For decades, Arizona has been a national model for how to responsibly manage and develop water resources. As a result, our state has enjoyed years of economic growth while welcoming millions of new residents to live and work here. 

Then, Governor Katie Hobbs came along. 

In 2023, the Hobbs administration imposed sweeping new water rules that effectively halted new home construction across much of the Valley, under the guise that it was needed to “save water.” 

Now, a court has struck down the policy, ruling that state regulators ignored the law when creating the rules behind it. But the fallout from this disastrous decision is only beginning. And Arizona taxpayers could soon be forced to pay more than $1 billion for the damage. 

Arizona Is Not Running Out of Water 

Despite the alarmist rhetoric coming from Hobbs and the Arizona Department of Water Resources (ADWR), our state is not running out of water.  

In fact, our state uses less water today than it did in 1990—even though our population has doubled to more than 7 million residents. That’s not a typo. Over the past three decades, Arizona has welcomed millions of new residents while reducing total water consumption. 

How is that possible? Through better water management, technological advancements in conservation and reuse, and the gradual conversion of agricultural land to residential development. The result is a system that has allowed Arizona to grow responsibly while protecting its long-term water supply.  

But instead of building on this successful model, Hobbs declared a sweeping housing moratorium—halting new single-family housing construction across much of the Phoenix metropolitan area.  

A Manufactured Crisis With Real Consequences 

In addition to destroying billions in economic activity and further exacerbating the housing shortage crisis, Hobbs’ moratorium created a number of additional problems.  

Her rule did not halt development across the board. Instead, it targeted the construction of much-needed single-family homes while allowing all other forms of development—including apartments, condos, and data centers—to continue moving forward. 

This makes zero sense from a water policy standpoint. Prior to the Hobbs’ moratorium, single-family housing in Arizona was already required to demonstrate a 100-year assured water supply before construction can begin. Commercial and industrial has no such requirement, despite consuming substantially more water per acre than residential subdivisions.   

Even more absurdly, Hobbs’ moratorium blocked one of the very activities that actually reduces water consumption in Arizona: converting agricultural land into residential communities. 

In most cases, farmland uses significantly more water than single-family housing developments. When agricultural land is converted into neighborhoods, overall water usage can decline dramatically. Yet Hobbs’ moratorium stopped precisely the kind of development that lowers water use while creating a perverse incentive for landowners to pursue water-intensive commercial and industrial projects that bypass both the 100-year certification requirement and the moratorium.  

In effect, Hobbs figured out a way to implement a policy that will likely increase water usage in Arizona, not decrease it.  

Hobbs Loses in Court — Taxpayers Could Be on the Hook for More Than $1 Billion 

Last month, a Maricopa County Superior Court judge struck down the Hobbs administration’s housing moratorium, ruling that state officials failed to follow Arizona law when creating the new water rules. 

It’s another in a long line of embarrassments for Katie Hobbs. The court made clear that her administration attempted to impose sweeping new regulations without going through the legal process required under state law. 

But the consequences of her failed policy may not end there. 

Because Hobbs’ moratorium stopped or delayed major housing projects across the Valley, Arizona taxpayers could now be forced to compensate property owners harmed by the policy. Developers have already filed claims seeking hundreds of millions of dollars in compensation. And if additional lawsuits are filed, total taxpayer costs could exceed $1 billion. 

That’s right. At a time when Arizona families are already struggling with higher housing costs, inflation, and budget pressures, taxpayers may be forced to clean up another mess created by Katie Hobbs.  

This should serve as a warning to every person in our state.  

For decades, Arizona successfully balanced economic growth with responsible water management. But instead of trusting that proven system, the Hobbs administration chose fearmongering, unlawful regulations, and an anti-growth agenda that harmed homebuilders, squeezed working families, and may now leave taxpayers with a billion-dollar bill. 

Arizona voters cannot afford to forget it this November. 

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