by Staff Reporter | Jun 11, 2026 | News
By Staff Reporter |
The Arizona Department of Water Resources (ADWR) exceeded its authority under state law, the Maricopa County Superior Court ruled Monday.
The court determined in an under advisement ruling in this ongoing case that, again, ADWR lacked authority under state law to impose a new obligation on home developers to secure additional water supply.
The Home Builders Association of Central Arizona and Arizona Senate President Warren Petersen (R-LD14) have challenged this and other ADWR policies initiated at the behest of Gov. Katie Hobbs.
Maricopa County Superior Court Judge Scott Blaney said this additional requirement by ADWR went beyond what state law required. Per Blaney, the law only requires developers to show 100 years of continuous availability of water sufficient to satisfy water needs for the use proposed by the developer.
State law limited ADWR to two pathways: either developers could obtain a certificate of assured water supply from ADWR or they could obtain a commitment of service from a municipal provider such as a city, town, or private company with an ADWR assurance of water supply designation.
However, under a new rule pushed by the Hobbs administration, R12-15-710(H), ADWR limited developers to a third, new pathway for assured water supply designation. This pathway involved a newly created category of water availability ADWR called “New Alternative Water Supplies,” and required developers to secure an additional 25% of this new category beyond their proposed usage needs.
The ADWR changes under Hobbs resulted in what effectively became a housing moratorium. New building progress in the Valley ground to a halt.
Blaney ruled ADWR lacked the authority to create this third, new pathway. He declared that the plain language of the statute only requires a 100-year guarantee of water needs satisfaction.
“The Legislature created two paths to establish an assured water supply to develop a subdivision: obtain a certificate; or obtain a designation,” said Blaney. “Through the implementation of its moratorium and its nearly simultaneous promulgation of a rule that demands more water than the statute requires, ADWR has in effect attempted to rewrite the governing statute at the agency level.”
Blaney also rejected ADWR’s argument that this third pathway was a voluntary, alternative path out of several for developers. He sided with the developer’s assessment that ADWR had unlawfully restricted developers to a single pathway.
The court ruling on Monday blocked ADWR from enforcing the rule.
In April, the Maricopa County Superior Court struck down ADWR’s housing moratorium articulated in several rules pertaining to unmet water demand and depth-to-water limits.
Similar to this most recent ruling, Blaney found that ADWR sought to break necessary limitations on administrative agency powers and had unlawfully implemented two agency rules without following the Administrative Procedures Act.
AZ Free News reported last month that the ADWR-spurred housing moratorium may put taxpayers on the hook for more than $1 billion, due to ongoing and potential future builder compensation claims.
ADWR plans to appeal pending the final ruling.
When Hobbs took office, she formed a Water Policy Council to overhaul the state’s approach to groundwater management. Two committees were formed, one of which addressed assured water supply.
AZ Free News is your #1 source for Arizona news and politics. You can send us news tips using this link.
by Staff Reporter | May 7, 2026 | News
By Staff Reporter |
Gov. Katie Hobbs’ overruled housing moratorium could leave taxpayers on the hook for more than $1 billion in compensation to builders.
The housing moratorium was a result of the Arizona Department of Water Resources’ (ADWR) indefinite suspension of developer certificates throughout the Valley based on new groundwater regulations imposed under Hobbs in 2024.
For decades, state law required developers to prove 100 years of assured water supply for their developments. Once Hobbs took office, ADWR imposed new regulations that expanded developers’ duty to prove assured water supply beyond their development into the surrounding water management area.
The Home Builders Association of Central Arizona (HBACA) sued ADWR over the regulations last January, represented by the Goldwater Institute. Last month, the Maricopa County Superior Court sided with HBACA and struck down the moratorium. Judge Scott Blaney found that ADWR violated Arizona law on the extent of its powers and on agency rulemaking.
ADWR plans to appeal the ruling.
A former ADWR director and one of the leading policymakers behind the legacy rule on assured water supply (the 1980 Groundwater Management Act) spoke out against the superior court ruling.
Kathleen Ferris, now an Arizona State University (ASU) senior research fellow with the Kyl Center for Water Policy, told KJZZ last month that ADWR was justified in its rulemaking because it had discovered that Phoenix-area groundwater was more interconnected than understood previously.
Whether that court ruling will stand on appeal or no, taxpayers will likely be on the hook for hundreds of millions — perhaps over a billion — in builder compensation claims filed under the Private Property Rights Protection Act, enacted under Proposition 207.
Prop 207 entitles property owners to just compensation for any land use laws’ impact on the use, division, sale, or possession of their property that reduces its fair market value.
One such Prop 207 claim is already underway.
Last September, developers Buckeye Tartesso and Buckeye Tartesso II filed a claim demanding over $320 million in compensation for lost value due to the ADWR rule. That figure, however, reflected only a low estimate which the developers felt they could accept as a settlement.
“[This figure] incorporates a number of conservative assumptions, and the [developers] expect that actual, proven damages would be significantly higher,” read the demand letter. “This demand is an offer of settlement, in the nature of a compromise, and the [developers] reserve the right to seek additional or different damages if litigation is necessary.”
ADWR prevented the developers from obtaining a certificate of assured water source for the Tartesso development in the city of Buckeye, which spanned over 12,800 acres. As a consequence, they were prohibited from subdividing or selling lots on that property.
The Goldwater Institute filed the claim on behalf of the developers.
Should all builders file similar claims, taxpayers could be on the hook for over $1 billion in compensation payments at a time when the state is already struggling with budget woes.
Gov. Hobbs inherited a budget surplus of over $2.5 billion from her predecessor, Republican governor Doug Ducey. After two years in office, the budget plunged to a $1.4 billion deficit: a near-180 on the state’s fiscal health.
The latest figures reflect a slightly better status, though still nowhere near in the black: a deficit of over $300 million, according to Rep. David Schweikert (R-AZ-06).
AZ Free News is your #1 source for Arizona news and politics. You can send us news tips using this link.
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.”
AZ Free News is your #1 source for Arizona news and politics. You can send us news tips using this link.
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.
