Summary

Arizona is facing significant water issues due to drought conditions, prompting major cities to issue Stage 1 water alerts and implement drought management plans, while future commercial developments are also impacted by water scarcity concerns.

Abstract

Major cities in Arizona, including Phoenix, Tempe, Scottsdale, and Mesa, have declared Stage 1 water alerts and are enacting drought management plans in response to a Tier 1 shortage of the Colorado River supply. Residents are being encouraged to reduce water usage by 5%, with a focus on outdoor water conservation measures such as adjusting irrigation timers and converting to Arizona-friendly landscapes. The state's growth and commercial developments, such as the Superstition Vistas project, are being challenged by insufficient water supplies, as Arizona no longer permits projects that rely solely on groundwater. While some, like water research fellow Kathleen Ferris, question the sustainability of growth given current water resources, others, including Governor Doug Ducey, believe that with proper management and planning, Arizona can continue to grow while protecting its water assets.

Opinions

Kathleen Ferris, a senior water research fellow at Arizona State University, expresses skepticism about the ability to sustain the state's projected growth, especially in master-planned communities like Douglas Ranch, due to insufficient groundwater supplies.
Governor Doug Ducey and other proponents argue that Arizona's current water usage is lower than in 1957 and that prudent planning and management can support ongoing growth without compromising water resources.
The author of the Medium article, Mark Hake, suggests that the massive growth in Arizona, particularly in the Phoenix area, may be stunted if the water supply issue is not adequately addressed.
The article implies that the situation is serious enough that it could impact residential swimming pools with potential restrictions if the water shortage escalates to Stage 4.
The author also provides a referral link to join Medium, disclosing that they benefit financially from new memberships, while clarifying that the information provided is not personalized investment advice.

Arizona

Arizona Faces Water Issues In Its Growth

Stage 1 water alerts were recently issued by major AZ cities

The cities of Phoenix and Tempe, AZ declared a Stage 1 water alert and instituted drought management plans on June 1. They join Scottsdale, AZ, which had already declared a Stage 1 alert on January 11, and Mesa, AZ which did so on May 18.

Scottsdale asked its residents to start using 5% less water, including all residents, businesses, and visitors. Scottsdale said the state is now officially in Tier One of a Colorado River supply shortage.

In August 2021, the U.S. Secretary of the Interior declared the first-ever Tier 1 shortage for Colorado River operations. The shortage was to start in 2022 and involved a substantial cut to Arizona’s share of the Colorado River. So far residents have not felt the effect, as it impacts central Arizona agricultural users.

But now major cities in Arizona are moving to a Stage 1 alert and implementing drought management plans. For example, not too many people know that 70 percent of residential water is used outside. That means that implementing a reduction in water usage involves simple measures like:

adjusting water irrigation timers
convert to Arizona landscape from grass
use WaterSmart portals (Scottsdale) and amwua.org (Phoenix)

Stages two and three of the water plan could include stricter measures like restrictions on when residents can wash cars or water lawns. Tier 2 restrictions could potentially go into effect in August, according to 12News.com.

Stage four could trigger restrictions on residential swimming pools.

Water Holding Up Commercial Developments

Recently, water issues have started affecting commercial developments in the Phoenix area. A major project south of Apache Junction, AZ called Superstition Vistas has been recently held by AZ authorities.

This was to be a development that is larger than the city of Tuscon. It would house 900,000 people in thousands of homes in a series of master-planned communities.

But apparently, there isn’t enough water for all those people. According to 12News sources, the state of Arizona has refused to let any project go forward that relies solely on groundwater, and Superstition Vistas has no dedicated water source.

Moreover, according to Kathleen Ferris, a senior water research fellow at Arizona State University, over 1 million people are projected to move to over 2 dozen master-planned communities like the one being developed in Buckeye called Douglas Ranch. This community is being developed by the Howard Hughes Corporation (NYSE: HHC). The community says it will have enough water.

But Ms. Ferris was quoted by CNBC as saying, “there isn’t the water to sustain that growth. Not with groundwater.”

The massive growth in Arizona and the Phoenix area could end up being stunted if the supply of water issue is not addressed.

But others disagree. Governor Doug Ducey says that Arizona now uses less water than it did in 1957. He and other factions believe that proper management and prudent planning of water resources will allow water to be available for the state’s continuing growth.

If you want to read all my Medium stories and have access to all of Medium’s articles, click on this link to join Medium and become a member.

Join Medium with my referral link - Mark Hake

As a Medium member, a portion of your membership fee goes to writers you read, and you get full access to every story…

mrhake.medium.com

Full disclosure: shamelessly, as you might suspect, I refer you to Medium in order to share in your monthly or annual fee.

This is not financial advice and you should not rely on my analysis to buy or sell any stock, bond, REIT, crypto, home, or insurance product as I am not undertaking to induce you to buy or sell any securities or financial assets or home products.

I am relying on the “publisher’s exclusion” in the Investment Advisers Act of 1940 to provide this information without any personalized or individualized investment advice.