Illustration depicting Arizona's shift from agricultural land to urban areas for better water management.
Arizona has enacted the Ag-to-Urban Groundwater Conservation program, allowing retiring farmers to sell groundwater rights to housing developers. This law aims to address housing shortages while promoting water conservation. The program marks a significant shift from the 1980 Groundwater Management Act, enhancing access to affordable housing and optimizing water use. With projections to save around 10 million acre-feet of water over the next century, this legislation is vital for Arizona’s future water negotiations, particularly with the Colorado River.
Arizona has officially enacted a pivotal piece of legislation aimed at transforming water management and land use in the state. On June 30, 2025, Governor Katie Hobbs signed Senate Bill 1611 into law, establishing the Ag-to-Urban Groundwater Conservation program. This legislation, recognized as one of the most significant in Arizona’s history, permits retiring farmers to sell their groundwater rights directly to housing developers. This move is anticipated to alleviate housing shortages while promoting water conservation efforts across the state.
The Ag-to-Urban program represents a substantial shift in Arizona’s approach to land use, enabling developers to bypass the 1980 Groundwater Management Act. This earlier law mandated construction projects to demonstrate access to a sustainable water supply for a century. The new legislation is expected to enhance the supply of affordable housing while optimally utilizing the existing water resources by transitioning agricultural land—which is traditionally water-intensive—into residential areas that utilize less water.
The implementation of this law is projected to save approximately 10 million acre-feet of water over the next 100 years. Governor Hobbs indicated that the legislation would play a significant role in the ongoing negotiations surrounding the Colorado River, positioning Arizona favorably in discussions regarding water allocation as current agreements are set to expire in 2026. By allowing farmers to profit from their land’s groundwater rights, the law also seeks to reconcile the urgent need for housing with sustainable agricultural practices.
State Senator TJ Shope, the bill’s sponsor, emphasized the importance of providing affordable housing for future generations. The legislation garnered bipartisan support, reflecting a collaborative effort to address the pressing issue of water management and housing availability in Arizona. The Ag-to-Urban program is set to take effect on September 26, 2025, paving the way for changes in both real estate development and agricultural practices in the coming years.
As discussions continue regarding the impact of this legislation on Arizona’s agriculture industry, questions arise about how it will affect obligations under the Central Arizona Groundwater Replenishment District. There is concern among officials regarding the balance between agricultural water usage and residential needs. The federal government has also expressed the expectation for Arizona to manage its groundwater effectively in light of anticipated future demands.
The introduction of this bill occurred rapidly between June 19 and June 30, 2025, indicating a high level of urgency in addressing water management challenges in the state. Political dynamics surrounding water usage rights and legislative control remain complex, with previous tensions influencing the pace and direction of this legislation. Nonetheless, many officials view the Ag-to-Urban Groundwater Conservation program as a critical step toward enhanced water conservation practices in Arizona.
As the state strategizes for the future, the implications of this law on both housing and water resources will be closely monitored. The actions taken by Arizona serve as a response not only to immediate needs but also as a reflection of evolving approaches to resource management amid growing environmental challenges.
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