Nov 9, 2023: PV Council Considers Ordinance Requiring New Rental Developments to Supply Water

Prescott Valley is moving forward on management policies aimed at water conservation and balancing its water supplies. During its Thursday study session, the Town Council considered a draft ordinance requiring future rental developments to secure water rights similar to requirements for traditional subdivisions. These rental subdivisions are being built around Arizona and are sometimes referred to as “build to rent.” It is widely accepted that this treatment of rental subdivisions is a loophole in state law that leaves cities and towns in an impossible position when it comes to water management.  

In the Prescott Active Management Area, including Prescott Valley, new residential subdivisions cannot be approved unless they show they have obtained a Certificate of Assured Water Supply from the Arizona Department of Water Resources, or that they have received a written commitment from a public or private water provider that has received a Designation of Assured Water Supply from ADWR. However, the definition of “subdivision” or “subdivided lands” in Arizona has some significant exceptions, including apartments, rental manufactured/mobile home communities, and leasehold offerings of one year or less.

Residential developments fitting within these exceptions have become increasingly popular as a way to avoid state water regulations, because they can be approved by Arizona cities and towns without having to show an assured water supply. 

Town staff prepared and presented to Council an initial draft Ordinance that formally sets out this policy. The item was discussion only and will be placed on a later Council agenda for a vote. 

While this proposed policy places the Town at risk for litigation from developers who don’t believe their project requires an assured water supply, Town officials believe it is worth the risk to protect the Town’s water resources, to demonstrate a substantive commitment to the Town’s water conservation and to work with developers to create a responsible path forward.