Water Affordability Part One: The Challenge
Water Affordability Part One: The Challenge
Water is a vital piece of community infrastructure. Water affordability and infrastructure challenges are connected. We need to invest in water infrastructure to maintain it, but we also need to fund those investments in ways that ensure people can afford to pay their water bills. As water advocates, we must embrace multifaceted solutions to tackle the water affordability problem from various angles. An estimated one-fifth of all New Jersey households face challenges affording their water and sewer bills. Unaffordable water bills threaten savings, wealth building, and access to water since water debt can lead to shut-offs and tax lien sales along with compounding interest and penalties that make it harder to pay off the debt. Permanent solutions in this area can have far-reaching benefits. These include strengthening the tenuous hold on building savings and retaining wealth at the household level, ensuring access to basic needs such as clean drinking water and healthful sewerage and stormwater service at the community level, and supporting sustained progress of existing projects targeting lead service line removal and combined sewer overflow at the utility level, which are vital community infrastructure and have long term health and economic benefits.
New Jersey Future (NJF) with Jersey Water Works (JWW) partner organizations, is working to build public support for water affordability and assistance programs in New Jersey and advocate for policy changes that will lead to their development and implementation. This concerted approach will involve state- and local community-level work in Paterson, Newark, Trenton, Atlantic City, and Camden, where approximately 4000 to 80,000 households struggle to pay their water and sewer bills. These five cities also show a disproportionate burden from lead service lines in comparison to many other cities in NJ, along with a significant concentration of communities of color. Camden, Paterson, and Newark are combined sewer overflow communities facing impacts from flooding and sewer backup into basements due to aging sewer infrastructure. By addressing barriers to affordability, our vision will complement and support the acceleration of existing JWW initiatives targeting lead service line removal via the JWW Lead Service Line Implementation Working group and combined sewer overflows via JWW Combined Sewer Overflow Committee in these communities.
The Challenge
Access to clean water is essential for everyone; without it, survival is impossible. While water is a natural resource, pipes and water infrastructure deliver it to our taps. Proper management of resulting sewage is also critical to avoid health problems, flooded streets and basements, and pipeline failure. Likewise, proper management of stormwater protects community health, safety, and economic viability. This infrastructure is a crucial part of the built environment and directly impacts the quality of a neighborhood’s environment and the community’s quality of life, safety, and health. At a household level, access to safe and affordable water is vital for meeting basic needs. Water supply, wastewater, and stormwater infrastructure are essential community infrastructure, particularly in addressing the racial wealth gap through local economic activity and health protection. Strategically addressing elements of this community infrastructure is important for fostering community well-being. According to the US Water Alliance, “Access to safe and reliable water is fundamental to the health of our communities, the well-being of our families, and our prosperity and dignity.”
However, rising water and sewer rates linked to repairs and replacement of aging infrastructure, reduction of combined sewer overflows, stormwater system improvements, lead service line (LSL) replacement, requirements to address emerging contaminants such as per- and poly-fluoroalkyl substances or PFAS, and other necessary innovations, as well as inflation in water utilities’ general operational costs, are making it increasingly difficult for many households to afford water services. The costs of these essential and long-overdue infrastructure upgrades are passed on to ratepayers. This creates an affordability burden for households with less disposable income and for communities of color, who have less generational wealth to lean on to overcome income fluctuations due to the rising cost of water and sewer bills.
Based on JWW research on affordability, the statewide average estimated cost of residential water and sewer bills in 2021 was $673 annually.
Across the five cities of Newark, Paterson, Trenton, Atlantic City, and Camden, the typical yearly sewer bill cost ranges from $200 – $350, while the average yearly water bill cost ranges from $200 to $630. In the utility service areas within these five high-poverty cities, the percentage of households experiencing an affordability burden ranges from 20% to nearly 60% of households.
Impacts of unaffordable water bills
Homeowners who are unable to meet these bills may face severe consequences, such as water service shut-offs, which are in some cases hyper concentrated in certain zip codes and the potential for a lien to be placed on their property due to overdue payments and spiraling impacts from that debt. This situation exemplifies one of the most significant water equity issues in New Jersey, as the financial burden of current drinking water and sewer utility costs weighs heavily on many households.
Individuals can lose wealth from unpaid water or sewer bills in two ways. For homeowners, NJ state law enables public water and wastewater systems to use tax lien sales to try to recover the value of unpaid bills. If a homeowner is unable to pay, then an investor purchases the lien through a tax lien sale by paying off some or all of that unpaid amount. However, the investor is then able to foreclose on the home if the homeowner is not able to repay the investor the original unpaid amount plus high interest rates. If they foreclose, the investor gets the entire value of the property, even if the water (and/or property tax) debt was only a fraction of the entire value. The homeowner is left with nothing!
For renters, depending on their lease, they may be responsible for directly paying all or a portion of the water bill, or the landlord may be responsible for paying the water bill but pass along the costs to the tenant through rent. The danger of eviction due to rising rent and unpaid bills creates a downward cycle of instability and reduces the opportunity for wealth-building. The percentage of households that are renters within these five cities is disproportionately high, ranging from 61% in Trenton to almost 76% in Newark, compared to statewide (36.1 %).
Upgrading New Jersey’s outdated water infrastructure is crucial, but it shouldn’t come at the expense of its most vulnerable residents. Water and sewer rates are becoming increasingly unaffordable, disproportionately burdening roughly one-fifth of New Jerseyans, many of whom are in communities of color and already face significant instability and economic hardship. Continuing to pass on increasing costs of these projects to the ratepayer will deepen health risks and widen the racial wealth gap, threatening the ability of households to stay in their homes and meet their basic needs. To ensure all New Jerseyans have access to safe, affordable water and the opportunity to thrive, we must advocate for robust water affordability and assistance programs which support vital infrastructure projects and protect the well-being of every community. These affordability programs will be crucial in breaking down systemic barriers and ensuring equitable development across New Jersey.
Stay tuned for Part Two of our Water Affordability Series, “The Opportunity,” where we’ll explore the necessary collaborative actions that New Jersey Future will take with Jersey Water Works to build public support and advocate for the policy changes needed to make these essential programs a reality.
