There was a recent article in the Wall Street Journal about the efforts of property developers along the Colorado Front Range to reduce the water impact of those properties.
I think it's fantastic that developers are embracing water conservation in a significant way, even if you consider that they really have no choice in many cases. For some areas it has become a matter of build smart or don't build at all. Or at least be happy with building something that will make a much smaller profit. But something that tends to get lost in the self-congratulatory language of these developers is that maybe the choice shouldn't be between a high-water-use development and a low-water-use development but between any development and no development.
If you're talking about a new development on untouched land I would much rather see it remain open space than see the most environmentally-conscious, low-water-use development in the world be built there. However, if you're talking about converting an existing use - farming or low-intensity development - to a new higher-intensity use, then by all means they should make every effort to limit the impact on local water supplies.
I realize it's not always so easy. When land is privately owned there are certain rights to develop land that can't just be taken away from the owner without just compensation. And often a larger-scale development offers greater opportunity to exact concessions from the developer, forcing a more limited impact on the environment than is the case when the land is divided into 36 acre ranchettes. But just because the developer is installing rainwater and gray water reuse features, and water conserving appliances doesn't make it something to be praised. After all the developer will most likely have no role in the development once built. The buyers might use just as much water as the development up the road. But for now the developer gets to be the good guy and in addition probably gets to charge a premium for homes in the development because of it's "green" features.
This stuff always warrants a closer look.
h/t to John Fleck for pointing me to the WSJ piece.