How about build some new cities that allow high density and public transit? I swear Americans always think they could never survive without free parking. You are absolutely not running out of land out west.
Simple, build this new city next to a water resource, not a desert and build it from the ground up to be low water usage. Manage runoff and limit single family home zoning with large yards. I bet you could make it several times more efficient than the average water usage of just about any other US city and every new resident would take pressure off the water resources of existing cities. How can the answer to “the west is running out of water” possibly be “more suburbs please”?