This project studies the impact of sustained drought over the past decade on urban growth, economic activity and energy usage patterns in California. Using the changes brought by the interaction of water right seniority and drought conditions this project will study the impact of water availability on cities and towns in California. Under drought conditions, some cities and towns that have senior water rights will still be able to get as much water as they need, while others that have junior rights won’t. The latter may need to impose water-conservation regulations or buy expensive water from farmers lest the tap runs out. The affected cities might also have to impose anti-growth policies to preserve a minimum per-capita level of water consumption. Reacting to these restrictions, people might want to move to places with more water available, lowering population and housing price growth. This would also displace economic activity, for example discouraging development of water and energy-intensive industries, which will then have consequences on energy consumption patterns. This study will analyze all of these potential effects.