water; residential lease communities

HB 2697 requires municipalities and county boards to deny building permits for new residential lease communities (defined as six or more detached homes offered under a common lease plan) in water-stressed areas unless applicants provide proof of water supply. Specifically, applicants must obtain a certificate of assured water supply from Arizona’s Department of Water Resources or a written commitment from a designated water provider, and pay required fees. The law exempts existing communities or those that applied for zoning entitlements by September 30, 2025. It directly affects developers and property owners planning new multi-unit lease properties in designated water management areas. The bill aims to ensure new developments have verified water access before construction begins.