How Can We Make Growth Water Demand Neutral

1
How Can We Make Growth Water Demand Neutral?

• Presentation by Steven E. LaMar, Chair
• Water Resources Subcommittee
• California Building Industry Association

2
Should We Make Growth Water Demand Neutral?

• Where Would California Be Today If 50 Years Ago
  Pat Brown and Voters Decided Not to Build a State
  Water Project?
• We Have Benefitted Mightily From the Water
  Infrastructure Investments of Prior Generations.
• Do We Owe Anything to Future Generations?

3
Current Situation Is Challenging From a Water and
an Economic Standpoint

• We Have Already Saddled Our Children and
  Grandchildren with Billions of Dollars of State
  and Federal Debt.
• We Are Leaving Future Generations with Aging,
  Failing, and Inadequate Water Infrastructure.
• Should We Really Attempt to Shift Even More
  Obligations to Future Homebuyers?

4
A State Requirement to Make New Development Water
Demand Neutral Is Poor Public Policy and Unfair!

• It Shifts Responsibility for Water Supply to a
  Very Small Segment of California Residents.
• It Punishes People Who Are Buying a More Water
  Efficient Home Than Existing Residents.
• It Delays Water Infrastructure Investment and
  Construction Decisions.
• It Could Have Severely Negative Consequences for
  California's Economy!

5
Who Would Pay for Water Demand Neutral Homes?
6
Who Would Pay for Water Demand Neutral Homes?
7
Who Are These New Homebuyers?

• Currently Paying a Few Hundred to Several
  Thousand Dollars in New Water Connection Fees and
  Capacity Charges
• Moving Into A Much More Water Efficient, Higher
  Density Home Than Existing Residents
• Likely to Be Latino, As the Largest Growing
  Segment of the California New Home Market

8
What Would a Water Demand Neutral Policy Do to
the States Economy?

• Since 2005 Decline, the State Has Lost 300,000
  Direct Construction Jobs!
• Need to Build 220,000 to 250,000 Homes Per Year
  to Keep Up with Population Growth
• Most Recent Projection Is That Less Than 66,000
  New Homes Will Be Built In 2008

9
What Would a Water Demand Neutral Policy Do to
Tax Revenue?

• Based Upon a Drop in Housing Starts from 208,000
  in 2005 to 66,000 for 2008
• The State Has Already Lost 2.2 Billion in State
  Tax Revenue
• The Loss in Local Government Tax Revenue Has Been
  426 Million
• Is Now a Good Time to Discourage New Housing and
  New Economic Development?

10
Requiring New Development to Be Water Demand
Neutral Is

• An Abandonment of Our Responsibility to Future
  Generations
• An Inappropriate Shift of Water Infrastructure
  Costs to an Extremely Small Percentage of the
  Overall Population
• Equivalent to Requiring Prius Buyers to Subsidize
  Hummer Owners
• A Significant and Poorly Timed New Blow to
  Californias Economy!

11
What Is a Preferable Approach to Requiring Growth
to Be Water Demand Neutral?

• Plan, Fund and Build the Water Supply
  Infrastructure We Need for the Future!
• Provide Policy Incentives for New Growth to Go
  Beyond Minimum Water Conservation Standards
• Retrofit Existing Homes and Buildings at Time of
  Sale to be More Water Efficient
• Adopt a Workable Model Landscape Ordinance
• Expand the Use of Recycled Water
• Adopt Water Conservation Rate Structures
  Statewide

12
Thank You!

• Steven E. LaMar
• Chair, Water Resources Subcommittee
• California Building Industry Association
• lamar_at_legisight.com
• [phone]