Water Push Back

Arizona’s homebuilding industry is pushing back against state regulators, arguing that new water rules could cripple housing development. The Home Builders Association of Central Arizona (HBACA), along with top legislative leaders, has filed a lawsuit against the Arizona Department of Water Resources (ADWR) over regulations they claim are unlawful and economically damaging.

The Legal Battle Over Water Policies

At the heart of the lawsuit is a dispute over ADWR’s Alternative Path to Designation of Assured Water Supply (ADAWS) rule. Homebuilders argue the policy places unfair restrictions on new developments while bypassing legislative authority.

• Unapproved water tax – A 33% surcharge added to new alternative water supplies
• Double regulation – Builders must already comply with the 100-year assured water supply requirement
• Unequal treatment – Only homebuilders are forced to offset water use, while commercial and rental developments are exempt
• Legislative overreach – ADWR is accused of making rules without proper legal backing
• Potential constitutional violation – Mandates that developers sacrifice rights for government approval
• Procedural missteps – Alleged failure to adhere to required rulemaking processes

The lawsuit aims to overturn the rule, arguing that ADWR is exceeding its regulatory authority and imposing unlawful financial burdens on homebuilders and future homeowners.

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Impact On Housing & Development

Industry leaders warn that this policy could worsen Arizona’s already strained housing market, making new homes even harder to afford. Instead of solving water concerns, they argue, the rule creates new economic barriers.

• Construction delays – Areas like Buckeye and Queen Creek may see a slowdown in new housing
• Rising costs – Arizona is already one of the least affordable states for homebuyers
• Wider economic effects – Development, jobs, and investments could suffer
• Lack of legislative input – Critics argue elected officials should have a say in such major policy changes

Developers emphasize that they already follow strict groundwater replenishment requirements. The added water tax, they say, unfairly singles out home construction while allowing other land users to operate without the same obligations.

What’s Next For Arizona’s Housing Market?

With the lawsuit now in motion, the future of ADWR’s rule hangs in the balance. If the court sides with homebuilders, the regulation could be overturned, preserving affordability for future homebuyers. If the rule remains, new development costs could surge, tightening an already competitive housing market.

The debate over water and growth in Arizona is far from over. The outcome of this case will play a major role in shaping the state’s future housing landscape.

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