The conflict “piles one major policy crisis on top of another,” said Richard Frank, director of the California Environmental Law & Policy Center at University of California, Davis.
Gov. Gavin Newsom signed executive orders declaring 50 of 58 counties in a drought state of emergency, giving water regulators more authority to manage water use and diversions. Late last week, the governor formally urged all Californians to reduce their water use by 15 percent. It’s not a mandate, but it underscores the harsh new reality we’re facing.
At the same time, an estimated 120,000 affordable homes need to be built each year through 2030 to meeting housing needs, particularly for extremely low-income residents, according to a 2021 reportfrom the California Housing Partnership (CHP), a nonprofit affordable housing group.
“I’m afraid I do think it’s going to become a bigger issue,” said CHP CEO and President Matt Schwartz.
Consideration of a moratorium on new water connections by the Marin Municipal Water District has already stalled one affordable housing project and could hurt another one 10 years in the making.
Vivalon, a nonprofit working on its final permits to build what’s called a healthy aging center, plans to offer support services for older county residents on two floors and 66 affordable apartments on four higher floors. The wait list has more than 400 names.
The $48 million project will have trouble getting financing without water.
“It could stop the project dead in the tracks,” said Vivalon Chief Executive Anne Grey.
A 74-unit multifamily complex already approved by the county for low- and extremely low-income residents is also in limbo, said Alexis Gevorgian, a managing member for AMG & Associates, a developer.
The project in Marin City was the first development proposal submitted to the county under new state laws meant to streamline housing developments. But Gevorgian needs a letter from the water district. Without that, he said, “we can’t get our state and federal subsidies to build our project.”
During the 2012 to 2106 drought, California water regulators issued 21 orders barring water districts from allowing new connections and ordering existing promises of water availability null and void if building permits weren’t in place before certain deadlines.
The same could happen during this drought, though it would likely affect smaller water systems and not large, urban suppliers where housing developments are typically based, said Darrin Polhemus, deputy director for drinking water programs at the State Water Resources Control Board.
“I don’t see a big impact on the state housing stock,” he said.
During the last drought, the Hidden Valley Lake Community Services Water District west of Sacramento sued to overturn a state orderprohibiting it from adding new connections beyond the more than 2,400 already in operation.
The district eventually won because they argued their supply came from groundwater and not surface water, over which the State Water Resources Control Board has regulatory power. The 2014 moratorium wasn’t lifted until July 2020.
Developers who secure water availability agreements from a local government like a county that then issues a moratorium could have some legal recourse, otherwise the cases are hard to fight, said a water rights and real estate attorney who spoke on condition of anonymity due to ongoing client representations.
Developers could, however, get special agreements in advance that they’re exempt from moratoriums. For Grey, a lawsuit wouldn’t be possible for the nonprofit.
“We wouldn’t have the bandwidth to do that because it would be too expensive,” she said. “We can’t put our other services in jeopardy for an unknown outcome.”
New NIMBY Threat
Housing is needed throughout the state, yet where housing opponents usually cite traffic concerns, water concerns could become one more way to thwart development.
“Frankly, I think they’re looking for new bullets to tie things up,” Schwartz said. “I think the next one will be water.”
He is considering sponsoring a bill in the state legislature that would exempt affordable housing projects from moratoriums. Unlike single-family homes, affordable housing developments rarely have elaborate landscaping and come with water-efficient appliances and plumbing.
“We’ve got to get out in front of this,” Schwartz said.
Whether there’s a formal moratorium or not , developers could see pushback at the local level when it comes to building permits and NIMBY residents, said Steve Cruz, a consultant on water and resource issues for the California Building Industry Association.
Prohibiting new connections also won’t solve a problem and could force people into older homes that are less water-efficient.
“It’s not really addressing the problem,” Cruz said. “You’re not going to take us out of drought because you’re taking away new development.”
Between 2023 and 2031, the allocation for Los Angeles County is 1,327,000 housing units to accommodate an expected population increase of 3,317,500. The state mandate for the nine-county Bay Area is 441,000 units, representing an expected population increase of 1,102,500.
Nowhere does the legislation indicate where the additional water for these units will come from, nor does it address impact on infrastructure, such as sewer lines.
“First, the plan suggests the transfer of agricultural water to urban use. But what effect would that have on farm economy, food supply and prices? A good deal of agricultural land already is lying fallow due to decreased or suspended water allotments.
“Second, the plan proposes more desalination plants. The latest plant being built in Huntington Beach is a twin to the plant at Carlsbad, which treats 50 million gallons per day at a cost of $1.4 billion a year. The Carlsbad plant took three years to build; the Huntington plant is expected to take nine years. Each plant can supply the daily needs of 400,000 people.”
Drawbacks to Desalination Plants
One issue with desalination plants is the power required to run them.
“During its five years of operation, the Carlsbad plant has had to cut back to 40% capacity when San Diego, along with many other California counties, endures brownouts,” Johnson said.
Meeting the state mandate would require “the construction of two Carlsbad-type desalination plants, at a cost of $2.8 billion; Los Angeles would need eight plants, at a cost of $11.2 billion. The operating costs of these plants would come out to 2 cents per gallon of desalinated water.”
Also, the water plan anticipates expanded water reuse, which means the use of treated wastewater for irrigation or toilet flushing — or the costly blending of treated and potable water.
“The state’s largest water reuse utility — the Orange County Water District — is trying to find a filtration process to remove carcinogenic ‘forever chemicals’ (poly and perfluoroalkyl substances). It is projected to cost $220 million for the filter and $15 million in yearly operating costs.”
It would be prudent, Johnson suggests, for experts from the state water department to meet with legislators promoting high-density housing, and that water and power agencies in Los Angeles and San Francisco Bay Area first be required to do environmental impact reports to show whether they can support the added housing allocation numbers.
“The state has more than $75 billion in surplus funds for 2021,” said Johnson. “Why not put $20 billion of that into an infrastructure fund that could be drawn upon should a particular county need funds to upgrade utilities to meet RHNA housing numbers?”