What the Drought Could Mean for Housing

The Golden State is slowly turning brown (no pun intended, Mr. Governor). Unprecedented measures have been called for to curb residents’ water consumption in response to the drought, now running into its fourth year.

Da Guv has mandated a 25% reduction in water consumption throughout the state… with the exception of agricultural uses, which only have to report how much water they use; not curtail its use.

The 25% reduction will force a change among home owners and communities. As water bills get more expensive and ‘water fines’ are imposed, home owners will need to find ways to conserve, and their outdoor landscaping may be one likely place to do it. Lush lawns will need to be uprooted in favor of more drought-tolerant ones. Those long-held favored aesthetics for green yards and colorful, water-loving plants will need to shift among residents.

For example, Palm Springs – which is in the middle of the desert (no duh) – may see some of the biggest repercussions to its real estate. The daily per capita water use in Palm Springs is 201 gallons – more than double the state’s average. Palm Springs has ordered 50 percent reduction in water use by its city agencies. The city plans to replace lawns and annual flowers around the community with water-saving native landscapes. It also is paying residents to replace their lush green lawns with rocks and desert plants.

Meanwhile, in the agricultural Central Valley of CA, farmlands are drying up and unemployment is surging among farm workers. (Perhaps the primary reason Brown exempted Ag uses from the 25% reduction in water use.) Some communities are seeing an exodus of residents as some farm workers are relocating 70 miles out or more in search of work.

The drought could also prompt a reduction in housing construction. That could come at a time when more residential development is desperately needed to meet higher demand. And this has inadvertently led the NIMBYs, ”Coasties” and No-Growthers to seize upon the drought as a means to stop housing.

With gnashing of teeth and wringing of hands, they claim there’s not enough water to allow new housing to be produced… which just happens to have the effect of increasing the value of their own property since it creates a constrained supply. Most lawmakers see through this canard but there are some (the usual suspects) who gleefully latch onto this flawed premise to stop everything from housing to economic development. Of course these are the same bright lights that think rent control/rent stabilization is a swell idea… and their logic is more twisted than a pretzel in a hurricane. Forewarned is forearmed.