I'd say your HOA needs to update its policies! My brother lives in Denver, and his tiny yard is mostly rock with a few shrubs which don't require much water. They used to have strictly enforced rules about when and how much you could water and they encouraged people to replace their water hogging lawns with "diet" plantings.
I guess the bummer about living in Colorado is, even if you live somewhere that has water, the wildlife will show you no mercy!
Can you grow succulents other than cacti, like aloe? (that's not a cactus, is it?)
(my dogs aren't snarly, my hair is)