Gardening

I was actually looking at a layer system myself. With stabilized earth (50% concrete and dirt) packed at an angle about 1 1/2 feet, rocks, rocks wrapped in breathable fabric, and finally more rock on top of that.

Basically just mimizing the rate at which water flows under my house but giving it a better place to go away from the house.

I also have big clay pots buried a foot or two from the house so the water can sit in there and slowly spread mix spread out.

The biggest saver is dealing with roof runoff though, rain storage plus irrigation away from the house help quite a bit

Realistically I think you should just keep the grass and stop watering your foundation perimeter. Any cracking or shrinking is temporary and inconsequential.

However, if you really want to get rid of grass around the foundation, go for a perennial bed of native plants. They'll look better than grass, won't need near as much water, and may even attract pollenators or birds.

If you go the gravel route, which I think you would end up regretting, remember that you will end up with weeds growing in it no matter what. Enough organic matter will eventually accumulate to allow weed seeds to sprout, then you'd be stuck with a much more manual maintenance problem than you have now.

If your only concern is termites, there are perimeter termite poisons you can get and apply, or any pest control service would likely be able to do that for you.

A few people not understanding expansive soil in the comments. You need to keep the soil moisture consistent. In your case, I might go for something like lava rock. Especially if you can get some that's light in color, it can help keep the actual soil cooler so you have less evaporation. The porosity will let moisture through, though, so it won't be too wet underneath.

I wonder if you could get a moisture meter or something to make sure you aren't using more water than you need. Also, potentially, you could hook your soaker hose up to a smart irrigation system that can handle automated rain delays.

I don't wanna be rude, but you're wasting a shit ton of water, in an already arid area, and then you wanna create a hellscape out of it on top? My environmentalist heart hurts hearing this plan 💔

Look around what grows natively in your area.

A lawn is already wasteful and hard to keep alive in mild climates, in a desert this is just stupid.

Maybe there are some pollinator plants that tolerate this dryness. Hell, even cacti and succulents bloom and attract colibris and shit.

Sadly, I don't live in your climate and therefore can't give you many instructions out of experience.

Good look rewilding your space! 🤗

And as a follow up, what kind of gravel would be best? I see a bunch of different types on Home Depot for example (decorative landscape rock, crushed gravel, boulder and stone, basalt, etc.). I also see I can filter by rock size (inches). Can anyone recommend what would be best?

Smaller rocks have less space between them. I'm no pest expert, but you probably want plain 1" crushed stone. It shouldn't trap moisture.

I wouldn't recommend dumping so much water right into the ground, but you could also just bury the soaker hose.

There's rubber mulch. It's expensive but lasts for years.

If you're worried about termites, the best thing aside from not putting wood mulch right up against the house is to put in some of the termite stakes.