Assessing statewide water utility affordability at the census tract scale

Abstract

Academic and government research regarding the affordability of household drinking water and sewer utility (water utility) costs have resulted in the development of several methodologies that have been tested at various geographic levels. A New Jersey study on potential household affordability stresses from water utility costs at or below the Census tract-level estimates that approximately one-fifth of all New Jersey households could face affordability stresses, assuming that they directly pay all water utility costs. The methodology is adapted from the Affordability Ratio method of Teodoro. The results show the potential for use of county-level household essential expenditure estimates in areas with high-density populations. They also show the value of the methodology as a basis for policy discussions regarding the severity and geographic distribution of affordability stresses, as the analysis clearly indicates that significant affordability stresses exist in many suburban municipalities and rural town centers, not just historic urban cities.

Affordability of household water services across the United States

“…Numerous studies have developed water affordability metrics [6,[16][17][18][19][20][21][22]. Each approach requires researchers to make assumptions regarding the quantity of water appropriate to meet basic needs and the level of spending that constitutes undue financial hardship.…”

“…In the absence of these data, affordability studies typically combine surveyed water bills with census data to estimate the financial burden for households in the community, i.e. what percentage of household income is needed to pay for water services [6,[16][17][18][19][20][21][22]. This approach can only indicate the financial burden and not whether households are able to pay for services, or what sacrifices they must make in order to do so.…”

“…To date, general agreement on affordability metrics and thresholds does not exist. A growing number of studies have developed and proposed affordability metrics [16][17][18][19][20][21][22], each of which uses different volumes of water, different measures of financial hardship or burden, and different levels of household income. Since the definition of water affordability is subjective, we calculated affordability metrics across a range of water usage and levels of financial burdens to capture the potential range of affordability challenges.…”

The high health risks of unaffordable water: An in-depth exploration of pathways from water bill burden to health-related impacts in the United States

“…Residents who were at least 21 years of age and who had combined annual water bills and sewer bills that exceeded 3% of annual gross household income within the previous 12 months were eligible to (8), whereas the United Nations recommends a limit of 3% of an individual household's income as an affordability standard [48,49]. These thresholds have been widely critiqued, however, because area MHI is a poor indicator of community poverty and an especially poor proxy for assessing a household's ability to pay for essential goods [11,50,51]. For the purposes of this study, we defined a threshold of affordability as combined water and sewer bills costing no more than 3% of the household's income.…”

“…In the long run, water rate structures that recognize differences in customers' ability to pay will help all low-income households, rather than limiting assistance to those who qualify for assistance programs based on categorical eligibility, as in Boston and Chelsea. The push to establish a uniform affordability standard to determine who is eligible for lower tiered water rates and CAPs is an active arena in research and advocacy, including national and state proposals [11,50,51]. The Unitarian Universalist Service Committee supports a national uniform affordability standard that water bills should not exceed 2.5% of monthly household income [93].…”