Hobbs reveals West Valley current water supply cannot support planned development

Arizona’s explosive population growth has made the West Valley one of the hottest targets for new residential and commercial development. But a recent report from the Arizona Department of Water Resources (ADWR) has thrown a serious curveball for investors: the Hassayampa sub-basin, which supplies Buckeye and surrounding areas, does not have enough groundwater to support planned growth.

Why This Matters for Investors

At the heart of the issue is Douglas Ranch, a 37,000-acre master-planned community west of the White Tank Mountains. Positioned to be a major driver of future housing, retail, and multifamily demand, Douglas Ranch is now facing uncertainty. Governor Katie Hobbs announced that the basin is 4.4 million acre-feet short of water needed for long-term development — and under Arizona law, every new home must prove a 100-year assured water supply before construction can proceed.

For investors, this means:

  • Short-Term Risk: Large-scale residential projects in Buckeye may be delayed or canceled until solutions emerge. Land speculation in these areas becomes far more uncertain.
  • Ripple Effect: Slower homebuilding could reduce near-term demand for retail centers, services, and supporting infrastructure.
  • Multifamily Implications: Rental housing demand may strengthen in areas with secure water supplies, as limited new home development puts pressure on available housing.

Not a Surprise to Water Experts

Policy leaders, including Kathleen Ferris of ASU’s Kyl Center for Water Policy, have long warned that groundwater supplies were insufficient to meet aggressive growth plans. The newly released ADWR study confirms these concerns and forces both policymakers and developers to face reality.

What Comes Next

ADWR Director Tom Buschatzke made it clear: no new water supply certifications will be approved in the Hassayampa area until solutions are found. For investors, that means:

  • Watch for infrastructure or policy changes — such as new pipelines, conservation measures, or negotiated water imports — which could unlock stalled projects.
  • Expect shifting capital flows toward areas of the Valley with proven water security, such as infill locations or communities with CAP (Central Arizona Project) allocations.
  • Recognize that scarcity may create opportunity: properties in well-positioned submarkets could see outsized appreciation as demand redirects away from constrained growth zones.

The Bottom Line

For real estate investors, water has always been the hidden variable in Arizona growth. The West Valley shortage highlights the importance of looking beyond simple population forecasts and understanding resource constraints that directly shape property values and development timelines.

Investors who stay ahead of these shifts — focusing on markets with secure water supplies and watching policy developments closely — will be best positioned to capitalize on both the risks and the opportunities created by Arizona’s water reality.


Investor Takeaway: If you own, plan to buy, or are considering selling multifamily assets in the Phoenix Metro, now is the time to reassess your strategy. At Metro Phoenix Commercial, we help investors identify which submarkets will thrive — and which may stall — as water policy reshapes the Valley’s growth.

👉 Contact us today to discuss how these changes could impact your investment strategy and uncover the best opportunities in the current market.

Credit: Courtney Holmes – ABC 15 – https://www.bizjournals.com/phoenix/news/2023/01/11/hobbs-far-west-valley-water-supply-not-enough.html

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