The Arizona Department of Water Resources has started developing its own version of a program that would allow farmers to sell agricultural land to developers who can convert the land for housing projects.

The Department of Water Resources is embarking on an informal stakeholder process for its “Ag-to-Urban” program. This program will allow new homes to be built in areas with a lack of housing and a shortage of groundwater.

The idea has built momentum in the past couple of years because single family homes use less water than agricultural land. Supporters view the concept as a way to increase the housing supply, lower home prices and preserve groundwater.

There are a couple of twin bills passing through the Senate and House, SB1611 and HB2298, that would also allow farmers to sell their land for development. The department’s program would be enacted through a rulemaking process instead of a bill introduced by legislators.

The legislative and Department of Water Resources’ proposals target Active Management Areas in the Phoenix and Pinal county areas. The legislative bills would also include the Tucson AMA.

The department recently released a draft proposal of its program during a stakeholder meeting.

“I think we’re at a place where we’re wanting to make sure we get the policy right,” said Natalie Mast, active management areas director at the department. “So we’re going to make sure that we have the discussions we need to have to get the details here right, because it’s really critical that we end up with something that works at the end of the day.”

The department’s program would ensure that new water uses on retired agricultural lands would be served by designated water providers, require a series of conservation measures and include a 10-year sunset review.

The agency’s ability to issue physical availability conservation credits would expire after 10 years, but there would be an option to extend. In addition, each acre of land would need to meet an eligibility test that includes a model review of the irrigation grandfathered right, which allows owners to irrigate land in an AMA.

There are 28,500 acres of eligible farmland in the Phoenix AMA and 104,600 in the Pinal AMA that could use the Ag-to-Urban program. The current densities would allow for 3.9 housing units per acre for the Phoenix AMA and 3.1 units for Pinal, according to the department.

Under the Senate bill introduced by Sen. T.J. Shope, R-Coolidge, there are 425,232 acres of farmland in the Phoenix, Pinal and Tucson Active Management Areas that would be eligible for the program. If half of the farmland is converted for development, more than a million homes could be built since new developments average five homes per acre, according to numbers previously shared by Republican Senate staff.

Shope’s bill lays out stipulations for replenishment and groundwater use for the three AMAs covered in the legislation but don’t include the requirements for conservation measures or designated water providers.

His bill was still awaiting a hearing in the Senate Committee of the Whole, while the House bill, sponsored by Rep. Gail Griffin, R-Hereford, passed the House Committee of the Whole and was waiting for a final vote in the House.

“We’re kind of in that unique situation where there’s a House bill that exists and a Senate bill that exists,” he said. “That timeline…it’s blurred.”

Shope said he’s still negotiating details of the bill and some features of the department’s proposal could be included in the discussions. He is looking to reach a consensus with a wide variety of stakeholders before potentially marrying the House and Senate bills, and doesn’t want to rush the process before potentially sending legislation to the governor’s desk.

“This isn’t a 100-meter dash – it’s a marathon,” he said.