New Arizona law may revive stalled housing project

A Buckeye housing development stalled by a statewide moratorium could soon move forward under a new Arizona law that allows farmland to be converted into residential neighborhoods while conserving groundwater.

Gov. Katie Hobbs last month signed Senate Bill 1611, a bipartisan “ag-to-urban” measure that takes effect Sept. 26. The law permits landowners to retire irrigated farmland and transfer a portion of their historical water use to housing developments, under strict conservation and replenishment requirements.

The legislation was backed by developers including Cowley Companies, which owns land in Buckeye where a project was halted due to the governor’s 2024 decision on groundwater-based assured water supply determinations.

“The genesis of this legislation was a project we were working on in Buckeye that was stalled midstream by the moratorium,” said Mike Cowley, CEO of Cowley Companies. “Upon implementation of the program, we fully intend to apply and hope that this first project can be a shining example of the benefits of ag-to-urban.”

Supporters of the bill say converting farmland to housing uses less water overall and provides a path to easing Arizona’s housing shortage while protecting groundwater.

“History has shown us that the conversion of farmland to homes is a net positive for our aquifer; we use less water today than we did in 1950,” Cowley said. “The legislation we introduced seemed like a common-sense solution to the housing affordability crisis we are facing while protecting our most precious resource.”

SB 1611 limits water use, restricts turf and high-water landscaping, and requires groundwater used in new subdivisions to be offset with alternative sources. It applies in the Phoenix and Pinal Active Management Areas, where development had been limited under the moratorium.