Arizona announced it lacks enough groundwater to support already-approved housing construction in the Phoenix area, a move that signals trouble for water shortages in the West and elsewhere.

State officials have decided to halt construction of new subdivisions, which could end the rapid growth that has propelled Phoenix to become the fastest-growing metropolitan area in the United States, The New York Times reported.

The battle over water rights is expected to roil Arizona’s real estate market, driving up home prices and jeopardizing the region’s historically affordable housing.

“Housing affordability is going to be a challenge going forward,” Spencer Camps, vice president of legislative affairs for the Central Arizona Home Builders Association, told TIME.

Democratic Gov. Katie Hobbs assured the public that the state was not on the verge of drying up, stressing that new construction would continue in major cities such as Phoenix.

However, an analysis conducted by the state to project groundwater levels into the next century prompted a decision to limit future housing developments that depend on wells for water.

Maricopa County, which includes Phoenix and its suburbs, relies on groundwater for more than half its water supply, with the rest coming from rivers, aqueducts and recycled wastewater. However, groundwater is a finite resource that takes thousands of years to replenish, according to the media.

The Times said the impact of the announcement will be strongest in small towns on the outskirts of Phoenix and in uninhabited desert areas, where less expensive homes are typically built.

Developers and cities now face the challenge of finding alternative water sources — such as buying water from farmers or Native American tribes, many of whom are already experiencing their own water shortages — to sustain future growth.

While near-term development plans in major cities such as Phoenix, Scottsdale and Mesa may not be severely affected, housing projects that rely on groundwater are gaining approval in areas outside their borders, especially those that lack a designated water supply. will face major obstacles.

Groundwater shortages in Arizona are part of the broader impact of climate change on the American Southwest.

A 23-year drought and rising temperatures have lowered water levels in the Colorado River, which supplies water to 40 million people in seven states. Water stress is further exacerbated by increased evaporation rates and increased water demands of crops under warmer temperatures.

The state’s response to the crisis has included reliance on new water conservation measures and alternative water sources. Some critics, however, argue that Arizona continues to over-deplete groundwater, exacerbated by unregulated industrial projects.

“It’s the root of the hydrological fault,” Cynthia Campbell, a Phoenix-based water management consultant, told The New York Times. “The reality is, it’s all coming back to grab us.”

While construction continues and permits have been granted for about 80,000 unbuilt residential lots, developers and communities may have to contend with future water stress.

— Ted Glazer

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