How greed, drought, and rampant overdevelopment are sucking Texas dry.
Credit: Photograps by Corey Arnold

Everywhere in life, water flows downhill. In Texas, it flows to money.

Shortly after Rick Perry's election in 2002 (he took over when George W. Bush was elected president), he and the wealthy men who'd financed his run declared the Longhorn State open for business. Brandishing cash from the Texas Enterprise Fund – a $300 million job-stimulus program enacted by the Texas legislature – Perry toured the country via donor-funded flights to woo companies to move their operations to his state. Untroubled by the stress of new industry on his dwindling lakes and rivers, Perry sweetened the state's already pro-business sales pitch – lax regulations, anti-union laws, and freedom from state income taxes – by offering mammoth checks to relocating firms. In just the first couple of years, he committed $50 million to Texas Instruments, $40 million to Sematech (a semiconductor consortium), and $20 million to notorious subprime lender Countrywide Financial. Perry bragged that these grants would net huge returns in high-paying tech jobs brought to Texas.

It was cutthroat capitalism, and it cashed out in spades. Perry lured companies from other states, then the residents of those states followed them down to Texas, revving the home-building and retail sectors and growing the state economy during a world recession.

In 10 years, Texas added nearly 5 million people, or about one-fifth of its current population. Most of them settled in the middle of the state, where Austin, San Antonio, and Dallas–Fort Worth bloated like beached blue whales. Three of the fastest-growing cities in North America, they metastasized up and down I-35, disgorging tract homes, carpet lawns, and backyard pools on what had mostly been red-clay scrubland, and turned one-horse exurbs like Buda and Round Rock into booming bedroom towns. Overnight, Austin grew a big-town skyline, as condoplexes and luxe hotels thronged the downtown grid, pricing families out and bringing executives in to $400-per-square-foot apartments. "It's a very vibrant place now for young folks with money, but they're a tiny sliver of the population," says Brian Rodgers, a local activist-investor who decries what has happened to his city. Citing Census Bureau charts and fiscal-impact graphs, he maps the stark shift in demographics: vast hikes in rents and property prices; a job market churning mostly service-sector jobs paying $30,000 or less a year, with more than 40 percent spending a third or more of their income on housing.

A decade of drought and unchecked development in cities such as Fort Worth, San Antonio, and Lubbock has overwhelmed the state's traditional water sources: its rivers and lakes. Now the vast reserves of underground water, including the Ogallala and the Carrizo-Wilcox aquifers, are being fought over. Under the "rule of capture" law, brokers can sell water from surrounding regions to the booming metros, draining the reserves of smaller communities, many of which are already in dire straights. This summer the water supply in more than 30 Texas towns could run dry. 

"Middle-class buyers got pushed farther and farther out," says Rodgers, "and the rich ones moved to where the brown folks aren't. Route 183 now, it's all huge homes as far as the eye can see."

Some of the jobs Perry bragged about materialized, but certainly not in the numbers promised. According to a 2011 report by Texans for Public Justice, a political watchdog group based in Austin, only 37 percent of the jobs that Perry's office claimed were created by the Enterprise Fund actually existed. Instead, Texas leads the country in minimum-wage positions and has by far the most uninsured workers. But for Perry's political mega-donors in the construction and retail trades – Doug Pitcock, CEO of Texas' largest highway and bridge builder; Charles Butt, a billionaire supermarket owner; and Robert Rowling, a hotel and health-club magnate – life in Texas has never been better. House prices are up 20 percent from 2009, new developments carpet the hills west of Austin's limits, and high-end malls fill the spaces in between with a stadium-size Whole Foods and Neiman Marcus. Those donors and many others have thanked the governor handsomely for his help, contributing $102 million to his campaign fund or to the Republican Governor's Association, a shadowy slush-pot formerly headed by Perry that raises tens of millions of dollars a year. Best of all, they've handed him a robust plank when he runs again for president in 2016 – 10 years of high employment without raising taxes. The stump speech will practically write itself.

But in the teeth of Perry's national ambitions blows a gust of something bigger: the hot, dry fact of climate change. From the Mississippi River to practically all points west, a massive system of oven-door air has moved in and set up shop. California's drought, its worst in four decades, shut down farms in the Central Valley, where nearly half of the nation's produce is grown. Ranchers in New Mexico, facing their fourth year of drought, sold their herds before they died of thirst or heat prostration. The snowpack in the Rockies, which feeds the other Colorado River and is the lifeblood of Las Vegas and Phoenix, shriveled to levels so low that pipes in some of the storage lakes it supplies couldn't capture its flow.

And so on, from Oregon to grain-belt states like Kansas and Oklahoma: They've faced droughts before, but this one is different, particularly in a place like Texas. Over the course of the last decade, the arid state has run desperately short of rainfall. Reservoirs everywhere have thinned or tapped out – Lake Meredith has nearly gone dry, parching Amarillo and Lubbock; Lavon Lake dwindled to half its size, threatening supplies for Dallas and Fort Worth; and the majestic Rio Grande ran so thin that the city of El Paso put in doomsday restrictions, closing laundries and car washes and ordering its residents not to bathe or wash their clothes. It could always be worse, though: They could live in Wichita Falls, a city of 100,000, northwest of Fort Worth, that's less than two years from running dry. There, they'll be drinking their own wastewater, once it's been treated at the plant. They won't be alone: Other cities in Texas are planning so-called "toilet to tap" conversions.

"It's something we're all headed to," says Lubbock's mayor, Glen Robertson. "It's not a matter of if; it's a matter of when."

The heat that rolled in stayed for months, stretching summers to the breaking point. In 2011, Dallas suffered 40 straight days of triple digits. Austin obliterated its record for 100-degree weather, posting 85 days, total. The state at large shattered dust-bowl marks, posting the three hottest months in American history – a truth that barely inconvenienced the governor. Taking the podium to road-test his run for the presidential nomination in 2012, Perry denied climate change at every turn, famously calling it a "doctored" crisis and "a contrived, phony mess." He did so while much of his state shoveled ashes, following the worst fire season in history: More than 31,000 blazes burned 4 million acres, or about half the national lands lost to fire in 2011, and cost Texas more than half a billion dollars in razed homes.