How do we define whether water service is “affordable”? If a water bill is 2 percent or less of a city’s median household income, is that affordable? That is the definition used by the EPA, at least for now.
As part of its authority in enforcing the Clean Water Act and Safe Drinking Water Act, the Environmental Protection Agency sets affordability guidelines for municipal water and sewer bills. But the current set of guidelines, written in 1997, has come under growing criticism in recent years as many municipalities have struggled to both comply with EPA regulations and provide affordable service for users. The cost of infrastructure upgrades and other compliance measures has been passed on to consumers, many of whom were already struggling to pay their water bills. In response to this growing problem, in 2016 the Senate directed the EPA to work with the National Academy of Public Administration (NAPA) to conduct an independent study of their water affordability guidelines. This fall, NAPA released its 200-page report.
One of the report’s key findings is that Median Household Income is an “inadequate metric” for defining affordability. The existing guidelines use a city’s Median Household Income to calculate affordability thresholds, but as many critics have pointed out, the most vulnerable users often have incomes far below the median. Water bills present an unequal burden for urban residents and Median Household Income is a very blunt instrument for measuring affordability. For example, in Baltimore the Median Household Income is $42,241, but about a fifth of the population lives below the poverty line, which is an income level less than half of that1. The NAPA report acknowledges this reality and suggests revising the affordability definitions to focus explicitly on the incomes of low-income users who are most vulnerable to rate increases.
Re-defining affordability to explicitly address people on the margins, rather than at the median, would be a major step forward towards addressing the water affordability problem in U.S. cities. However, the recommendations in the NAPA report are not binding; it remains to be seen how the EPA will act on them.
To read more coverage of the report, check out Circle of Blue’s recent reporting.
1. American Community Survey (2015), Five Year Estimates. Downloaded on 12/7/17 from <https://www.socialexplorer.com/tables/ACS2015_5yr/R11541339>
Image credit: EPA.gov