Surrounded by miles of creosote and ocotillo in the Sonoran Desert, state officials and business leaders gathered in October against the backdrop of the ragged peaks of the White Tank Mountains to applaud a plan to turn 37,000 acres of arid land west of Phoenix into the largest planned community ever proposed in Arizona.
The development, Teravalis, is expected to have 100,000 homes and 55 million square feet of commercial space. But to make it happen, the project’s developer, the Howard Hughes Corporation, will need to gain access to enough water for its projected 300,000 residents and 450,000 workers.
Teravalis is seen by local and state leaders as a crowning achievement in a booming real estate market, but it also represents the intensifying challenge in Arizona and other fast-growing Southwestern states: to build huge mixed-use projects in an era of water scarcity.
“You can’t grow and grow on these far-flung lands and put industries anywhere you want,” said Kathleen Ferris, former director of the Arizona Department of Water Resources and a senior research fellow at the Kyl Center for Water Policy at Arizona State University. “You have to be smarter about where and how we grow.”
Persistent dry conditions are driving up the cost of water and prompting more resistance to new development. But the scarcity of water is also pushing developers to innovate with design and install expensive infrastructure to save fresh water and recycle more wastewater.
A deep drought has settled on the Southwest since 2000, exacerbated by climate change. Water flow has dropped precipitously in the Colorado River and other surface water supplies that serve Arizona and its neighboring states. That is putting more pressure to supply homes and businesses from finite water reserves held in aquifers.
The consequences are being felt across the West. A proposal for a new water pipeline to supply St. George, Utah, has become the focus of public opposition. Communities in Colorado and Utah have declared moratoriums on new developments. And water supply is one reason that rural residents are fighting a proposal to increase the density of homes in Washoe County, Nev.
In Arizona, groundwater levels are falling so fast that thousands of residential wells all over the state are going dry. In 2021, the Arizona Department of Water Resources halted new-home construction in Pinal County, south of Phoenix, because groundwater pumping exceeded the supply.
In New Mexico, two proposals for big planned communities outside Albuquerque have languished because of concerns over water.