Under Arizona law, a developer building in an active management area must obtain a certificate of assured water supply — a state finding that the development has access to enough water to last one hundred years. It is one of the strictest such requirements in the country, and Phoenix has issued certificates covering roughly 40,000 new homes since 2022.
The city’s own water resources plan, published last year, models sufficient supply for approximately 12,000 of them under the drought scenario the state hydrologist now considers most likely.
The discrepancy is not a secret and it is not a scandal. It is an artefact of two documents written for different purposes on different assumptions. The certificates rest on a groundwater model last comprehensively revised in 2019, before the Colorado River shortage declarations. The water resources plan uses post-declaration hydrology.
What makes it consequential is that the certificates are not revocable. Once issued, they attach to the land. A developer who obtained one in 2022 and has not yet broken ground retains the right to build, and the city retains the obligation to serve.
State legislators have introduced three bills in as many sessions that would allow retrospective review of certificates issued under superseded models. All three died in committee. The homebuilders’ association opposed each of them on the grounds that retroactive revocation would make Arizona land unfinanceable, which is true, and which is also the point.
The practical resolution, according to two people in the city water department who were not authorised to speak publicly, is that the shortfall gets managed rather than solved: allocation cuts to agriculture, accelerated reclamation, and the purchase of tribal water rights at prices that have tripled since 2021.