Arizona judge sides with homebuilders in dispute over state groundwater supply requirements

Arizona homebuilders recently scored a legal win in their lawsuit over state groundwater requirements, paving the way for new development to move forward in two Phoenix suburbs.

A Maricopa County Superior Court judge last month ruled in favor of the Home Builders Association of Central Arizona in its lawsuit against the Arizona Department of Water Resources.

The judge ruled that the ADWR failed to comply with the Administrative Procedure Act rulemaking process when changing the groundwater criteria it uses to review homebuilding applications.

ADWR Director Tom Buschatzke told KTAR News 92.3 FM he plans to appeal the ruling.

“We have to look at all of the demands on that groundwater. … Not just homebuilding demand,” Buschatzke said.

Why did homebuilders sue state over groundwater requirements?

At issue, HBACA developers had to obtain a certificate to show the water supply in Buckeye met the state’s 100-year requirement for new homes.

While the ADWR found enough groundwater physically available in the site of the proposed subdivision, it determined the development would draw down the aquifer below minimum required levels in other parts of the Phoenix Active Management Area, or AMA.

Buschatzke disagreed with the judge’s determination that the AWDR’s use of AMA-wide criteria known as the Unmet Demand Rule and the Depth-to Water Rule was a rule change.

And he defended the ADWR position by explaining that the groundwater in the Phoenix AMA is interconnected.

“If you pump it out in one place, it could draw down the aquifer level in another place, even pretty far away in terms of geography,” Buschatzke said.

ADWR rules shut down home construction in Buckeye, Queen Creek

New home projects have been on hold in Buckeye and Queen Creek since the AWDR invoked the AMA-wide criteria in 2024. The HBACA filed its lawsuit, with representation from the Goldwater Institute, in January 2025.

“The rule literally shut down new home construction exactly where we need it and drastically compounded the affordable housing crisis in Arizona,” Jon Riches, vice president of litigation for the Goldwater Institute, told KTAR News.

The ruling is not about water policy, rather the limits of agency power and who should make these decisions, Riches said.

He argued the law only requires a 100-year assured water supply at the development site, not the entire aquifer.

Buschatzke said he wants to protect existing homeowners in other parts of the Valley, noting that property values are tied to available water supply.

“We’re improving all the time and … making sure that the protection that people expect for their water supply is really there,” Buschatzke said.

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