New York City: Major water savings through pricing and incentives

In 1985, the city of New York began an ambitious plan to install water meters in every residential building. The hope was that charging building owners for the water used in their buildings would encourage conservation efforts and prepare the city for the next inevitable drought. At the end of September 2000, more than half a million meters had been installed in residential buildings citywide. The city paid for most of the costs of installing water meters ranging from 400 USD to more than 40.000 USD per building depending on its size.

''The great virtue of metering systems is you tie the amount of the payment to water consumption.''
Paul J. Elston, co-founder of New York League of Conservation Voters

The city also began to conduct a door-to-door survey with homeowners that included educational information on water and free leak inspections. More than 200.000 homeowner inspections have been performed resulting in the elimination of more than 15 million litres of water per day in leaks. In 1996, leak detection in the city water mains and repair efforts in residential buildings saved more than 40 million litres of water per day.

The most effective water conservation programme was the replacement of water-guzzling toilets (up to 19 litres per flush) with high-efficiency toilets (6 litres per flush). The city offered landlords 290 million USD worth of grants as an incentive to update plumbing systems with low-flow toilets, shower heads and faucets. Between 1994 and 1997, the city of New York replaced 1.3 million inefficient toilets saving an estimated 265 to 303 million litres of water per day. In some of the participating buildings water use has decreased by up to 37 percent!

In 2000, the city offered landlords of more than 72.000 buildings with six or more units the option to get a flat-rate bill instead of paying by the meter. Buildings that enrolled this programme had to have meters installed and their landlords had to prove that their buildings were water efficient by showing that at least 60 percent of their toilets, showerheads and faucets were the type that automatically conserves water. The flat-rate is adjusted each year based on changes in the meter rate.

The idea behind the flat-rate programme was to ease the rise in water prices for landlords of densely populated, low-income buildings where water use is typically high. Since metering is registered per building and not per residential unit, owners of low-income buildings in NYC have been particularly hard hit as they are not able to pass the costs on directly to the tenants. Despite the attempt to secure low-income housing in NYC, the policy switch was met with frustration by environmentalists who felt that it was a step backwards. However, water board members were confident that the new programme would give landlords renting out to low-income tenants an incentive to install low-flow toilets and shower heads.