under certain conditions.

Another kind is a landowner using water for a non-irrigation purpose.

The last designation is a person who has the right to use groundwater for irrigation.

Some of the grandfathered rights are specifically tied to a piece of land, while others are more flexible, meaning owners can lease part of the water to another place in the AMA.

The committee is considering purchasing and retiring some of those grandfathered water rights to protect groundwater supplies. The department wouldn’t be buying land, just retire the grandfathered water rights.

The plan is in the early discussion stages. It’s also undecided between members what kind of grandfathered rights would be retired, if not some combination of all three.

Though committee members agreed that these three issues must be addressed, they haven’t decided how to fix them yet.

With Democratic Gov. Katie Hobbs at the helm, policy solutions the council recommends will likely need bipartisan support to get signed.

This was the council’s third meeting, and there will be another next month. Policy solutions will be hashed out relatively fast.

“I think the desire to have a comprehensive package by the end of this year is good. I like the condensed timeframe,” Kamps said.