Local Politics and Housing→ [Local Politics and Housing] & For more info on National Politics and Housing → [National Politics and Housing]

Written by: Renee Burke

Search

Search

Groundwater modeling is now one of the main “gatekeepers” for new subdivision approvals across the Phoenix metro. The 2023 Phoenix AMA model didn’t say “the Valley is out of water,” but it did say, very clearly, that new, groundwater‑only subdivisions on the fringes can’t just keep going like before.

Here’s how that works in practice and what it means for how and where new communities get approved.

---

What The Phoenix AMA Groundwater Model Actually Shows

In 2023, Arizona’s Department of Water Resources (ADWR) released a new groundwater model for the Phoenix Active Management Area (AMA), covering the Hassayampa and East and West Salt River Valley sub‑basins—that is, essentially the whole Valley.

Key findings:

• The model projects an “unmet demand”—a shortfall between what’s pumped and what’s physically available—of about 4–5% of total simulated groundwater demand over 100 years, roughly 4.86 million acre‑feet by around 2121–2123.
• In simple terms, it concludes that all physically available groundwater in the Phoenix AMA is already allocated to existing and previously approved uses.
• That means there is no additional groundwater “headroom” ADWR is willing to assign to new groundwater‑based subdivisions in the modeled area.

Importantly:

• The model does not impact subdivisions that already have a Certificate of Assured Water Supply (CAWS), or areas served by providers with a Designation of Assured Water Supply (DAWS), like the City of Phoenix.
• It does impact proposed subdivisions outside those service areas that would rely on local groundwater alone.

So the modeling is not a “whole‑Valley shutdown”—it’s a red line for new groundwater‑dependent projects in certain parts of the AMA.

---

How Groundwater Modeling Ties Into Subdivision Approvals

Under Arizona’s Assured Water Supply program, to plat a new subdivision in an AMA you must show a 100‑year water supply.

Groundwater modeling is the technical backbone of that test:

• For a CAWS based on groundwater, the model has to show:
  • The depth to water stays shallower than 1,000 feet over 100 years in Phoenix, and
  • The pumping does not create “unmet demand”—no model scenario where wells run dry before year 100.

The new Phoenix AMA model makes two crucial determinations:

1. Existing and already‑approved developments have claimed the available groundwater share.
2. Adding new groundwater‑reliant subdivisions on top of that would push the system into deeper drawdowns and unmet demand.

Because of that, ADWR has taken the position that it will no longer issue new CAWS based on AMA groundwater within the modeled sub‑basins, except for already‑approved projects or those tied to DAWS providers.

Practically, that means:

• If a proposed subdivision is inside the Phoenix AMA model area and outside the service area of a designated provider, and it wants to rely on local groundwater, it cannot pass the modeling test for physical availability.
• Without that, it cannot get a CAWS, and local jurisdictions cannot legally approve the plat as a standard subdivision.

Groundwater modeling has become the “no” behind many of the halted fringe projects you’ve seen in West Valley and other outlying growth areas.

---

Where Growth Is Constrained vs. Allowed

The model’s impact is very uneven across the Valley.

1. Core and designated‑provider areas
   • Cities like Phoenix and other AMWUA members rely on a mix of surface water, reclaimed water, and limited groundwater, and they hold DAWS designations.
   • The model does not prevent growth within these service areas, because their long‑term supply portfolios don’t depend on new groundwater allocations.
2. Fringe, groundwater‑dependent corridors
   • Newer outer‑edge communities that leaned heavily on local groundwater are where the model bites hardest.
   • Planned subdivisions that already have a CAWS can proceed; those without one now cannot qualify using AMA groundwater and must find alternative supplies.
3. Spatial nuance
   • The model still shows water physically present at depth across much of the AMA in 2121–2123, but not always within the code’s limits (water < 1,000 feet and no model “dry wells”).
   • Areas near the mountains and on the outer fringes are more likely to show problematic drawdowns; central portions maintain more comfortable depths.

So groundwater modeling is actively redirecting growth inward and toward renewable‑water service areas, while cooling or freezing pure groundwater plays on the periphery.

---

How Developers Are Forced To Respond

Because the model effectively says “no new groundwater‑only CAWS” in the Phoenix AMA model area, developers now have three broad choices in constrained zones:

1. Tie into a designated municipal provider
   • Work to annex or secure commitment from a city or utility with a DAWS and a diversified portfolio (surface + reclaimed + some groundwater).
   • This may involve infrastructure extensions, cost‑sharing, or changes in jurisdiction.
2. Secure new, non‑local or renewable water supplies
   • Acquire or lease surface‑water rights that can be delivered via existing canals.
   • Invest in groundwater recharge, exchanges, or regional partnerships that convert renewable water into recoverable credits.
   • In the longer term, participate in projects like advanced wastewater reuse or imported supplies.
3. Scale back or shift land use
   • Delay or cancel subdivision plans in areas where the water math is hardest.
   • Explore non‑subdivision uses that fall outside the strict CAWS framework (with their own risks and limitations).

Because those alternatives are expensive and slow, many “paper” subdivisions are now in a holding pattern until someone funds a viable water strategy beyond local groundwater.

---

What This Means For Buyers, Investors, And The Pattern Of Build‑Out

For Phoenix‑area buyers and investors, the new modeling changes the map of credible, near‑term supply:

• Inside city or DAWS service areas
  • Growth continues, subject to normal land, zoning, and infrastructure constraints.
  • The groundwater model reinforces confidence that these providers have planned for 100 years using mixed supplies, not just aquifer mining.
• In fringe, groundwater‑dependent zones
  • Expect more uncertainty: pauses, revised plans, and more cautious timelines.
  • Projects that already locked in CAWS are valuable; those without are more speculative, because their path to water is unresolved.
• Region‑wide
  • Growth doesn’t stop; it shifts—toward infill, toward infrastructure‑ready corridors, and toward areas with access to renewable surface water and reuse.
  • Over time, that can support values in “water‑favored” corridors, because the supply of new lots in constrained areas will be lower than once assumed.

In other words, groundwater modeling has moved from being a technical background exercise to a front‑end sorting mechanism: it decides which subdivisions can even get in line for approval and which have to go back to the drawing board.

---

A Warm Closing From Renee

If you’re watching Valley growth and seeing some communities race ahead while others stall at grading and signage, groundwater modeling is a big part of that story. It’s not that someone suddenly found “no water”—it’s that the state has drawn a line around how much groundwater can be promised to new subdivisions.

You don’t have to decode those maps and models by yourself. This is exactly the level I walk clients through: which areas are backed by diversified, designated supplies, which projects already have their 100‑year approvals, and where the water story is still a big open question.

If you’re thinking about making a move in Phoenix, you don’t have to figure it out alone. Reach out anytime, and we’ll look at specific communities together so you can choose a home or investment with a water story that feels solid not just for the next few years, but for the next generation.

Get the full Phoenix Market Insights → [Market Insights]