Shortly before the New Year, water affordability advocates released a major report proposing solutions to the growing water affordability crisis in Baltimore. The report was commissioned by Food & Water Watch, an advocacy group, and prepared by Roger Colton, a leading water affordability expert and independent consultant. The report comes at an important time as the Baltimore City Council weighs whether to take policy action to help residents struggling with rising water bills.
The report is a response to the dilemma Baltimore currently faces: the city must invest to fix aging water and wastewater infrastructure, but residents cannot afford the increased bills needed to fund those improvements. Although the infrastructure upgrades are critical, the report explains that “the need to make the investments does not make the ability-to-pay of Baltimore customers any greater."
This dilemma has created a growing crisis for many Baltimore residents. Residential water bills have increased 127% since 2010. These rate hikes have been especially burdensome for poor residents, who make up more than a third of the city’s population. The report finds that water bills are nearly universally unaffordable for Baltimore residents in the lowest income quintile (affordability is generally defined as a bill that is 2% or less of a household’s income). Colton calculates that by next year, water bills will be unaffordable even for median income households in more than half of the city’s census tracts.
So what can the city do to reverse this trend? Colton proposes a comprehensive water affordability program that he argues would reduce the cost burden on poor households, increase revenue and reduce costs for the utility, and promote water conservation. His proposal has four key components:
- Income-based rate setting for poor residents, where bills would be limited to 2-3% of household income for residents at or below 150% of the federal poverty level.
- Reduce arrears over time so that customers won’t remain trapped under a heavy debt burden from past unpaid bills.
- Offer crisis intervention on an as-needed basis to help households facing unexpected medical issues, job insecurity, or other financial hardships.
- Integrate water conservation incentives to complement the affordability programs.
Colton cites evidence from Colorado and Indiana that these types of affordability measures can reduce the financial burden on low-income households and also be beneficial for the water utilities. He explains that people are more likely to pay a lower water bill in full, whereas they may only pay a small fraction when faced with a large and unaffordable bill. Reducing bills for low-income households to an affordable level can thus actually increase overall revenue to the water utility and lower their collection costs.
However, when we spoke with Colton recently about his proposals for Baltimore, he acknowledged several potential challenges. The first is outreach and enrollment: “If you have a program that people don’t enroll in, it’s not useful,” Colton tells us. However, he explains that utilities could help make sure eligible residents know about the new water affordability program by partnering with community groups and streamlining the application process with those for existing programs like home energy assistance. Another challenge Colton raises is organizational capacity: successfully rolling out a water affordability program would require significant coordination across departments in Baltimore city government, which could put strain on staff and budgets.
The kind of water affordability program that Colton lays out mirrors one currently being rolled out in Philadelphia, which was adopted by a unanimous city council vote in 2015. However, it is unclear whether there will be political support in Baltimore for this type of program. The Baltimore Sun reports that the City Council is considering legislation to address water affordability problems in the city, although no concrete proposals have been put forward. Colton told us he has met with the council to discuss income-based pricing and offered to work with them to crunch numbers and answer questions about the potential impacts of such a program.
We’ll see if Baltimore will follow Philadelphia’s example and turn Colton’s recommendations into policy. Food & Water Watch, which commissioned the report, says “This new study shows that Baltimore must act now. It can’t afford not to.”
Image credit and caption: A group of protestors representing the Baltimore People's Power Assembly, FIST Youth, and Southern Christian Leadership Conference - Greater Baltimore, gathered outside City Hall to air their discontent with the city's recent and controversial decision to shut off water to almost 25,000 residents due to unpaid bills. Used with permission by Josh Sinn via joshsinn.com