Agriculture was the main driver of development along the Colorado River. According to a recent report from the U.S. Geological Survey, 85 percent of water withdrawals went toward irrigation between 1985 and 2010 (Maupin 2018). The fields around Yuma, Arizona, and the Imperial and Palo Verde valleys of California consume more than 4 million acre-feet of Colorado River water annually, nearly a third of the river’s annual flows. But with population growth, water use has shifted to urban needs.

In Colorado, for example, 95 percent of water imported from the Colorado River headwaters through the Colorado-Big Thompson (CBT) project was once used for agriculture; now, that number is closer to 50 percent. As another example of the complexity of systems in the Colorado River Basin, CBT water is divided into units which can be bought and sold. The amount of water in a unit varies year to year depending on the total amount of water available; when CBT is at full capacity, a unit is one acre-foot. Agricultural users owned 85 percent of the units when trading began in the late 1950s, but currently own less than one-third of available units. Municipalities own the balance, but often lease the water to farms until it’s needed. The current price for a CBT unit is close to $30,000.

Such water-sharing agreements are becoming more common in a system stretched too thin. Rotational fallowing, also known as lease-fallowing or alternative-transfer mechanisms, has played a role in shifting water from farms to cities. Farmers in the Palo Verde Valley struck a deal with the Metropolitan Water District of Southern California, which serves 19 million customers, to fallow between 7 and 35 percent of their land on a rotating basis. Metropolitan’s customers, in turn, get the water, which can be stored in Lake Mead. Similar deals, still underlined with tension but increasingly accepted, exist between Southern California municipalities and farmers in the Imperial Valley and between cities and farmers along Colorado’s Front Range urban corridor.

For their part, cities tend to tout conservation and development efforts they’ve made with water in mind. Many are encouraging density, reducing the water needed for landscaping; some have implemented turf-removal programs; and toilets, showers and other fixtures have become more efficient. Metropolitan Water District of Southern California chalked up a 36 percent per capita reduction in water use from 1985 to 2015, a time of several droughts, according to Planning magazine (Best 2018).

In Nevada, the population served by the Southern Nevada Water Authority has increased 41 percent since 2002, but the per capita consumption of Colorado River water fell 36 percent. The agency’s Colby Pellegrino, speaking at a September 2018 conference called “Risky Business on the Colorado River,” said conservation is the first, second, and third strategy for achieving reduced water consumption. “If you live in the Las Vegas Valley, where there is less than 4 inches of rainfall a year, and you have a median covered in turf, and the only person walking on that turf is the person pushing a lawn mower—that is a luxury our community cannot afford, if we want to continue to have the economy we have today,” she said.

Economy, culture, and values have been at the core of the basinwide debate about how to respond to the drought. No one sector or region can absorb the full burden of necessary reductions, and it’s clear that everyone must begin to think differently. Speaking at the “Risky Business” conference, Andy Mueller, general manager of the Colorado River Water Conservation District, put it this way: Instead of the intentional use of water, Colorado is now talking about the intentional non-use of water. As is everyone who lives and works in the Colorado River Basin.

This content is excerpted from the article “Hydraulic Empire” published December 14, 2018.

Allen Best writes about water, energy, and other topics from a base in metropolitan Denver, where 78 percent of his water comes from the Colorado River Basin.

Photograph: On a farm in Yuma, Arizona. Credit: Amy Martin, courtesy of American Rivers.

References

Arizona Daily Star. 1998. “Don’t Ignore Colorado Delta.” May 6, 1998.

Best, Allen. 2018. “Water Pressure: Smart Management Is Key to Making Sure Inland Cities Aren’t Left High and Dry in the Face of a Warming Climate.” Planning August/September: 40–45. https://www.planning.org/login/?next=/planning/2018/aug/waterpressure/.

Maupin, Molly A., Tamara Ivahnenko, and Breton Bruce. 2018. “Estimates of Water Use and Trends in the Colorado River Basin, Southwestern United States, 1985–2010.” Reston, Virginia: U.S. Geological Survey. https://pubs.er.usgs.gov/publication/sir20185049.

For six centuries, a people called the Hohokam inhabited central Arizona. Among their many accomplishments, they created a hydraulic empire of sorts, a spiderlike web of canals intended to deliver water from the Gila and Salt rivers—tributaries of the mighty Colorado—to their agricultural fields. Eventually, the Hohokam abandoned their fields and canals. To this day, the reason is uncertain, but historian Donald Worster once surmised that the productive but ill-fated tribe “suffered the political and environmental consequences of bigness” (Worster 1985).

Bigness. It’s the perfect word to describe not only the Colorado River Basin, but so much of the geography, history, culture, politics, and challenges associated with it.

In its sheer complexity, the Colorado stands out among the rivers of America, and probably the world. In this river basin of 244,000 square miles, one-twelfth the land mass of the continental United States, exist great diversities, places of oven-hot heat and icy vastness. All but 2,000 of those square miles lie in the United States. Just 10 percent of that land mass, mostly in an elevation band of 9,000 to 11,000 feet in the Rocky Mountains, produces 90 percent of the water in the system.

Hydraulic infrastructure abounds at almost every turn on the river’s 1,450-mile journey. The first diversions occur at its very headwaters in Rocky Mountain National Park, before the river can rightfully be called a creek. Fourteen dams have been erected on the Colorado River, and hundreds more on its tributaries. Hoover Dam, perhaps the best known, hulks a half-hour drive from Las Vegas. The U.S. Bureau of Reclamation (USBR) built it in the 1930s to hold back the river’s spring floods, creating a reservoir now known as Lake Mead. A second massive reservoir, Lake Powell, lies upstream 300 miles. It’s the result of Glen Canyon Dam, built in the 1960s with the goal of providing a means for the four Upper Basin states—Colorado, New Mexico, Utah, and Wyoming—to store the water they had agreed to deliver to the Lower Basin states of Arizona, California, and Nevada, and to Mexico.

At their fullest, the two reservoirs—which are the biggest in the country—can hold four years of flows of the Colorado River. A recent paper suggested that the two reservoirs could be considered one giant reservoir, bisected by a “glorious ditch” (CRRG 2018). That ditch is the Grand Canyon, which celebrates the one hundredth anniversary of its designation as a national park this year.

The dams, reservoirs, tunnels, and aqueducts of the Colorado deliver water to 40 million people in seven U.S. states—more than 1 in 10 Americans—and two Mexican states. The river’s water also nourishes more than 5.5 million acres of agricultural fields within and outside the river basin. Residents of Denver, Los Angeles, and other cities outside the basin rely on the river; crops in fields reaching almost to Nebraska benefit from transbasin exports and diversions.

The river provides a cultural and economic resource for 28 tribes within the basin. A $1.4 trillion economy hums along in and around the basin. This includes the snowmaking cannons at Vail and Aspen, the nightly water spectacle at the Bellagio in Las Vegas, and the aeronautics industry of Southern California. Up and down the river, more than 225 federal recreation sites draw visitors eager to try their luck at fishing, rafting, hiking, or just taking in the sights. This river and the lands around it loom large in the public imagination.

It’s a big, complicated, and now vulnerable hydraulic web. Entering the twenty-first century, the river was already a sponge fully squeezed, its water rarely making it to the Gulf of California.

Rapid population growth, rising temperatures, and declining river flows are putting pressure on the system, forcing river managers and users to devise creative, forward-looking plans that consider both water and land. The Lincoln Institute’s Babbitt Center for Land and Water Policy strongly encourages this approach. “We are trying to think more holistically by considering the management and planning of land and water resources together,” says Babbitt Center Program Manager Faith Sternlieb. “These are the foundations upon which water policy in the Colorado River Basin has been considered and crafted, and these are the roots we must nurture for a sustainable water future.” 

Taming the Colorado

The need to nurture roots has driven the development of the Colorado River Basin since the first people began farming there. The Hohokam, Mojave, and other tribes built canal systems of varying complexity to irrigate their fields. In the late 1800s, federal interest in tapping the river to boost agricultural production surged. By 1902, the U.S. Department of the Interior (DOI) had created what is now the Bureau of Reclamation. During the twentieth century, the Bureau became the prime builder, and funder, of agricultural water projects throughout the basin.

Work on the Laguna Diversion Dam, the first dam on the Colorado River, began in 1904, yielding water a few years later for fields near Yuma, Arizona. Yuma sits in the Mojave Desert, where Arizona, California, and Mexico come together. There, long, nearly frost-free growing seasons coupled with fertile soils and Colorado River water enable extraordinary productivity. Today, farmers in the Yuma area of Arizona and Imperial Valley of California proclaim that during winter they grow 80 to 90 percent of the greens and other vegetables in the United States and Canada. This area, declares Arizona’s Yuma County Agriculture Water Coalition, is to U.S. agriculture what Silicon Valley is to electronics and what Detroit was to automobiles (YCAWC 2015).

All told, irrigation accounted for 85 percent of total water withdrawals in the basin between 1985–2010 (Maupin 2018). Today, agriculture still accounts for 75 to 80 percent of total water withdrawals. This supports row crops such as corn and the perennial crop of alfalfa, which is grown from Wyoming to Mexico. Much of the crops go to livestock: The Pacific Institute, in a 2013 report, estimated that 60 percent of agricultural production in the basin feeds beef cattle, dairy cattle, and horses (Cohen 2013). Agriculture has always been, and will remain, a key piece of the Colorado River puzzle.

But almost as quickly as the Bureau of Reclamation began diverting water for agriculture, other needs arose, from producing electricity to slaking the thirst of booming Los Angeles. By the early 1920s, the seven states of the arid West realized they had to find a way to share a river that would become—as the river’s preeminent historian, the late Norris Hundley, would later write—“the most disputed body of water in the country and probably in the world” (Hundley 1996). Years later, Hundley famously referred to the area as a “basin of contention” (Hundley 2009).

Today, dozens of laws, treaties, and other agreements and rulings collectively called the Law of the River govern the use of Colorado River Basin water. They include federal environmental laws, a treaty over salinity, amendments to treaties, a U.S. Supreme Court case, and interstate compacts. None is more fundamental than the Colorado River Compact of 1922, which still guides the annual share of water each state gets. Representatives of the seven basin states hammered out its provisions in grueling meetings held near Santa Fe. They were driven by both ambition and fear.

Ambitious California needed federal muscle to tame the Colorado River if it was to realize its agricultural potential. Los Angeles had aspirations, too. In the century’s first two decades, it had grown more than 500 percent and wanted the electricity that a large dam on the river could deliver. A few years later, it also decided it wanted the water itself. To pay for this giant dam, California needed federal help. Congress would approve that aid only if California had secured support from the other southwestern states.

Fear drove the other basin states. If the first-in-time, first-in-right legal system of prior appropriation used by Western states was to be applied to the Colorado River, California and perhaps Arizona would reap the benefits. The headwaters states, including Colorado, were developing too slowly to benefit from their own long and snowy winters. Delph Carpenter, a Colorado farm boy turned water lawyer, forged the consensus. Both basins, upper and lower, got 7.5 million acre-feet, for a total of 15 million acre-feet. Mexico needed water, too, which the compact assumed would come from surplus waters. A later treaty between the two nations specified 1.5 million acre-feet for Mexico.

The 1922 Colorado River Compact also nodded, but no more, at what later writers called a sword of Damocles hanging over these allocations: water for the basin’s Indian reservations. The U.S. Supreme Court, in a 1908 case called Winters v. United States, had declared that when Congress reserved land for a reservation, it implicitly reserved water sufficient to fulfill the purpose of that reservation, including agriculture. That ruling did not determine the amounts that were needed. Tribal water rights within the basin now constitute 2.4 million acre-feet, in many cases senior in priority to all other users within the allocations of the individual states. That’s a fifth of the river’s total flows. Importantly, specific water allocations for some of the largest tribes still have not been resolved.

The framers of the 1922 compact made a big, fatally flawed assumption: That enough water existed to meet everyone’s needs. Average annual flows from 1906 to 1921 had averaged 18 million acre-feet. But even by 1925, just three years after the Compact came into being and three years short of its Congressional approval, a U.S. Geological Survey scientist named Eugene Clyde La Rue had delivered a report indicating the river probably would deliver too little water to meet these hopes and expectations. Other studies about the same time delivered the same conclusions.

They were right. Over a longer period, from 1906 to 2018, the river has averaged 14.8 million acre-feet per year. Averages have dropped during the twenty-first century, in the midst of a 19-year drought, to 12.3 million acre-feet. In the last water year, ending in September 2018, the river carried only 4.6 million acre-feet. That’s just 200,000 more acre-feet than California’s annual entitlement.

The Shift from Farms to Cities

Agriculture was the main driver of development along the Colorado River. According to a recent report from the U.S. Geological Survey, 85 percent of water withdrawals went toward irrigation between 1985 and 2010 (Maupin 2018). The fields around Yuma, Arizona, and the Imperial and Palo Verde valleys of California consume more than 4 million acre-feet of Colorado River water annually, nearly a third of the river’s annual flows. But with population growth, water use has shifted to urban needs.

In Colorado, for example, 95 percent of water imported from the Colorado River headwaters through the Colorado-Big Thompson (CBT) project was once used for agriculture; now, that number is closer to 50 percent. As another example of the complexity of systems in the Colorado River Basin, CBT water is divided into units which can be bought and sold. The amount of water in a unit varies year to year depending on the total amount of water available; when CBT is at full capacity, a unit is one acre-foot. Agricultural users owned 85 percent of the units when trading began in the late 1950s, but currently own less than one-third of available units. Municipalities own the balance, but often lease the water to farms until it’s needed. The current price for a CBT unit is close to $30,000.

Such water-sharing agreements are becoming more common in a system stretched too thin. Rotational fallowing, also known as lease-fallowing or alternative-transfer mechanisms, has played a role in shifting water from farms to cities. Farmers in the Palo Verde Valley struck a deal with the Metropolitan Water District of Southern California, which serves 19 million customers, to fallow between 7 and 35 percent of their land on a rotating basis. Metropolitan’s customers, in turn, get the water, which can be stored in Lake Mead. Similar deals, still underlined with tension but increasingly accepted, exist between Southern California municipalities and farmers in the Imperial Valley and between cities and farmers along Colorado’s Front Range urban corridor.

For their part, cities tend to tout conservation and development efforts they’ve made with water in mind. Many are encouraging density, reducing the water needed for landscaping; some have implemented turf-removal programs; and toilets, showers and other fixtures have become more efficient. Metropolitan Water District of Southern California chalked up a 36 percent per capita reduction in water use from 1985 to 2015, a time of several droughts, according to Planning magazine (Best 2018).

In Nevada, the population served by the Southern Nevada Water Authority has increased 41 percent since 2002, but the per capita consumption of Colorado River water fell 36 percent. The agency’s Colby Pellegrino, speaking at a September 2018 conference called “Risky Business on the Colorado River,” said conservation is the first, second, and third strategy for achieving reduced water consumption. “If you live in the Las Vegas Valley, where there is less than 4 inches of rainfall a year, and you have a median covered in turf, and the only person walking on that turf is the person pushing a lawn mower—that is a luxury our community cannot afford, if we want to continue to have the economy we have today,” she said.

Economy, culture, and values have been at the core of the basinwide debate about how to respond to the drought. No one sector or region can absorb the full burden of necessary reductions, and it’s clear that everyone must begin to think differently. Speaking at the “Risky Business” conference, Andy Mueller, general manager of the Colorado River Water Conservation District, put it this way: Instead of the intentional use of water, Colorado is now talking about the intentional non-use of water. As is everyone who lives and works in the Colorado River Basin.

A River Shared

In late 1928, Congress approved the Boulder Canyon Project Act. This legislation accomplished three significant things: It authorized construction of a dam in Boulder Canyon, near Las Vegas, which was later named Hoover Dam. The law also authorized construction of the All American Canal, crucial for developing the productive farmland of California’s Imperial Valley, an area that’s now the single largest user of Colorado River water. And the Boulder Canyon Project Act divided waters among the Lower Basin states: 4.4 million acre-feet each year to California, 2.8 million acre-feet to Arizona, and 300,000 acre-feet for Nevada. Las Vegas then had a population of fewer than 3,000 people.

As the twentieth century rolled on, headwaters states also got dams, tunnels, and other hydraulic infrastructure. In 1937, Congress agreed to bankroll the Colorado-Big Thompson Project, what historian David Lavender called a “massive violation of geography” intended to divert Colorado River waters to farms in northeastern Colorado, outside of the hydrological basin. In 1956, Congress approved the Colorado River Storage Project Act, authorizing a handful of dams, including Glen Canyon.

Only Arizona remained left out. It had vigorously opposed the 1922 compact, then remained defiant. Its Congressional representatives opposed Hoover Dam and, in 1934, then-Governor Benjamin Moeur even dispatched the state’s National Guard in a showy opposition to construction of another dam being built downstream to deliver water to Los Angeles. “Put simply, Arizonans feared there would be little water remaining for them after the Upper Basin, California, and Mexico got what they wanted,” Hundley explains (Hundley 1996). Finally, in 1944—the same year the U.S. and Mexico reached an agreement about the amount of water due to the latter—Arizona legislators succumbed to political realities. Cooperation, not confrontation, would be needed for the state to get federal help to develop its share of the river. At last, the compact had the signatures of all seven states.

Arizona finally got its big slice of Colorado River pie in the 1960s. A U.S. Supreme Court decision in 1963—one in a series of Arizona vs. California cases over many decades—confirmed Arizona had the right to 2.8 million acre-feet, as Congress had specified in 1928, along with all the water in its own tributaries. This is what Arizona had wanted all along. In 1968, Congress approved funding for the massive Central Arizona Project, ultimately resulting in the construction of 307 miles of concrete canal to deliver water from Lake Havasu to Phoenix and Tucson and farmers between. California supported the authorization, with a hitch: In times of shortage, it would still have rights to its 4.4 million acre-feet first. This led Arizona to later create a water banking authority to store Colorado River in underground aquifers, providing at least partial security against future shortages.

Upper Basin states had reached accord about how to apportion their 7.5 million acre-feet without notable friction: Colorado 51.75 percent, Utah 23 percent, Wyoming 14 percent, and New Mexico 11.25 percent. They used percentages, as Hundley explained, because of “uncertainty over how much water would remain after the upper basin had fulfilled its obligation to the lower-basin states” and Mexico. Fluctuations in the river’s flow, they reasoned, might mean that some years they had an amount smaller than 7.5 million acre-feet to divide between themselves. It was, in retrospect, an eminently wise decision.

Conservation Concerns

The same year the basin states framed the original Colorado River Compact, the great naturalist Aldo Leopold canoed through the Colorado River Delta in Mexico. In an essay later published in A Sand County Almanac, he described the delta as “a milk and honey wilderness.” The river itself was “nowhere and everywhere,” he wrote, and was camouflaged by a “hundred green lagoons” in its leisurely journey to the ocean. Six decades later, visiting the delta after a half-century of feverish engineering, construction, and management had emerged to put the river’s waters to good use, the journalist Philip Fradkin had a different take. He called his book A River No More.

As the 20th century closed, the environmental impacts of essentially regarding a river as plumbing drew new attention, especially in the now dewatered delta. The lagoons that had so enchanted Leopold were gone, because the stopped-up river no longer reached its southern outlet. Drainage from vast agricultural enterprises had made the river so saline that, among other things, Mexico protested that the water it was receiving was unfit to use. The many dams and diversions that came after Leopold’s visit had also put 102 river-dependent rare birds, fish, and mammals on the brink of extinction, reported the Arizona Daily Star. The newspaper lauded the work of stakeholders in a new transborder conservation effort: “The fundamental principle of ecology calls for land managers to look to the good of the whole system, not just its parts.”

Environmental groups might have used the Endangered Species Act to force the argument about solutions, but the delta was not within the United States. So they looked to find collaborative solutions. In the closing days of the tenure of Bruce Babbitt, secretary of the Interior in the Clinton administration and namesake of the Babbitt Center, the two countries adopted Minute 306. It created the framework for a dialogue that produced, under Babbitt’s successors in the Bush administration, an agreement called Minute 319 and a one-time pulse flow of more than 100,000 acre-feet in the river in 2014.

Children gleefully splashed in the rare waters of the river in Mexico during that pulse flow, but adults on both sides of the border were equally happy. Among those grinning was Jennifer Pitt, then of the Environmental Defense Fund. Litigation had been a possible route, she said, but an inclusive and transparent process with stakeholders was more productive.

“The institutional legal and physical framework we have on the Colorado River is the basis for great competition and the potential for litigation between parties,” says Pitt, who is now with Audubon. “But it is exactly that same framework that has given those parties the opportunity to collaborate as an alternative to having solutions handed to them by a court.”

Collaboration Is Critical

Reservoirs were full as the next century arrived, thanks to robust snowfall in the Rockies during the 1990s. Still, there was tension. California for decades had exceeded its apportionment of 4.4 million acre-feet, consuming a high of 5.4 million acre-feet in 1974. Upper Basin states never have fully developed their 7.5 million acre-feet, averaging 3.7 to 4 million since the 1980s, plus 500,000 acre-feet from reservoir evaporation.

Then came drought, deep and extended. The river carried just 69 percent in 2000. The winter of 2001 to 2002 was even more stingy, the river delivering just 5.9 million acre-feet, or 39 percent of average, at Lake Powell. From 2000 to 2004 was the lowest 5-year cumulative flow in the observed record. Since then, more years have been dry than wet. The reservoir levels are at near-record lows.

The 1922 compact had not contemplated this kind of long-term drought. A structural deficit came into sharp relief. Tom McCann, assistant general manager of the Central Arizona Project, coined the phrase. Very simply, the Lower Basin states were using more water than was delivered from Lake Powell each year. This was so even when the Bureau of Reclamation authorized the release of extra “equalization” flows from Powell.

“Equalization releases are like hitting the jackpot on the slot machine,” McCann says. “Back then, we were hitting the jackpot every three or four or five years, and we thought we had nothing to worry about.” Even with the jackpots, Lake Mead continued to decline, the reservoir’s widening bathtub ring charting the losses.

Climate change overlays the structural deficit. Scientists argue that warming temperatures swing a big bat in the Colorado River Basin. They term the early-twenty-first-century declines a “hot drought” as distinguished from a “dry drought.”

The prospect of this new, human-induced “hot” drought on top of a conventional drought worries many. Tree-ring studies show that the region has suffered longer, deeper droughts in the past, before measurements began. “A number of folks claim that the current 19-year period of 2000 to 2018 is the driest 19-year period on the Colorado River,” says Eric Kuhn, former general manager of the Colorado River Water Conservation District. “Nonsense. It’s not even close. If these past droughts were to happen with today’s temperatures, things could be much worse.”

The first two decades of the new millennium have seen a series of efforts to confront this new reality. In 2007, the Department of the Interior issued interim shortage guidelines, the first formal response to the drought. The Bureau of Reclamation released a Basin Supply and Demand Study in 2012, an exhaustive effort to provide a platform for future decisions. The many reports stacked tall enough to fill a box that could ship a football. They discussed population growth, rising temperatures, and the impact of increasing rain on snowpack. Demand, the study concluded, would exceed supply by 3.2 million acre-feet by 2060 (USBR 2012).

“You can argue about the numbers, you can argue about the forecast, but it was something that got everybody’s attention,” says Colorado’s Anne Castle, who was then assistant secretary of Interior for water and science. “It served as a catalyst to focus the discussion about Colorado River management more directly in dealing with future scarcity.”

Castle sees the basin now struggling to find collaborative solutions. “In a complex water system, there are so many moving parts, it’s not about one answer,” she says. “You have to manage a complex system, and you can only do that through negotiated agreements.”

Those negotiations are happening now, in the form of drought contingency planning. Even as scarcity has become more prominent, collaboration has also grown. But the measuring stick for success may well be the white mineralized walls of Lake Mead, a big reservoir in a big basin facing big challenges. Now the seven states, the tribes, and the governments of the U.S. and Mexico, with input from environmental and other nongovernmental organizations, must figure out how to keep those water levels from sagging even more. They must concoct a plan that ensures a sustainable future, while heeding the twists and turns of the past.

Allen Best writes about water, energy, and other topics from a base in metropolitan Denver, where 78 percent of his water comes from the Colorado River Basin.

Photograph: Lake Powell at Glen Canyon Dam. Credit: Pete McBride.

References

Arizona Daily Star. 1998. “Don’t Ignore Colorado Delta.” May 6, 1998.

Best, Allen. 2018. “Water Pressure: Smart Management Is Key to Making Sure Inland Cities Aren’t Left High and Dry in the Face of a Warming Climate.” Planning August/September: 40–45. https://www.planning.org/login/?next=/planning/2018/aug/waterpressure/.

Cohen, Michael, Juliet Christian-Smith, and John Berggren. 2013. Water to Supply the Land: Irrigated Agriculture in the Colorado River Basin. Oakland, CA: Pacific Institute. (May). http://pacinst.org/publication/water-to-supply-the-land-irrigated-agriculture-in-the-colorado-river-basin/.

CRRG (Colorado River Research Group). 2018. “It’s Hard to Fill a Bathtub When the Drain is Wide Open: The Case of Lake Powell.” Boulder, CO: Colorado River Research Group. (August). https://www.coloradoriverresearchgroup.org/uploads/4/2/3/6/42362959/crrg_the_case_of_lake_powell.pdf.

Fradkin, Philip. 1996. A River No More: The Colorado River and the West. Oakland, CA: University of California Press.

Hundley, Norris Jr. 1996. “The West Against Itself: The Colorado River—An Institutional History.” In New Courses for the Colorado River: Major Issues for the Next Century, ed. Gary D. Weatherford and F. Lee Brown. Albuquerque, NM: University of New Mexico Press. http://web.sahra.arizona.edu/education2/hwr213/docs/Unit1Wk4/Hundley_CRWUA.pdf.

———. 2009. Water in the West: The Colorado River Compact and the Politics of Water in the American West. Oakland, CA: University of California Press.

Leopold, Aldo. 1949. A Sand County Almanac: And Sketches Here and There. New York, NY: Oxford University Press.

Maupin, Molly A., Tamara Ivahnenko, and Breton Bruce. 2018. “Estimates of Water Use and Trends in the Colorado River Basin, Southwestern United States, 1985–2010.” Reston, Virginia: U.S. Geological Survey. https://pubs.er.usgs.gov/publication/sir20185049.

USBR (U.S Bureau of Reclamation). 2012. “Colorado River Basin Supply and Demand Study.” Washington, D.C.: U.S. Department of Interior. https://www.usbr.gov/lc/region/programs/crbstudy/finalreport/Study%20Report/CRBS_Study_Report_FINAL.pdf.

Worster, Donald. 1985. Rivers of Empire: Water, Aridity, and the Growth of the American West. New York, NY: Pantheon Books.

YCAWC (Yuma County Agriculture Water Coalition). 2015. “A Case Study in Efficiency: Agriculture and Water Use in the Yuma, Arizona Area.” Yuma, AZ: Yuma County Agriculture Water Coalition. (February). https://www.agwateryuma.com/wp-content/uploads/2018/02/ACaseStudyInEfficiency.pdf.

As U.S. cities struggle to provide adequate infrastructure and affordable housing, many are underutilizing one of their greatest assets: the land on which they sit. Cities generate large increases in the value of land when they change zoning regulations to enable new development or invest in public works projects, but private landowners typically capture the value as windfall profits.

The auction of development rights offers an innovative, market-based tool that can help cities to recover land value for public benefit. In a new Lincoln Institute working paper, Julie Kim of the NewCities Foundation and Stanford University’s Global Projects Center explores the use of this tool internationally and the potential for its implementation in the United States, especially for transit-oriented development.

“Big problems call for big solutions, and big solutions require big and innovative thinking,” Kim writes.

Kim focuses on Brazil’s largest city, São Paulo, which has issued tradeable development rights called Certificates of Additional Construction Potential (CEPACs, pronounced “see-packs”) for more than a decade. Issued in conjunction with major rezoning and redevelopment projects, these certificates have generated nearly $3 billion in two neighborhoods alone. The city has used the revenue to build a bridge, extend a metro line and a major avenue, and create affordable housing in the same districts where the redevelopment took place.

How CEPACs work

Beginning in the 1990s, São Paulo designated a number of neighborhoods as special redevelopment zones. The city changed the zoning and land use regulations to allow for more dense development and planned for infrastructure projects that would help attract private investment. In a few of the neighborhoods, the city created tradeable CEPACs, which each permit the owner to create a specified amount of development, typically about 10 square feet, up to an allowed maximum.

The city has sold CEPACs at dozens of public auctions, and developers have gladly purchased the certificates, recognizing that the rezoning and the infrastructure funded by the CEPACs made their projects more valuable. For São Paulo, the CEPACs are a tool that allows the city to specify the amount of new development it wants and generate revenue while allowing the real estate market to determine the potential value of plots in the redeveloped area.

The advantages for U.S. cities

For U.S. cities, the auction of development rights could be an effective complement to traditional public-private partnerships (or P3s), in which the private sector builds new infrastructure in exchange for the right to future revenues—highway tolls, for example—or more direct forms of repayment by the city. P3s can be an efficient way for cities to deliver and finance infrastructure, but taxpayers or infrastructure users must ultimately repay the cost. CEPACs, by contrast, can generate revenues for repayment.

The São Paulo model also has advantages over tax increment financing, or TIF, in which cities earmark property tax revenues for economic development to encourage private investment, which in turn helps to grow the tax base. Studies have found that TIF often does not accomplish the intended economic development goal, but, more importantly, TIF does not create a new source of revenue beyond the property tax. CEPACs, by contrast, generate new revenues immediately while also expanding the property tax base for the future.

CEPACs may be most similar to exactions, the monetary payments or public amenities that U.S. cities sometimes collect in exchange for approving development projects. However, unlike CEPACs, these exactions often require lengthy, unpredictable negotiations, which vary depending on the developer’s political relationships.

Finally, CEPACs bring a new player—the private investor—into the infrastructure market, which can help spread out the risks and rewards of projects more widely.

The U.S. experience so far

There is ample precedent in the United States for tapping the value of development rights. Many cities allow for the transfer of development rights as a tool to protect historic landmarks or create parks and open space. Policies vary, but in general owners of properties that are restricted from being developed can sell unused development rights to others who want to build nearby. The buyer of the development rights sometimes pays a portion of the proceeds to fund transit or other public improvements.

Like São Paulo, New York City has integrated the sale of development rights into land use planning for specific neighborhoods. For example, the city recently rezoned the area surrounding Grand Central Terminal and relaxed its rules to allow for the sale of development rights throughout an 80-block area. The city will collect a 20-percent fee for each sale to help fund renovations of subway stations, new plazas, pedestrian- and bicycle-friendly street upgrades, and other public improvements.

The auction of development rights could become increasingly attractive as U.S. cities seek to densify to address environmental challenges, traffic problems, and the lack of affordable housing.

“The up-zoning incentives that underlie CEPACs may be just the catalyst needed to trigger robust transit-oriented development projects in major U.S. cities that have yet to be materialized,” writes Kim.

Photograph Credit: Virtual VV (Getty Images)

 
A flurry of integrated land and water activity occurred after passage of the Colorado Water Plan in 2015, but the work actually had begun years before. Beginning in 2010, leaders from the Colorado Water Conservation Board and the state Department of Local Affairs, the Lincoln Institute, the Sonoran Institute, Pace University Land Use Law Center, and the Keystone Policy Center came together for the Colorado Water and Growth Dialogue. They developed a stakeholder group that also includes city and county planners, water specialists, and public officials, the Denver Regional Council of Governments, the Rocky Mountain Land Use Institute, Western Resource Advocates, water utilities, universities, environmental organizations, and others. A core group of stakeholders has evolved as the Colorado Land and Water Planning Alliance to continue the Dialogue’s research and training in land and water planning. The Lincoln Institute, through their Babbitt Center for Land and Water Policy, is providing both financial and technical assistance for Alliance efforts.

In 2016, the Keystone Policy Center, with support from the Lincoln Institute and the Sonoran Institute, hosted a scenario-planning program for Front Range stakeholders focused on integrating land and water planning. The goal was to develop strategies to reduce water demand and close Colorado’s water gap. The key question: How can changes in urban form and landscaping practices assist in meeting future urban water demand along the Front Range?

Ray Quay of Arizona State University’s Decision Center for a Desert City, who is a former assistant planning director and assistant water services director in Phoenix, presented his Denver-area study of water use across densities, building types, and landscaping practices as part of the program. The study found that the maximum reduction in water use achievable by increasing density was in the range of 20 percent, with a 10 percent reduction achievable by modest density increases; and it found that local governments could achieve the same levels of reduction through outdoor water restrictions, landscape codes, and irrigation practices, with much greater certainty.

The upshot for integrated land and water planning, says Quay: “Water supplies are limited, and . . . with growth you’re going to need more water. You can’t support growth on the conservation of water.” Communities need to focus on what type of growth and economy they want, he says, and how to allocate water supplies for the growth they expect. And fundamentally, he concludes, “they need to do that before they need water.”

The work of all the partners involved in these conversations has “moved the needle” and helped create a consensus on the need for integrated land and water planning statewide, says Matt Mulica, policy facilitator for the Keystone Policy Center. He says the Dialogue’s exploratory scenario planning and a Keystone report on the process have helped communities with strategies such as planning for higher density, developing new metrics on water and land use, and offering incentives for compact development and low-water landscapes. The Pace Land Use Law Center’s Land Use Leadership Alliance, the Colorado chapter of the American Planning Association, and the Boulder-based environmental nonprofit Western Resource Advocates also have offered training on issues such as comprehensive plans that designate priority areas for growth and conservation, water-efficient land-use development patterns, cluster and infill development, and urban growth boundaries.

This content is excerpted from the article “Grow with the Flow,” published November 27, 2018.

Kathleen McCormick, principal of Fountainhead Communications in Boulder, Colorado, writes frequently about healthy, sustainable, and resilient communities.