Kathleen Ferris stared across a desert valley dotted with creosote bushes, wondering where the water will come from to supply tens of thousands of new homes. In the distance, a construction truck rumbled along a dirt road, spewing dust.

This tract of open desert west of Phoenix is slated to be transformed into a sprawling development with up to 100,000 homes—a 37,000-acre property that the developers say will become Arizona’s largest master-planned community.

“It’s mind-boggling,” Ferris said. “I don’t think there is enough water here for all the growth that is planned.”

Water supplies are shrinking throughout the Southwest, from the Rocky Mountains to California, with the flow of the Colorado River declining and groundwater levels dropping in many areas. The mounting strains on the region’s water supplies are bringing new questions about the unrestrained growth of sprawling suburbs.

Ferris, a researcher at Arizona State University’s Kyl Center for Water Policy, is convinced that growth is surpassing the water limits in parts of Arizona, and she worries that the development boom is on a collision […]