State water department will appeal judge’s decision to strike down water restrictions

PHOENIX – An Arizona trial court has struck down the Arizona Department of Water Resources’ restriction on home development, but homebuilders won’t be starting construction any time soon as a result on lots that have been gathering dust over the past few years.

The Goldwater Institute sued Gov. Katie Hobbs administration in January 2025 over water restrictions on behalf of the Home Builders Association of Central Arizona.
ADWR had imposed a new rule in 2024 that requires a 100-year groundwater supply across water management areas, and not just at development sites. This new restriction is known as the “unmet demand rule,” a restriction limiting construction throughout metro Phoenix, said Jon Riches, vice president for litigation and general counsel for Goldwater Institute.

“We have passed on several land deals we thought were interesting because of the water restrictions caused by this capricious rule,” said Don Barrineau, Phoenix division president for Orland, Florida-based Mattamy Homes, which is the U.S. arm of the Toronto-based homebuilder.

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