For some Arizona homeowners, rising water bills are adding thousands of dollars to annual expenses, creating another financial concern for those planning for retirement.
Monthly bills for some heavy water users have climbed from $80 to more than $300.
Here's what to know
Colorado River shortages and groundwater restrictions are changing the costs and risks of Arizona homeownership, according to 24/7 Wall St.
An increase from $80 to $300 would add $2,640 in annual expenses and could require an additional $66,000 in retirement savings for someone planning to withdraw 4% each year.
Central Arizona relies largely on groundwater and Colorado River supplies.
The Central Arizona Project moves river supplies to Arizona's central and southern regions along a 336-mile canal network, with a Tier 1 shortage reducing those deliveries by an estimated 30%.
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In a shortage declaration described by the outlet, Arizona again received an allocation 18% below its full Colorado River share.
Meanwhile, a federal proposal under discussion would allow cuts of up to 40% to Arizona, California, and Nevada, adding uncertainty for residents planning long-term expenses.
More background
Homeowners in communities with lawns, lakes, and heavily landscaped shared spaces typically pay for that upkeep through HOA dues — meaning their monthly utility bill is only one way they encounter water costs.
A 2026 Arizona report cited by 24/7 Wall St. found that a household consuming roughly 15,000 gallons faced an additional monthly charge of about $22 after rates rose 25%.
That amounts to $264 annually, requiring another $6,600 in savings under the same 4% withdrawal calculation.
Outside utility service areas, the concern can extend beyond affordability to whether water will be available at all.
In Rio Verde Foothills, an unincorporated community near Scottsdale, the city ended residents' access to hauled water on Jan. 1, 2023 because of drought conditions.
What can be done?
A buyer's request for water supply documentation can mean asking for the development's assured water supply certificate or written confirmation of its provider's state designation.
Another starting point is determining who provides the property's water.
The Arizona Department of Water Resources' Assured and Adequate Water Supply programs evaluate whether water will remain available for a century. New subdivisions in the Phoenix and Tucson areas generally need one of these protections.
A well's record in the state registry lets resale buyers examine past declines in water level along with its age and depth. Neither private well service nor water delivery carries the assured supply protection described above.
Extra savings for water and landscaping costs give buyers one way to prepare, and reviewing past utility rates is another. These steps can be especially helpful where HOA amenities require substantial water.
Arizona's Department of Water Resources revised its groundwater model in 2024 and identified other supply options, including Ag to Urban and the Alternative Path to Assured Water Supply.
The state's 2023 groundwater assessment identified limitations on groundwater availability.
"If we do nothing, we would face a 4% shortfall in groundwater supply over the next 100 years," Gov. Katie Hobbs warned, adding that developers would need sources beyond groundwater to qualify for assured supply certificates, 24/7 Wall St reported.
Where can I learn more?
Arizona's water shortages are putting pressure on household budgets and raising questions about new development. These stories examine Colorado River cuts, rising bills, and the growing problem of utility debt.
• Across the United States, water bills jumped 62% in a decade, outpacing paychecks and inflation.
• Arizona water experts warn of unprecedented Colorado River cuts affecting Phoenix and Tucson water supplies.
• Phoenix says 7,000 overdue water accounts owe $24 million, with shutoffs possible next month.
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