Recent extreme climatic events and failing infrastructure have increased awareness of the need for expanded resilience within urban water systems. Architects and engineers are more seriously considering integrating water capture and reuse technologies into projects; yet, the systems necessary to meet net zero water resilience are not currently legal for commercial use. This paper investigates the regulatory changes necessary to accommodate net zero water projects in Arizona. Institutional innovation in three critical systems—making rainwater potable, reusing water on-site, and decentralizing wastewater treatment—is needed to implement existing technology. Extrapolating from the removal of the identified barriers, this article sets forth a regulatory pathway for regenerative water design. For urban water reinvention to occur, institutional innovation will be as important as technological innovation.