When we talk about razing and rebuilding, it’s notable that this has already happened in our history. That’s how we have interstate highways cutting through urban areas and the destruction of the passenger rail network which was effectively razed and replaced by highways. Many big box stores and parking lots replace buildings that were destroyed (see before and after photos of downtown Houston, for example).
Most American cities outside of the coasts wouldn’t even exist without a railroad network that largely no longer exists.
These are all conscious choices and there’s no such thing as being stuck with cars-only infrastructure forever. The defeatism of saying that we are stuck with cars-only is a lie. After all, interstates regularly need billions of dollars of periodic investment just to keep them functional. Many states continually decide to do things like add lanes and enhanced interchanges at eye-watering costs that aren’t too dissimilar from the cost of adding new rail service.
For example, what if instead of spending $20 Billion in today’s dollars on the big dig in Boston, the elevated highway was simply demolished and the rest of the insane costs that were sunk into an underground highway went into expanding the commuter rail network and making a better rail connection to Logan airport (the blue line already nearly goes there with a short airport bus transfer, which could be further improved). That would reduce traffic in downtown Boston rather than expanding traffic by adding lanes and making driving more attractive than alternatives. This is already one of America’s most walkable cities but the highway was moved underground rather than removed.
$20 billion is so much money that entire new commuter rail lines could have been built for that price.
If water sources dry up it won't be necessary to raze the city. People will leave anyway.
What scenario did you have in mind where the city runs out of water? I bet the nice folks who actually do this kind of work would love to hear about it. They seem exceedingly confident in their water portfolio [4]. Or maybe you’re just speculating; a little curiosity goes a long way [5].
[1] https://www.phoenix.gov/waterservices/resourcesconservation/...
[2] https://news.wef.org/ancient-engineering-lays-groundwork-for...
[3] https://www.arizonawaterfacts.com/water-your-facts
[4] https://www.phoenix.gov/waterservices/resourcesconservation/...
[5] https://www.azcentral.com/story/news/local/arizona-environme...