In the middle of a critical housing crisis, Gov. Katie Hobbs halted the construction of homes in large swaths of Arizona. She did so without legal authority, and based on a deeply inaccurate and flawed claim that Arizona is running out of groundwater. In a state where home affordability ranks among the worst in the country, her action is already having devastating consequences for Arizonans that will only get worse.

Before a subdivision can be approved, the state must issue a certificate showing proof of a 100-year water supply. Since 1980, home builders have proudly adhered to this longstanding policy that for generations has allowed our state’s population to grow while preserving our precious natural resources at the same time. That’s how our state manages to use the same amount of water with 7.5 million residents today as it did 70 years ago when we had fewer than 1.5 million residents. 

Citing what the state has called an “unmet demand,” the Hobbs administration now refuses to issue permits for home construction in areas that rely on groundwater for their main water supply. The administration took this drastic action outside of the normal regulatory process in violation of state law, placing an undue burden on both the home building industry and hard-working Arizonans desperate for more affordable housing. It’s one of the most significant bureaucratic overreaches in the history of our state, and it’s why the Goldwater Institute sued the Hobbs administration on behalf of the Home Builders Association of Central Arizona, to protect our state’s ability to conserve its precious natural resources and grow economically for the future.

The Hobbs administration’s Phoenix Active Management Area (AMA) Groundwater Model attempts to show where future development can and cannot occur. Importantly, it shuts down home building in the fastest growing, most affordable areas within the Phoenix market. The lawsuit we’ve filed challenges the lack of a rulemaking process behind the Hobbs administration’s water model, which was completed without following any of the legally required rulemaking procedures that exist to give citizens and regulated businesses the opportunity to comment on proposed rules. This robbed the people of Arizona of any opportunity to evaluate and publicly comment on the assumptions which form the basis for the model. 

Moreover, the Arizona Department of Water Resources’ concept of “unmet demand” is a term created by the agency that appears nowhere in statute or regulation. It moves the goalposts that previously required applicants to demonstrate “sufficient groundwater for the proposed subdivision.” Without legal authority, the Hobbs administration upended the statutorily mandated process, creating rules that hurt hard-working Arizonans’ ability to buy a home and leaving billions of dollars of stranded investment. 

Arizona law makes clear that these sorts of decisions cannot be made by a bureaucrat with the stroke of a pen. Instead, our elected state lawmakers should properly determine Arizona’s water policy. 

In Arizona, water use regulations are not evenly applied across residential and commercial development. There is a fundamental difference between groundwater used for residential developments and groundwater used by commercial, industrial, or rental buildings. 

For nearly 30 years, home builders have been protecting our groundwater tables by replenishing pumped groundwater. No other industry has put water back into our aquifers to replace the water that is pumped out to the extent of home builders. This sustainable practice ensures a steady supply of affordable homes for Arizona’s hard-working families and protects our groundwater aquifers. The application of the “unmet demand” rule results in home builders being unfairly targeted while other industries are able to mine groundwater without restriction or without having to offset their pumping. 

An illegal halting of the construction of all homes in large swaths of the state is not the answer. Arizona was recently ranked as the ninth-least-affordable state to buy a house in the United States. Buckeye and Queen Creek are two large developments that represent the only affordable communities for many in the greater Phoenix area. Over the last year, median home prices in Queen Creek have risen more than twice as fast as Phoenix, and in Buckeye, they have grown more than three times as fast. Without appropriate action, our housing market will become untenable, reaching a breaking point where a working-class family’s dream of buying a home is no longer attainable. 

The governor and her state agency have acted unlawfully to prevent affordable housing from being built in Arizona. We have an obligation to ensure our water supply is protected, but also a desire to make Arizona the best state to live, work, and raise a family. Governor Hobbs should immediately rescind the unlawful rules that have led to this predicament and ensure that Arizona continues to be a leader on this critical issue.  

Jon Riches is vice president for litigation at the Goldwater Institute. .

Jackson Moll is CEO of the Home Builders Association of Central Arizona.