Water Affordability: A Growing Challenge

January 18, 2022 / Blogs

Water affordability is a growing issue in the Great Lakes region and across the nation. In northeastern Illinois, the average water rate grew by almost 80% over the past decade (2008-2018) and water bill growth is outpacing income growth in 78% of communities.

This blog first appeared on Elevate’s website on January 18, 2022.

Why are water costs going up? Part of the reason is that our water infrastructure, built over a century ago, has aged and urgently needs repair and replacement. Today, almost all water utility customers pay a rate to provide funding for this necessary water infrastructure, driving up the cost of water service. As water costs rise, income growth has remained essentially stagnant — particularly working-class wages. With this income imbalance, lower-income households face significant financial burden with bill increases and mounting levels of water debt. These factors put significant strain on households and on water utility departments facing rising costs to operate water systems.

Metropolitan Planning Council’s work on water affordability

Water Affordability in Northeastern Illinois

In 2019, Elevate, Illinois-Indiana Sea Grant (IISG), and MPC published a report and accompanying dashboard tool that examined water affordability issues in northeastern Illinois. We found that many communities throughout the region are experiencing a high-water bill burden, meaning a significant portion of a household’s income (more than 4.5%) goes toward paying combined water and sewer costs. We also found that water bill burden is not experienced equally across the region. In fact, municipalities with a majority of residents of color had a higher percentage of areas experiencing water bill burden as compared to those with a majority of white residents.

Water Affordability in Chicago

Stemming from the research on water affordability in Northeastern Illinois, in 2020, Elevate and MPC conducted an analysis for the City of Chicago to further research the specific scale and scope of water affordability challenges for its residents. The research team used five years of water bill data, along with interviews with residents and community advocates, to better understand affordability challenges and the lived experience of water stress that many residents face.

The Chicago Water Affordability Analysis found that water bill burden and debt is significant in Chicago and that residents who struggle to afford their water bill also struggle to afford other necessities. Chicago’s lowest income households are the most burdened and pay on average almost 10% of their income on their water bill.

Key findings from the analysis include:

Water debt carries significant weight when discussing affordability in Chicago. Unpaid balances accrue over time, and payment arrangements are mostly insufficient to address nonpayment.
Water affordability is not an issue confined to single-family homes. Multifamily buildings, particularly two-unit buildings, have the highest rates of bill nonpayment and the highest levels of water debt over time.
Water burden in Chicago is not evenly distributed. Census tracts with a majority Black, Hispanic, and/or Asian population face on average a higher water burden while using comparatively less water than accounts in majority white tracts. Notably, census tracts with a majority Black population pay on average 19% of their income on water bills.

Residential customers without a water meter pay significantly more for their water bill than customers with meters. In 2019, nonmetered customers in Chicago paid on average $500 more for water than metered customers. These nonmetered customers also have higher water debt and water bill burden.

Dealing with high water bills and water debt?

With more research around water affordability, more cities and states are taking action to address the water affordability challenges that their residents face. Regional assistance programs include:

Illinois’s low-income household water assistance program (LIHWAP) is designed to help households that are facing the threat of water disconnection or have past due water balances of $250 or more.
Chicago’s Utility Billing Relief (UBR) program addresses past water debt by providing a 50% rate reduction on water, sewer, and water-sewer taxes, (eligibility is the same as for LIHEAP).
The City of Evanston offers a reduced water and sewer rate for income-qualified Evanston residents. All Evanston community members who qualify for LIHEAP can participate even if they don’t pay a water or sewer bill.

We encourage more cities to be transparent with their water billing data to inform themselves and the community about water affordability challenges and drive new solutions.