If people ever accept building homes mostly underground with only skylights or a single room above ground then Phoenix will have no problem surviving.
Building underground doesn't require digging deep holes. Homes could still be built above ground for the most part with waterproof materials Etc., and then have dirt heaped around them.
The result if creatively managed would be a collection of hills but with windows and various other decorations that could still be built on the outside just like we do with houses.
The other alternative would be to opt for a building homes using giant quarry blocks instead of the thin walls we currently build and do away with wood entirely for exterior wall construction save for interior home design.
Developments could take on the look of mini-Petras.
It's our obsession with having a home fully above ground designed with the Midwestern climate in mind, completely exposed to the elements that requires such heavy resource utilization.
Sure we have great insulation today, but it would be completely unnecessary if most of the house we build was underground underground.
By keeping most construction underground, the land would not contribute to higher temperatures via hot concrete and asphalt.
Runoff would be allowed to return to a more natural form and nurture the land replenish the water table like it used to rather than rushing off into the concrete drainage system.