Arizona lawmakers are proposing a significant shift in how multifamily housing is approved in the Prescott Active Management Area (AMA).
Here’s what real estate investors need to know.
What HB 2077 Does
- Requires new multifamily residential developments in the Prescott AMA to demonstrate an assured water supply before receiving building permits.
- Applies to multifamily projects with six or more units.
- Developers must provide:
- A written commitment of water service from a provider with a designated assured water supply, or
- An Assured Water Supply Certificate from the Arizona Department of Water Resources.
- Projects with prior zoning entitlements before the effective date are exempt.
Why This Matters
- Single-family subdivisions already must show a 100-year assured water supply.
- Some multifamily projects have not been subject to the same requirement.
- HB 2077 removes that distinction in the Prescott AMA.
Investor Implications
- Could increase development timelines and compliance costs for multifamily builders.
- May reduce multifamily supply growth in affected areas.
- Could strengthen long-term water planning and reduce risk of future development moratoriums.
- Impacts Prescott region directly — not Maricopa or Pinal County (for now).
Big Picture
Arizona continues to tighten water policy in certain regions. While this bill is geographically limited, it reflects the broader policy environment around groundwater, growth, and development.
For investors, supply constraints in one region often shift pressure elsewhere — particularly toward markets with more predictable development pipelines.