Even as Corpus Christi residents have been told they can’t water their lawns, an $800 million housing development is under construction in the coastal city. Similar scenarios have played out in other Texas cities such as Magnolia where concerns about water supply and potential contamination halted new construction only to have permitting resume eight months later.
Critics scream about the apparent desire from city governments to create economic development and population growth while reservoirs reach dangerous lows. But environmentalists say it turns out that housing projects aren’t the biggest culprit. Multimillion-dollar data centers and oil and gas industrial compounds are placing the most demand on municipal water supply.
During a June 23 Corpus Christi City Council meeting, water department announced that recent rains have provided a nine-month reprieve on the water crisis, now expected to hit emergency status — where demand is within six months of exceeding the projected supply — in September 2027 rather than December of this year.
But even before the council got the news that its reservoirs, which recently dipped to a dangerous 10 percent capacity, got a top-off, its members were approving new construction.
Critics say it’s not worth a little property tax revenue to add more development and burden the already strained resources. When Magnolia was facing a supply shortage and water that residents believed was contaminated last year, the city council imposed an eight-month moratorium on new construction. Residents said at the time that builders would go around the moratorium by agreeing to dig their own water wells.
Laredo, McAllen, Brownsville, Harlingen and other Rio Grande Valley cities that have faced severe drought conditions this year have implemented water restrictions, but building moratoriums are uncommon.
The small Collin County city of Princeton halted new construction for 120 days in 2024 while it evaluated whether its water and wastewater systems could keep up with explosive growth. The San Marcos City Council voted in June to ban data centers citywide, the first in Texas to do so. Projects have been delayed in Dripping Springs and Hutto due to water capacity concerns.
Harris, Montgomery and Fort Bend counties have also experienced severe droughts in recent years and implemented sporadic watering restrictions, but Houston’s biggest challenge has been its aging infrastructure, not a lack of supply, at least in the short term.
Environmentalists point out that a subdivision of 100 homes might use roughly 300,000 to 1 million gallons of water on site during construction, whereas an industrial project like a medium-sized AI data center can use up to 500,000 gallons of water per day.
Since 2013, Texas has been providing tax incentives for data centers but Gov. Greg Abbott suggested last month that instead of just regulating the industrial facilities and ensuring they provide their own electric infrastructure and water-efficient cooling systems, data centers shouldn’t be built in rural neighborhoods at all due to the amount of water and power they use.
Even with the recent rains, Corpus Christi is operating under Stage 3 drought conditions, meaning lawn watering and automatic irrigation systems are prohibited, and residents who ignore the restrictions can be assessed a $500 fine per violation per day. Residents can water trees, vegetable beds, shrubs and potted plants with a hand-held hose before 10 a.m. or after 6 p.m.
The water crisis has become a political hot potato, with Corpus Christi elected officials sparring recently over whether to apply for up to $120 million in federal grants to partially fund a $979 million water desalination plant. The measure was voted down 5-4 on June 30. At the meeting, Council Member Carolyn Vaughn, who said she thought debating the federal grant funding was a waste of time, accused her colleague Roland Barrera of calling her and others “stupid” on a radio show and said Barrera’s comment was childish.
Vaughn has said publicly that she’s not opposed to desalination but she wants the city to pursue a project that is financially responsible and transparent before committing nearly $1 billion in public funds. Barrera has supported desalination as a long-term, drought-resistant water supply solution.
Environmentalists opposed to a Corpus Christi desalination plant, which could treat about 30 million gallons of seawater per day, say they’re concerned about costs and environmental impacts from salty discharge into the Corpus Christi Bay. They also say they believe the treated water will be used to support tax-exempt industries, not help residents who only use about 13 percent of the city’s water supply.
So Corpus Christi — home to more than 317,000 residents and a hot spot for thousands of spring breakers and vacationers each year — has challenges, but it’s also a burgeoning site for buyers in the market for a second home, says Terence Johnson, vice president of development for Houston-based Ashlar Development.
Ashlar is creating the 240-acre Whitecap NPI luxury housing project on land that previously served as a golf course and a failed Schlitterbahn water park. Johnson says developers are not using potable — filtered, treated drinking water — while Whitecap is under construction and they had no problems securing permits from the city.
“We have ‘no potable water in use’ and ‘well water in use’ signs all over the place,” he said. “When we first started irrigating, we didn’t have the signs up and people were seeing water going everywhere. We did get a couple of calls, so we had to publicize it and put the signs up.”
Johnson told the Houston Press that developers are creating a mixed-use site that will include 500 residences, a hotel, entertainment district, marina district, bars, restaurants, retail space and a nature preserve. Lots are already being scooped up and the owners can choose their own builders to construct homes in the $1 million to $2 million range. The city’s water conservation restrictions are effective for the homeowner once they take possession of the property.
Johnson said he couldn’t answer how much water is being used on the development but advised that “it’s not that much,” acknowledging that water usage for a new mixed-use development is primarily for landscaping and mixing concrete.
“We can use city water as we’re establishing our plants for construction, but then once they’re established, we have to cut back and follow those guidelines,” he said. “We’ve always looked at our development as being off the grid. We’re implementing solar. We’re implementing groundwater reclamation and doing water wells for our irrigation. We wanted to show the rest of the island how these things can be implemented to help us all in a cost-effective way for residents.”
Drip irrigation is used on most of the landscaping so water trickles into the soil several times a day, Johnson added.
Kathleen Thompson, executive director of the Dallas-based media company Progress Texas, visited Corpus Christi for the Democratic Party Convention in late June and said she was surprised that restaurants served water in regular-sized glasses and no signs were posted around the short-term rental where she stayed advising to “use water wisely” or think about the length of your shower.”
“There was no messaging to outsiders about the crisis that they’re in,” Thompson said. “Unless you’re following the news, how would you know?”
Thompson said the situation reminds her of a severe Texas drought and devastating wildfires in 2011 that prompted then-Gov. Rick Perry to plead with Texans to “pray for rain.”
“It’s sad and it’s laughable that the public policy then was prayer when we actually hold the keys to the power in this state and can not only deal with a drought that’s happening now but droughts that we know will come,” she said. “City council members and state lawmakers have had all this time, knowing this was coming, but instead have been working on voucher schemes and who can go to the bathroom where. Water policy could save people’s lives. It’s been more than a decade [since Perry’s call for prayer] and I don’t see that the focus has changed enough for people who are in political power.”
Matthew Kennedy, petrochemical campaign coordinator with Austin-based Texas Campaign for the Environment, pointed out in his “Water for People, Not Polluters” initiative that his opposition toward development in areas experiencing water shortages is aimed at the rapid construction and expansion of petrochemical plants, refineries, and multi-billion dollar desalination projects designed to feed those industries.
According to the Corpus Christi website, the city has for 130 years been a regional water provider for the seven-county Coastal Bend area, a responsibility Kennedy says has been abused.
“Instead of prioritizing the repair of crumbling infrastructure, higher quality standards for potable water or affordability for small users, Corpus Christi has instead focused on collaborating with polluting industries to create sweetheart deals for the region’s heaviest water users,” he said. “The result? Repeated water boils and bans, higher bills and drought restrictions and fines for residential users.”
Beatriz Alvarado, a Corpus Christi-based water campaign organizer for Texas Campaign for the Environment, said residents are mostly concerned that their usage is being restricted while their water bills are doubling and tripling, and there appear to be no repercussions for the companies that are placing the most demand on the system.
“Our problem stems from decisions by the city to oversell our water supply some years back,” Alvarado said. “There was a lot of pushback from the community on desalination because there were some community members who realized who the water was for. It wasn’t for the residents; it was for the industrial companies.”
When a consultant revealed last year that the reservoirs were getting low in a shorter time frame than expected, city officials “started piling on the water projects to address a mostly industrial demand,” Alvarado said. “Another problem we’ve come across is unfettered water use. We’re under drought restrictions but industry has an exemption. They’re able to pay a small fee to avoid surcharges.”
More than 12,000 people have signed a petition to place the Fair Water Amendment on a November ballot. If approved, it would ensure that “big industrial users” would face the same fines and surcharges for excessive water use during drought conditions that residents, small businesses, schools and hospitals do.
Some Corpus Christi City Council members have said the city must protect its industrial economy and that refineries and petrochemical plants provide jobs, tax revenue and economic activity, according to the Associated Press. They’ve also said that abruptly reducing the water supply to those industries could have major economic consequences.
Alvarado, who has lived in Corpus Christi for 18 years, said a little tax revenue doesn’t justify putting residents in debt.
“We hope that the city realizes that it’s not all about exponential growth, especially when it comes to a resource like water,” she said. “Politically we would like to have a say on how fast that moves because we’re seeing the consequences of it but that’s not where our council is at right now.”
Journalist Kamran Rosen with the More Perfect Union, a progressive, nonprofit media organization — which describes itself as “explicitly biased” toward the working class and labor unions — says in a June 2026 video that Corpus Christi will be the first American city to run out of water.
According to Rosen, surface water such as lakes and rivers is legally under the state’s jurisdiction. “This means permits for water usage are managed through layered state organizations, all of which are appointed by the governor. This gives the governor immense power in shaping water use, power that Governor Abbott has used for a decade to pick pro-industry appointees who have handed out permit after permit to big business, largely oil and gas.”
One such permit was issued in 2019 to the Gulf Coast Growth Ventures petrochemical facility run by ExxonMobil and Saudi Arabia’s SABIC that is the single largest water consumer in Corpus Christi, using nearly as much water as all residents combined, Rosen says.
Thompson pointed out that Texas has a $27 billion rainy day fund and a budget surplus and could bail out struggling municipalities. “This isn’t an emergency yet but it could be,” she said of the Corpus Christi situation. “It doesn’t make sense. I’m disappointed to see the news coverage about the fighting that’s happening rather than solutions and coming together.”
