Water scarcity is not limited to the desert southwest. High growth areas in the east have been subject to near failures of water supplies. Raleigh, Durham, Atlanta, and others. There are no more acceptable sites for reservoir construction. I won't go on and on but the standard assumption for reservoir safety is 50 years; as in streamflow records (which generally only go back about 100 years) would determine there is a chance of a water supply failing in any given year with a 2% chance. How many engineering disciplines (building bridges, buildings, airplanes) assume it's OK for the project to fail in any given year at 2%? The usual political response to this is "Oh, if it gets bad we can enact restrictions." Bull. As rates have risen and more already conserve water, the demands have become far less elastic. There's not much demand reduction when the big drought hits. Besides..."Ma Grass!!" One other little recognized issue is that as reservoirs draw down, water quality goes south fast, decreasing net production yields. That makes the 50 year yield dubious.
In my experience the best way to choke demand is pricing. Last place I worked enacted four tiers of pricing. First units, sufficient for health, cooking, etc are priced below cost. When you get to last tier, undoubtedly used for irrigation, the price reflects the high cost of having a supply sufficient to meet irregular high demand during periods of water scarcity (drought). Some utilities even can raise rates temporarily to choke demand when it gets scarce.
Water is precious and demands respect. Yes, if you live on the Mississippi it's abundant. As climate changes the areas that are affected will increase. I left the business 10 years ago but it was generally assumed that droughts and floods would increase in severity. Seems so.