As they ponder whether the parched Western U.S. will have enough water to meet the future needs of growing populations there, most builders and developers see a glass that's more than half full.

Never mind that arid Arizona is now into its 13 th year of drought conditions; or that Las Vegas' primary source of water, Lake Mead, is half empty; or that California just went through its worst 12 months of drought in 130 years; or that the Colorado River, a liquid lifeline for nearly 30 million Americans in seven Western states, has seen its flow levels drop precipitously over the past decade.

Builders, developers, politicians, and water officials in Western states chant “there will be water, there will be water” whenever they're asked how capacity can possibly keep up with demand, even when Arizona's and Nevada's residents are projected to nearly double by 2050, and when California's population could mushroom to 60 million. They remain confident that water shortages won't stall future residential development or construction, but they aren't blind, either, to conditions of sparser supply and the pressing need to use water wisely. “There could be a time when water supply jeopardizes how many permits are issued,” concedes Greg Bielli, Western region president of the giant developer Newland Communities. “The building industry is working in multiple jurisdictions, so we're on the front line, and we need to be on the cutting edge” of conservation.

TAPPING A DRYING WELL: Las Vegas is building a third pipeline to its primary water source, Lake Mead, which, at 12.6 million  acre-feet, is currently less than 49 percent full.
TAPPING A DRYING WELL: Las Vegas is building a third pipeline to its primary water source, Lake Mead, which, at 12.6 million acre-feet, is currently less than 49 percent full.

Arizona, despite huge underground reserves in the Phoenix area, has only enough water to develop about 10 percent of its landmass, so water is “the single biggest factor in development here,” says Steve Soriano, president of Sun Lakes, Ariz.–based Robson Communities. Two years ago, a Robson-owned company, ASR Resources, invented the V-Smart Valve, which allows water to be stored in sandy ground and pumped out when it's needed. Robson now uses this technology in its communities and sells it to other builders. “Arizona has enough water to use,” says Soriano, “but it doesn't have any water to waste.”

PUBLIC–PRIVATE COOPERATION Westerners can be hopeful because they believe their region is “far ahead” of the rest of the country in water conservation, and because “we've been dealing with the problem for decades,” says Steve Doyle, president of Brookfield Homes' San Diego division. But when 70 percent of the snowmelt from the Sierra Mountains ends up in the Pacific Ocean; when the vast majority of water in Southwestern states is earmarked for agriculture, ranching, and landscape irrigation; and when Arizona voters approve a massive recreational water park that would require anywhere from 60 million to 100 million gallons each year, it's hardly surprising that Doyle and other builders and developers see water as being more about allocation than supply, and about conserving and reclaiming more water, including a much wider reuse of treated wastewater known as effluent (see “Waste Not, Want Not”).

To that end, many companies are working with local municipalities to make their communities and homes drought tolerant and, in some cases, able to help replenish existing water supplies. In January 2007, Riverside County adopted a “California-friendly” ordinance that establishes landscaping guidelines. It's modeled after a pilot builder program that Los Angeles–based Metropolitan Water District (MWD)—the water wholesaler for much of Southern California—launched in 2002. The goal of the program is to reduce outdoor water consumption (which can account for up to 70 percent of a household's water use) by 30 percent by installing xeriscapes, using water-restricting irrigation systems, and capturing more storm runoff. KB Home's community in Temecula, Calif., (in Riverside County) was the first to team up with MWD in 2004, and its homeowners have seen their water bills fall by 40 percent, says Steve Ruffner, president of KB's Riverside division. KB now offers landscaping packages at other communities in Riverside and San Diego that include a “smart” irrigation system linked to satellite technology that senses when it's going to rain.

Riverside County intended to apply its ordinance to residential development in 2010. But county supervisor Marion Ashley says local builders urged the county to accelerate the program's mandated start to 2008. Larry Gotlieb, KB's vice president of government and public affairs, is among those who believe builders have a responsibility to help municipalities devise ways to use and save water efficiently.

MWD is now into the second phase of its pilot, which offers builders $2,500 per house to change home models over to drought-tolerant landscaping and install water-efficient toilets and washing machines. (California Gov. Schwarzenegger recently signed a bill that requires 50 percent of all new homes to have toilets that use 1.28 gallons per flush by 2010, and 100 percent by 2014.) Charles Gale, MWD's senior government affairs representative, says that several builders, including Brookfield Homes, Shea Homes, and John Laing Homes, are participating in this pilot.

Drought conditions are making two things clearer to everyone, says John Ritter, CEO of Las Vegas–based developer Focus Property Group: that while the West may have “plenty of water,” major changes are needed in how it's collected, stored, and used; and that water availability will depend “on how much you want to pay for it,” a question Ritter expects will spark debates about allocation. As water use hits people's pocketbooks harder (a given, say builders and developers), it remains to be seen if homeowners willingly embrace conservation, and whether voters ante up for infrastructure improvements and expansions promising a steadier flow of water to their towns in the future.

SMARTER USAGE When Prescott, Ariz., declared, in 1998, that there could be no net water loss from its aquifer and capped how much water it would consume annually, Phoenix-based developer M3 Cos. got legislation passed that established different water allocation criteria for master planned communities, recalls its managing director, Bill Brownlee. Such maneuvering continues today and highlights how residential development and water are inextricably linked in a state where developers must verify that they have 100 years worth of water before starting any project.

Learn more about markets featured in this article: Las Vegas, NV, Riverside, CA, Phoenix, AZ, Los Angeles, CA.