by Staff Reporter | Apr 26, 2026 | News
By Staff Reporter |
The housing moratorium crippling new construction in the Valley imposed by Gov. Katie Hobbs’ administration may not go on for much longer.
The Maricopa County Superior Court struck down the moratorium on Tuesday in Home Builders Association of Central Arizona v. Arizona Department of Water Resources, et al.
Under Hobbs, the Arizona Department of Water Resources (ADWR) issued new groundwater regulations rolled out in November 2024 dubbed the “Unmet Demand Rule” and the “Depth-to Water Rule.”
Per the court, these rules went impermissibly beyond the longstanding obligation for builders outlined in Arizona law, which required assurance of sufficient groundwater supply in order for each development to take place (100 years’ worth).
ADWR imposed the rules based on a groundwater model claiming that unmet demand and exceedance of the 1,000-foot depth-to-water limit existed throughout Phoenix. In other words, their regulations meant a developer seeking a certificate for one subdivision had to answer not just for their development area, but for the water status of the entire Valley. This resulted in ADWR’s indefinite suspension on granting certificates to any developers.
The consequence of these regulations brought new home construction to a halt throughout Maricopa County. The Home Builders Association of Central Arizona (HBACA), a trade association for the residential construction and development industry, challenged ADWR’s authority to impose new rules.
ADWR attempted to style the Unmet Demand Rule as a new implementation of an old rule, but the Maricopa Superior Court Judge Scott Blaney rejected that view as an undoing of the necessary limitations of administrative agency powers.
“‘To permit this would neuter all statutory limits on agency rule-making[,]’” stated Blaney in his ruling, quoting HBACA’s argument.
Blaney also found that ADWR didn’t follow state law on agency rulemaking under the Administrative Procedures Act. Blaney invalidated both rules.
“ADWR acted unlawfully by implementing two agency rules without first complying with the mandatory provisions of the APA[,]” wrote Blaney.
The Arizona Free Enterprise Club (AFEC) called the court ruling a win and criticized ADWR’s model justifying the overturned regulations as flawed.
“The Maricopa County Superior Court has struck down the Hobbs Administration’s attempt to impose a sweeping housing moratorium based on its flawed water model — a stinging loss for Katie Hobbs and a ruling that the state failed to follow proper legal procedures,” stated AFEC. “This is a major victory for transparency, accountability, and Arizona homeowners.”
Jonathan Riches, vice president for litigation and general counsel for the Goldwater Institute, represented the Home Builders Association of Central Arizona. Goldwater Institute’s vice president for legal affairs, Timothy Sandefur, hailed the ruling as a necessary check on an administrative state attempting to impose greater burdens than that which the law requires.
“The case is also a reminder of the dangerous power that the pervasive ‘administrative state’ wields over our daily lives — as unelected and unaccountable bureaucracies exert authority over every detail of construction, business, and property ownership, to cite just a few examples,” said Sandefur. “The only solution to the arbitrariness and lawlessness of these agencies is to rein in their power — and for courts to ensure that they obey the law.”
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by Matthew Holloway | Apr 23, 2026 | News
By Matthew Holloway |
Maricopa County Superior Court Judge Scott Blaney ruled Tuesday that the Arizona Department of Water Resources (ADWR) did not comply with state law when implementing a policy that restricted residential development in parts of Maricopa County.
In the order, the court found the agency “did not comply” with Arizona law in adopting the challenged requirements and declared the policy invalid.
The policy, commonly referred to as the “Unmet Demand” approach, was used by ADWR in evaluating whether proposed developments could meet the state’s requirement to demonstrate a 100-year assured water supply in the Phoenix Active Management Area.
Arizona law requires developers in designated areas to obtain a certificate of assured water supply demonstrating access to sufficient groundwater or other supplies for 100 years before construction can proceed.
According to the lawsuit, ADWR’s application of an “Unmet Demand” standard required consideration of projected groundwater demand across the broader management area rather than focusing on the water supply available to an individual development.
The court rejected the agency’s justification for the policy, stating that its interpretation of the law “lacks merit.”
The case was filed in January 2025 by the Goldwater Institute on behalf of the Home Builders Association of Central Arizona, challenging the policy’s legality under state administrative procedures.
In a statement following the ruling, Goldwater Institute Vice President for Legal Affairs Timothy Sandefur said the court’s decision invalidated the agency’s approach to regulating development under the policy.
He explained, “The reality is that although Phoenix is a desert, there’s plenty of water to serve the needs of development. Yet the ‘Unmet Demand Rule’ transformed overnight how home building could work in Maricopa County—restricting construction at a time in which the limited supplies of residences have caused housing prices to soar. And that was illegal, because the Department had no power to adopt the ‘Unmet Demand Rule’ in the first place.”
He added, “State law sets forth a process for creating new rules, and the Department didn’t bother trying to comply with those processes. Instead, it claimed that it had simply discovered somehow that this was what the law required all along.”
The challenged policy had affected development planning in portions of the Phoenix metropolitan area, including Buckeye and Queen Creek, where groundwater availability determinations are required for new subdivisions, according to court filings and statements in the case.
Sandefur called the ruling “a crucial victory for Arizonans, not just in Phoenix but throughout the state, who might well have been on the Department’s target list had it been allowed to get away with redefining the rules in this way.”
He added, “The case is also a reminder of the dangerous power that the pervasive ‘administrative state’ wields over our daily lives—as unelected and unaccountable bureaucracies exert authority over every detail of construction, business, and property ownership, to cite just a few examples. The only solution to the arbitrariness and lawlessness of these agencies is to rein in their power—and for courts to ensure that they obey the law.”
The court’s ruling focused on whether ADWR followed the procedures required under Arizona law to implement new regulatory requirements. The order concluded that the agency did not follow those procedures in adopting the “Unmet Demand Rule” approach.
In a statement to Capitol Media, a Department of Water Resources spokesman said the agency intends to appeal Judge Blaney’s ruling, stating, “Although there is no final judgment yet, the Arizona Department of Water Resources intends to challenge the decision once it is final.”
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
by Matthew Holloway | Feb 20, 2026 | News
By Matthew Holloway |
Attorneys with the Goldwater Institute are scheduled to appear in Maricopa County Superior Court at 10 a.m. Friday for a hearing in their lawsuit challenging water policy changes implemented by the administration of Katie Hobbs.
The case, filed in January 2025 on behalf of the Home Builders Association of Central Arizona, contests new requirements adopted by the Arizona Department of Water Resources (ADWR) affecting groundwater supply determinations in parts of Maricopa County.
The Goldwater Institute said the policy changes have halted approvals for new housing developments in certain areas of the Phoenix metropolitan region, including portions of Queen Creek and Buckeye.
Under Arizona law, homebuilders in designated Active Management Areas must obtain a certificate demonstrating a 100-year assured water supply before beginning construction.
Goldwater’s lawsuit challenges a policy change announced by ADWR in November 2024. It contends that the department adopted a new framework based on what it describes as “unmet demand,” which it says is not referenced in Arizona statute.
Goldwater penned a letter to the ADWR one month later, urging the agency to reconsider its “AMA Wide Unmet Demand Rule,” asserting that the new rule was in violation of the law, having been imposed without legislative approval or via the required rulemaking process.
ADWR has defended its authority to interpret and apply groundwater modeling within the state’s assured water supply program. The department has not publicly characterized the policy as a formal rulemaking.
The Maricopa County Superior Court previously denied ADWR’s motion to dismiss the case, allowing the lawsuit to proceed.
During Friday’s hearing, attorneys for Goldwater are expected to ask Judge Scott Blaney to enter judgment in favor of the Home Builders Association of Central Arizona.
The case is being heard at the Maricopa County Superior Court, East Building, located at 101 W. Jefferson Street in Phoenix.
In a statement, Goldwater Institute Vice President for Litigation Jon Riches said: “Decisions on vital statewide concerns like the availability of affordable housing and the responsible stewardship of our natural resources should be made through a transparent, democratic process—not imposed by executive fiat.”
Additional information about the case is available on the Goldwater Institute’s website. No ruling is expected at the time of the hearing.
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
by Alexander Kolodin | Jan 19, 2026 | Opinion
By Alexander Kolodin |
From harvesting timber in national forests to grazing cattle on the open range, our nation has faced many tragedies of the commons over the years. Whether hunting big game in the wild or extracting oil and gas from underground reservoirs, each example presented our leaders with the same, fundamental issue: if nobody owns it, everyone will overuse it.
For rural Arizona, groundwater is no different. As explained in Part 2, Arizona’s groundwater challenges are a tragedy of the commons, stemming from the fact that groundwater is a finite resource with multiple landowners on the surface, any one of whom can tap into the common supply.
How we approach this tragedy moving forward will determine not only the health of the aquifers but also the future of our rural communities. While some proposals have been offered to date, none have been sufficient to earn legislative support, and most have been wrong for our state.
To get it right, we must consider the approaches that have been taken in other contexts to see which have worked and which have not, allowing us to determine which could be the best fit for groundwater.
There are generally two approaches
According to Dr. Stephen Hicks—professor at Rockford University, critic of socialism, and supporter of individual rights—every solution for the tragedy of the commons falls into one of two categories: a socialist approach and a property-based approach.
The socialist approach views self-interest as the problem. It seeks to control human behavior through mandates, permits, and fees. Whether renewable energy standards for climate, catch limits for fisheries, or sustained yield mandates for national forests, all prioritize resource preservation through government control—maintaining communal ownership and regulating beneficial use through bureaucrats who decide who can use what, when, and how much.
The property-based approach, on the other hand, views communal ownership as the problem. It seeks to eliminate the tragedy by establishing private property rights to the resource, allocating individual shares and allowing users to manage and conserve their own supplies, limited only by the fundamental principles of private property rights, such as the “no harm” principle and “right to exclude.”
Mining claims have operated on “first in time, first in right,” and grazing allotments grant exclusive rights to leaseholders, thereby reducing conflicts among users and making individuals responsible for their own supplies.
To address rural groundwater, Arizona leaders must decide which of these approaches they will take.
Socialist options don’t work
Quod nullius est, est domini regis. It means: “What is the property of no one, belongs to the king.”
In 1976, after the Arizona Supreme Court declared groundwater a public resource, the Court said: “The legislature has the authority to determine which groundwater uses are most important to the general welfare and to allocate the state’s groundwater resources accordingly.”
This statement illustrates the truth about communal ownership: if no one owns the resource, then the government has absolute authority to act as king over its use. This is why the Arizona Department of Water Resources frequently reminds landowners that their right to use water is only “usufruct” to the land they own: meaning they don’t own the groundwater itself, the state does.
Like wild animals in Old England, communal resources belonged to the Crown—hunters could only hunt when, where, and how the king said they could. Those systems, like today’s socialist groundwater regimes, treat resources as communal property controlled by government fiat.
Such approaches typically fail because they lead to higher scarcity, higher prices, and worse outcomes for the resource itself. The federal government’s centralized control over national forests, for example, has produced catastrophic wildfires, endangered protected species, and restricted affordable timber.
In Arizona, the infamous “management area” is the hallmark socialist approach to groundwater— including 1948 “Critical Management Areas” and 1980 “Active Management Areas.”
According to Dean E. Peterson and Larry L. Deason in Arizona’s Groundwater Problem & Proposed Legislation, the 1948 Critical Management Areas “did not adopt any of the basic principles of water law,” but rather were an “exercise of the general police power of the state” through centralized restrictions.
In 1980, Arizona doubled down on its socialist approach with the Groundwater Management Act, establishing “Active Management Areas” that centralized control into the Arizona Department of Water Resources. This gave the agency near-absolute power over groundwater in AMAs, allowing its director to effectively act as king over the common supply.
In both cases, users rushed to drill before grandfathering deadlines, and corporate and municipal users entrenched their historical pumping, distorting market incentives. After 40 years, the 1980 Act has failed to achieve “safe yield” in most AMAs.
Despite their clear failures, proponents today continue to argue that Arizona should “finish what was started” with the 1948 and 1980 groundwater acts by expanding socialist-style control statewide through “Rural Groundwater Management Areas” and “Local Groundwater Stewardship Areas.”
These proposals must be rejected, as they would only impose new bureaucracies, tax personal groundwater withdrawals, and mandate volumetric reductions while maintaining the same communal ownership model that led to the tragedy in the first place.
Property-based solutions are best
Meum et tuum. It means: “What’s mine is mine, and what’s yours is yours.”
According to John Locke in his Second Treatise on Government, the role of government is not to seek to control human behavior, but rather to protect private property by using the limited power of government to quantify and secure individual rights, prevent takings, support transferability, and uphold the “no harm” principle and biblical golden rule between and among property owners.
Rather than mandating conservation through coercion, property-based systems embrace human nature and seek to harness the power of self-interest to guide the invisible hand toward voluntary conservation.
History has proven that this approach works. When socialist mandates in American fisheries led to overfishing, policymakers switched to property-based catch shares and individual transferable quotas, which restored fish populations.
When hunters arrived in the New World, they rejected the Old English system and adopted the North American Model of Wildlife Conservation, which includes transferable hunting permits, helping to maintain healthy wildlife populations while providing a fair system of access.
Even “adopt a highway” programs harness self-interest to address trash and litter on public highways, granting exclusive naming and advertising rights to private parties in exchange for maintenance.
Overall, individual ownership protects scarce resources better than bureaucratic control because direct ownership creases individual responsibility. Where individuals are given ownership and responsibility, conservation increases because what belongs to someone is protected by someone.
Arizona needs correlative rights
To solve Arizona’s groundwater tragedy, we must remove it from communal ownership and apply a property-based approach. One solution designed specifically for finite underground resources like groundwater is “correlative rights.”
Derived from oil and gas law in resource-rich states like Texas, Oklahoma, and Nebraska, correlative rights allocate proportional shares of the resource to adjoining landowners on the surface, based on the amount of land they own. If a person owns five percent of the surface, then they own five percent of the oil and gas below, plain and simple. This is consistent with the ad coelum doctrine described in Part 1.
In many of these resource-rich states, policymakers have already adopted correlative rights for groundwater. In Texas, for example, the Edwards Aquifer Authority uses correlative rights to allocate groundwater. In Nebraska, natural resource districts administer correlative rights.
Because allocations are treated as real property, users are free to trade their shares among themselves within the same basin—allowing market forces, rather than government bureaucracy, to dictate the most efficient use of limited resources.
This is why correlative rights have been such an effective way to prevent the tragedy of the commons in finite underground resources to date. As a proven, property-based framework rooted in America’s traditional values, correlative rights are the right approach for Arizona.
It’s time to restore private property rights to groundwater
When the Arizona Supreme Court enshrined “communal ownership” into law, it likened groundwater to a wild animal, saying it was “free to roam as [it] please[d]” and the “property of no one” until “captured.”
In so doing, it wrongfully embraced the Old English model that Americans rejected and failed to follow the American path that utilizes private property rights to advance the public good. This must be undone.
To address the tragedy of the commons in Arizona, we must recognize the harms of communal ownership and reject the socialist schemes that seek to maintain it. Only by restoring private property rights to groundwater through the adoption of correlative rights can Arizona finally address the tragedy and allow landowners to protect and conserve the supplies beneath their feet.
It’s time that Arizona leaders consider a new approach to groundwater supplies. As Arizona Justice Duke Cameron wrote in 1976: “The time has come to consider again the doctrine of correlative rights.”
Alexander Kolodin serves Legislative District 3 in the Arizona State House and has been practicing election law in Arizona for over a decade. He is currently running to be Arizona’s next Secretary of State.
by Matthew Holloway | May 6, 2025 | News
By Matthew Holloway |
The Goldwater Institute recently sent an email that its lawsuit announced in January against the Hobbs administration is moving forward.
In the email, Goldwater highlighted the potential impact of the Arizona Department of Water Resources (ADWR) controversial new rule imposing the requirement of a 100-year groundwater supply across wide swaths of the state.
Goldwater’s Vice President for Litigation Jon Riches wrote, “This government overreach sets a troubling precedent for other bureaucratic agencies to bypass the authority of the legislature. Due to ADWR disregarding the legislative process and the risks posed by the water rule, the Goldwater Institute is suing Governor Hobbs’ administration.”
Goldwater is challenging the Arizona Department of Water Resources’ (ADWR) controversial new rule imposing the requirement of a 100-year groundwater supply across wide swaths of the state. The troubling regulation was detailed earlier this year in an op-ed from Goldwater’s Vice President for Litigation Jon Riches and in a report by AZ Free News.
Riches explained that Hobbs’ appointed Director of ADWR, Tom Buschatzke, is “working outside Arizona law,” by implementing the new “unmet demand” rule, unilaterally without legislative approval or following the statutory rule-making process.
He wrote, “Despite Buschatzke’s apparent desire to act as a mini czar with unilateral power to determine this state’s water policy, his authority — like all government power — is constrained by Arizona law. And that law is crystal clear: When regulatory agencies like ADWR attempt to impose sweeping policies — such as halting all new home construction across large parts of the Valley — they must do so through formal rulemaking, allowing for public input. Instead, Buschatzke sidestepped this requirement and imposed his homebuilding moratorium with the stroke of a pen. The Goldwater Institute, where I work, is now suing the agency to halt the illegal rule.”
In the email, Riches warned, “If someone wanted to build a house, they would be blocked from doing so if another part of the designated region, miles and miles away, did not meet the criteria of this water rule.”
The email also outlined three direct impacts that Arizona taxpayers could expect to feel: “Increased housing costs, prevention of homebuilding, [and] a dangerous precedent for government overreach.”
Riches added, “This is one of the most critical lawsuits by the Goldwater Institute in our history. We have been successful in challenging unconstitutional laws in the past, and we are ready to fight this one.”
The complaint in Home Builders Association of Central Arizona v. Arizona Department of Water Resources can be found online here. The case is currently in the Maricopa County Superior Court pending a response from the ADWR.
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
