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Arizona: Governor Katie Hobbs Celebrates First "Ag-to-Urban" Groundwater Conservation Approval

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The first approval from Arizona's landmark program will provide enough water for 825 new homes, saving over 437 million gallons each year

Phoenix, AZ – Today, Governor Katie Hobbs announced Arizona's first issuance of Groundwater Savings Credits, granted under the state's landmark "Ag-to-Urban" Groundwater Conservation Program. The approval of these Groundwater Savings Credits provide enough water for 825 new homes to be built and will save over 437 million gallons per year compared to the land's historic agricultural use - an 80% reduction in water usage.

Forestar Real Estate Group submitted its application to the Arizona Department of Water Resources (ADWR) immediately after the law became effective, and just 45 business days later, the agency issued Arizona's first Groundwater Savings Credits. These credits were incorporated into Forestar's application for a Certificate of Assured Water Supply. Forestar's Certificate of Assured Water Supply was issued for Public Notice the very same day.

"I'm taking bold action to protect our water, grow our economy and lower costs for Arizona families. The first-ever Groundwater Savings Credits under the Ag-to-Urban program shows we can use new, innovative policies to increase our housing supply, grow sustainably, and save our precious water supplies," said Governor Katie Hobbs. "Protecting our water goes hand-in-hand with growing our economy and creating jobs. I'll never stop fighting for the water security Arizona businesses, farmers, and families deserve because I know it is the lynchpin for a thriving state now and for generations to come.

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"I congratulate Forestar for taking advantage of the ag-to-urban program, and I encourage homebuilders and farmers throughout our state to participate in this voluntary and innovative approach to building the housing we need while protecting Arizona's water supply."

"Arizona's 'Ag-to-urban' Program creates new pathways for smart development by helping landowners and farmers partner to convert high-water using agricultural land into water saving and residential housing," said Brian Konderik, Region President at Forestar Group Inc. "Forestar is proud to have received the first Groundwater Savings Credits issued in Arizona, as one of the largest single-family residential developers in the nation, our work supports homebuilders and helps them provide crucial housing supply. We app   reciate Governor Hobbs for her commitment to finding policy solutions that save water and build houses."

"After two years of bipartisan negotiations and diligent work on Arizona's Ag-to-Urban-Program, I am proud to see this policy producing results just months after becoming law. This program reflects a core Arizona value: empowering landowners and farmers – not government – by giving them the flexibility to make the best decisions for their own operations," said State Senate President Pro Tem T.J. Shope. "With these approvals, we are expanding housing supply, supporting responsible growth, and strengthening our water security without placing new burdens on our agriculture community. This is exactly the kind of practical water policy that keeps Arizona competitive and protects the future of our state."

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"From its inception in Governor Hobbs' Water Policy Council, ag-to-urban has offered a practical path to convert historic agricultural water use into efficient housing," said State Senate Democratic Leader Priya Sundareshan. "Senate Democrats fought to make sure these conversions produce real savings, and the first 80% reduction proves that work mattered. Still, this is just a first step and we need sustained action to secure Arizona's water future."

"Buckeye is one of the fastest-growing communities in the country, and we continue to lead the way in innovative water management," said Buckeye Mayor Eric Orsborn. "The Ag-to-Urban program is a critical tool that will support sustainable growth, help meet our region's housing needs, and strengthen the city's long-term water portfolio. We are grateful to the Governor Hobbs, the Legislature, and the many stakeholders who worked diligently to make today possible."

"Gov. Hobbs and ADWR deserve credit for moving quickly to implement a practical, bipartisan solution that supports both our water security and our housing supply," said Danny Seiden, president and CEO of the Arizona Chamber of Commerce & Industry. "The Ag-to-Urban program shows that Arizona can conserve water while still supporting responsible growth. Providing the certainty needed for 825 new homes while sharply reducing groundwater use is the kind of balanced approach that keeps our state competitive and gives families and employers confidence in Arizona's future."

Arizona's Ag-to-Urban Program passed the Arizona Legislature with a bipartisan supermajority in the Senate and a bipartisan majority in the House on June 30, 2025. This landmark legislation is part of Governor Hobbs' continued work to protect Arizona's groundwater supplies and facilitate sustainable economic growth. Governor Hobbs has also created programs to increase 100-year Assured Water Supply Protections across Arizona communities, and taken historic action to protect groundwater supplies in rural Arizona.

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