Water Affordability Part Two: The Opportunity

Water Affordability Part Two: The Opportunity

Access to clean water is a human right, but for thousands of families in New Jersey, the rising cost of water and sewer bills turns this essential service into a financial burden. Part One of the Water Affordability Series, “The Challenge,” laid out the harsh reality of this issue, from water shut-offs to tax liens. This installment, “The Opportunity,” is about action. It identifies the gaps in current assistance programs and explores the collaborative actions and policy changes needed to create long-term affordability programs necessary for a sustainable and equitable water system. New Jersey Future, with Jersey WaterCheck, aims to garner public support and advocate for such policy change with the goal of ensuring that every resident has access to clean, affordable water and the opportunity to thrive.

Data from the federal Low Income Household Water Assistance Program (LIHWAP) and JWW’s affordability research clearly demonstrate the need for more permanent water affordability solutions at the state and local levels instead of temporary stop-gap measures or short-lived programs. From 2022- 2023, utilizing COVID relief funding, LIHWAP offered help to low-income households to pay overdue bills to avoid shutoff or restore service, as well as assistance with current bills. However, slow rollout by both the state and utilities hampered coverage and led to a lack of robust participation. Data reported from NJ’s LIHWAP program shows 17,373 households served, 9,290 shut off prevented, 851 reconnections secured, and an average benefit paid out at the household level of $448. At a statewide level, 704 households that benefited from LIHWAP had a tax lien on their house due to unpaid bills. The households reached by LIHWAP represent only a fraction of the population needing assistance, since New Jersey’s LIHWAP funding was limited to a one-time $24 million infusion of federal funds. 

Since LIHWAP expired, there has been no statewide program to help low-income households afford their water bills. Additionally, under current state law, publicly owned water systems may lack the authority to provide their own bill discounts to low-income customers–although legislation is currently pending that would provide clear legal authority. Of the state’s investor-owned water utilities, only one, New Jersey American Water, offers discounted rates for low-income customers, but so far it has enrolled only about 3% of the estimated 88,000 eligible customers. 

Permanent water affordability or assistance programs for low-income water households–similar to programs that exist for low-income electric and gas customers–would be a means of direct, tangible support that can enable these households to hold on to a greater share of their income. For communities of color that often have a tenuous hold on wealth-building opportunities through either homeownership (e.g., due to the legacy of redlining) or saving a share of their disposable income, low-income rate assistance and affordability programs help prevent loss of savings and wealth being built. 

Collaborative Actions for Solutions: 

Goal: To build public support for water assistance programs in New Jersey and advocate for policy changes that will lead to the development of affordability programs. 

NJF, with JWW members, is facilitating a year-long water affordability advocacy campaign to build support for permanent water assistance and affordability programs. The project will be developed in partnership with local, statewide, and national organizations, including drinking water and wastewater utilities. A concerted campaign will utilize actionable data and highlight how water affordability and assistance programs, along with data transparency, would benefit communities in Atlantic City, Camden, Trenton, Newark, and Paterson. Efforts will include consideration of statewide approaches, which can help address financial limitations faced by communities and water utilities with high concentrations of burdened households. 

By addressing affordability issues, existing lead service line replacement and CSO solutions can be accelerated instead of being delayed, as will improvements in levels of service that support community health and economic activity. Addressing affordability constraints at the household and community level complements the existing efforts that the JWW Lead Service Line Replacement Working Group is addressing, where water utility peers meet to identify best practices to accelerate compliance with the statutory goal of replacing lead service lines in ten years. Furthermore, it will also align with JWW’s work advocating for affordable long-term solutions for combined sewer overflows (CSO) in New Jersey through the adoption of innovative CSO Long Term Control Plans (LTCPs) that offer cost-effective solutions, an accelerated timeline towards reduction of combined sewer overflows, and multiple community benefits. 

This initiative not only seeks to address immediate financial barriers but also lays the groundwork for long-term solutions that prioritize equity and access to essential water services. This initiative will leverage JWW’s backbone committee and membership structure and partner with collaboratives like Lead-Free NJ to meet the following objectives: 

Objective 1: Advocate for the need and benefits of statewide programs to address water rate affordability and financial assistance with water utility bills for low-income residents and utilities serving them.

Objective 2: Support the Development of Affordability Programs by Publicly Owned Utilities

Objective 3: Utilize Data Transparency to Monitor and Promote Affordability solutions 

Join the Affordability Subcommittee to advance the following work plan goals: 

1. Create educational tools that assist public water utilities in implementing low-income discount programs specifically targeting Newark, Paterson, Trenton, Camden, and Atlantic City. 
2. Help individuals impacted by affordability burdens share their stories 
3. Help us create workshops for public utilities to share best and promising practices for developing affordability strategies, including innovative rate structures.
4. Collaborate on a data report on shut-off notices, overdue bills, and liens associated with water and sewer services and their impact at the household level in Newark, Paterson, Trenton, Camden, and Atlantic City.
5. Join the advocacy campaign with local and state partners to build support for a permanent NJ water assistance program.

Expected Long Term Impacts:

This initiative aims to provide tangible benefits by alleviating the financial burden faced by approximately 4000 households to 80,000 households struggling to pay their water and sewer bills across the five cities of Paterson, Newark, Trenton, Camden, and Atlantic City. 

Water affordability solutions lead to tangible economic and human benefits, such as preventing home loss, maintaining custody of children, putting food on the table, and taking care of medical needs. Water affordability programs are particularly crucial in reducing the racial wealth gap, as they ensure low-income households have reliable and affordable access to essential services. The ability to pay water and sewer bills is directly linked to the ability to have continued access to clean and safe water and sewer services—a basic necessity at the household level. The cost of shut-offs and living without access to running water and sewer services can add up quickly at the household level. For example, the costs of bottled water far exceed the costs of tap water. Yet, the use of bottled water is more common, not less, among income-limited households, in part due to distrust of institutions and tap water quality. Affordability programs play a vital role in leveling the playing field and breaking down systemic barriers that have historically contributed to economic disparities.