Land

The Wild, Wild, Wild West Of Water And The Future Of Homebuilding

From Scott Cox, everything you never wanted to have to know about water and what it means to the future of community development West of the Rockies.

Land

The Wild, Wild, Wild West Of Water And The Future Of Homebuilding

From Scott Cox, everything you never wanted to have to know about water and what it means to the future of community development West of the Rockies.

April 28th, 2022
The Wild, Wild, Wild West Of Water And The Future Of Homebuilding
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Whiskey is for drinking, and water is for fighting over” – Mark Twain
Water flows uphill towards money” – Marc Reisner, Cadillac Desert
I tell you gentlemen you are piling up a heritage of conflict and litigation over water rights, for there is not enough water to supply the land” -- John Wesley Powell - 1893

Water availability is more and more in the news, especially in the West. For those not accustomed to worrying about this in their developments, it's confusing. So, I’m attempting here to provide a very basic overview. And let me start by apologizing to my friends who are expert in various facets of this, for my vast oversimplification of the topic. Water and our challenges with it, are at once both simple and complicated.

Let’s start with the simple. Why do we have a problem?

  1. A combination of long-term weather cycles and climate change (we don’t need to argue about the mix) is reducing – and making more volatile – moisture in the West, whether in the form of rain or snow.
  2. The Colorado River is the critical source in the West that fueled much of our development. In the 1920s, when it was allocated amongst Upper Basin (Utah, Wyoming, Colorado and New Mexico) and Lower Basin (California, Nevada, Arizona) states, allocations were based on some above-average moisture years. Fact is, it simply does not produce as much as originally assumed.
  3. Regulating groundwater use has been difficult to initiate even when aquifer levels are clearly falling, as it is for the most part not based on seniority but on ownership of the land. Phoenix is a good example of a comprehensive areawide plan. However, trying to institute such a plan in the Antelope Valley in California resulted in years of litigation.
  4. Depending on the state, Agriculture uses 80-to-85% of the water, with urban use taking the balance. Residential uses, on average, 1.5-acre feet per acre per year (3 DU/acre). Agriculture, on average, uses 4.5-acre feet per acre per year.
  5. Erratic rain and snow fall means we need more storage to capture large runoffs for lean years. But, for a variety of reasons, we rarely build dams anymore (there is some recharge of aquifers for storage) or even offstream storage.

That's where the simple part ends. Why not just move more water from agricultural use to residential? That would trade off some low value "ag" in exchange for enough water for continued growth. Here's where complications pile up.

  1. Every western state’s water law differs. While most have some version of “senior in time” for rights to surface water, few fully managed their ground water. And the seniority of water rights complicates solutions for moving water, as it can disproportionately impact on different users. Water must be put to “beneficial use.” That means, basically, use it or lose it.
  2. It’s a politically-charged issue. Think rural (where water is for ag) vs. urban (cities). Red vs. Blue. Front Range vs. western slope in Colorado, Coastal vs. Central California, Los Angeles vs. Owens Valley, etc.
  3. Upper Basin vs. Lower Basin states in the Colorado River compact. The Upper Basin has to provide 75 million acre feet of water in any 10 years to the Lower Basin states. The Upper Basin gets the balance. That math worked fine when it was not all necessary. Now that it is, it’s a big problem. Not to mention what happens when Lake Powell falls to a level that the turbines don’t work.
  4. Some agriculture can fallow for a year and lease water to users who need it. But not all crops can survive a year without water. If you use water to grow grass for cattle, what do the cattle eat if you have no water? In addition, for many small ranching/farming communities, if several large ranches sell their water rights, the town itself, literally dries up. No work, no town. It happens. Sometimes known as “buy and dry.” And you can’t base a development of homes on temporary leased water.
  5. Interbasin transfers (think watersheds) are difficult, if not impossible to do.
  6. Not everything is intuitive. Phoenix has arguably the worst water position in the west, if you just look at climate, and few mountains to catch or hold snow. And it’s last in line for the Colorado River water. But it is the most proactive in its groundwater management plans, and Phoenix is convinced it has water for several decades of growth (you can get arguments on this).
  7. Surface water (renewable) is generally more valuable than ground water (nonrenewable). Technically aquifers can recharge, but on geologic time scales from natural causes. Some areas are now storing some excess surface water, or water from treatment facilities, in the ground.
  8. Environmentalists don’t want more storage due to the harm it does to environmental uses and outdoor recreation.
  9. Many powerful water agencies – Metropolitan in LA and Denver Water, for example, are deeply resented and not trusted in their states, as they are believed to have “grabbed” water from elsewhere, harming other communities (Owens Valley and the Western Slope, respectively).
  10. You can have water rights, but can you get the water to where you need it? Water is expensive to move and requires access across vast stretches of land. Ever had trouble getting a half mile easement? Try hundreds of miles.  
  11. Water is not all used and lost. Much goes back into “the system” through groundwater, processing, etc. And those return flows feed those with rights downstream. This is such a sensitive issue that a Colorado development fought for years for the rights for experimental cisterns in their community.

What are the development implications?  There are three main weapons against development (not to minimize schools, NIMBYs, etc.):

  • Traffic/Greenhouse Gases. We’ve struggled with traffic studies, and in California your environmental impact report has to address GHG emissions. Lest you chuckle at those goofy Californians, I think it’s a coming attraction in your state. Carbon neutral can be tackled – expensively – by moving to a net zero development. But you really can’t go net zero on traffic, so one option is buying GHG credits. Expensive, but doable.
  • Fire. Increasingly, the weapon of choice to stop development. Not just the wildland/urban interface, but even grass fires. See Boulder. But it is possible to mitigate through materials, defensible space, shelter-in-place back-up facilities, multiple community exits, etc. Which is not meant to minimize the emotional appeal of a parent saying “our roads are already clogged; you’ll kill us in a fire evacuation with more people.” But there are solutions if you can move past emotions.
  • Water. Water becomes the ultimate weapon. As noted, before, it’s expensive to acquire and to move and has all kinds of technical limitations to both. You can’t just solve it with a big check. And even if it grates, you can see the logic and appeal of neighbors saying, “my well isn’t producing and I have to drill a new one, and you’re going to let these guys build 1,000 homes???” or, “We’re on every third day water restrictions and you want more homes?????”

Conclusion. First, your mother or guidance counselor should have told you to become a water lawyer. You’d be rich and powerful. But beyond that:

The amount of water required per home is usually based on type – single-family or multifamily. It’s not size based. So, a home on an 8,000 single-family lot has the same water fee as a small lot detached home on a postage stamp. This fact makes it very hard to build small homes. We need to convince our municipalities to make water requirements be more home square footage based/fixture based/tiered rate/etc. Or, it’s another nail in the coffin of attainable homes.

Pricing of water will have to be tackled. Many public works projects from the Depression Era were developed to support growth, especially agriculture, and users were (and are) charged at a rate to pay off infrastructure over a 40-year period with capital cost. Allowing users with seniority to make a lot of money with what is in effect government-subsidized water can cause controversy, but water does need to be moved. This runs headlong into the “water is human right” argument. But rights don’t build infrastructure or move water.

Location, location, location, is slowly being replaced in the West, with water, water, water. If you thought “path of growth” was based on job growth and roads, it’s at least as important to know where the water is and will be. And it seems people and water are often not in the same place.

More emphasis on water reuse, potable/non-potable water, etc. We can’t fix our issues in the West if all “fixes” are funded by new homes/development only. The reality is existing communities benefit from growth and often “did not pay their own way.” Like other entitlement and infrastructure issues, it takes some commitment and change from all to come to a solution. Charging $25,000-plus tap fees or more – when homeowners who do not even have water meters continue to exist – makes no sense.

More and more, it will be the most critical part of your due diligence.

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ABOUT THE AUTHOR

Scott Cox

Scott Cox

Principal, SLC Advisors

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