As demand for water among city and suburban builders outpaces dwindling supply, some investors are buying thousands of acres of farmland in rural Southwestern regions to support residential construction projects hundreds of miles away.
Water-focused investors are becoming more active as reservoirs along the Colorado River and throughout the West succumb to drought within a changing climate. According to The Arizona Republic, Greenstone and related investors bought over 8,000 acres of farmland in three Arizona counties throughout recent years, sparking debates among local landowners with even more valuable water rights.
Here along the western edge of Arizona, the investment company Greenstone bought 485 acres of farmland and now awaits federal approval to sell most of its water entitlement from the land to the town of Queen Creek, one of the fastest-growing suburbs in Arizona.
The Republic’s review of county property records in Arizona revealed that two other water-focused investment companies, Water Asset Management and Vidler Water Company, own agricultural lands totaling about 8,642 acres in several areas of the state. These same companies have bought land and water rights in places across the West, amassing a growing list of investments in Colorado, Nevada, California, New Mexico and Idaho.
The surge of investments in farmland with the primary purpose of selling water has kindled emotional debates about whether the deals will dry up farming towns. On one side are those who argue that landowners should be able to sell water and that free-market forces hold promise to reallocate scarce water supplies. On the other are people who argue that a public resource shouldn’t be sold like a commodity for easy millions and that these profit-driven deals will fuel more urban growth at the expense of rural communities.