Apartment operators, and the State, are dealing with unprecedented water-use restrictions during California's devastating drought.

How does the phrase go? You can lead a resident to water, but you can't make them.... Unprecedented water-use restrictions put in place in April in California by Gov. Jerry Brown have exacerbated a long-standing controversy among Californians, including apartment residents and owner/operators. They come in a state proud of both its beauty and its environmental conscious.

Brown initially asked all Californians to reduce water use by 25 percent. He ordered California's 400 water agencies to cut their output by a range of 8 percent in some areas and by as much as 36 percent in others, based on how they had performed in July-September 2014.

When the restrictions were announced, many Californians in various markets and industries immediately dug in, a large number crying foul when learning that farmers, who reportedly use as much as 80 percent of the state's water supply, were exempted by Brown.

Some say that these restrictions are warranted, and are a long-time coming, but wondered who and how this mandate would be enforced. Consumers and businesses of all kinds throughout the state are asking: If they must reduce water use by "X" percent, then "X" percent of what?

The types of penalties or warnings are not defined, at least not yet, setting up a state and local battle with many participants (See "What Happens Next" on pg. 51). The Washington Post in April, citing a "state official," reported that those failing to do so could face fines of up to $10,000 per month.

Some Op-Ed columnists ask: Wouldn't simply raising the price of water encourage overall conservation?

How bad is the drought? It's been going on for four years.

California receives approximately one-third of all its water through snowmelt from the nearby Sierra Nevada Mountains and other state mountains, but that total is 5 percent of what is considered normal. California has suffered droughts in four of the past five decades with each seemingly more severe in its impact. The state's growing population hasn't made it any easier.
After Brown declared in January 2014 a drought emergency, he urged Californians to voluntarily cut their water use by 20 percent from the previous year. Results varied greatly based on area with an average 9 percent savings statewide.

Reports on recent efforts praised communities Stockton, Santa Cruz and Mountain View, for slashing use in February. Newport Beach was reportedly one of the worst performers. San Diego and Los Angeles were assigned a rate cut of 16 percent, according to Molly Kirkland, Director of Public Affairs, San Diego County Apartment Association.

Since Brown's April mandate, water districts statewide have received and made comments that have been shared with the state's water boards, which govern water use. It is expected to adopt final rules in May, and begin implementing the rules in July, based on June consumption.

Editor's Note: On May 22, a proposal by farmers from the Sacramento-San Joaquin River Delta was accepted by California state water officials which would have them voluntarily curtail their water or land use in an attempt to avoid potential mandatory cuts later during their growing season. These farmers will have the choice to reduce their water by 25 percent or to leave one-fourth of their land unplanted. Farmers use a reported 80 percent of the state's water and previously had been exempted from Brown's demands. 

Apartment Residents Speak Up

Residents at Prometheus Real Estate Group communities are asking onsite staff what the company is doing and what they can do to help, says Mary Nitschke, its Director of Ancillary Services.

"Three properties reached out to me the first week it was announced," she says. "I believe that at least 15 percent of our residents have expressed concern to someone, and that's a conservative figure. Prometheus is not angry about the mandate. We know this is a problem. Our company loves California, and we will do our part to conserve."

Nitschke says Prometheus had begun taking steps and continues to focus more on conservation, paying closer attention to water leaks, for example. The company is using reclaimed water for power-washing when restriping the parking lots. They are also using more mulch. Nitschke says that apartment owners are realizing that conserving water now beats the alternative to the state having no water for landscaping; which would truly affect curb appeal as landscaping would look more like a desert than a lush property.

Chip Crandall, President, Torrey Pines Property Management, La Jolla, Calif., says the discussion about water conversation has been going on for at least five years.

"It has worried me as a consumer," Crandall says. "We are trying harder to educate our residents on how they can reduce water consumption through basic guidelines: Take shorter showers (suggesting no more than three minutes); not running the sink water while brushing their teeth or shaving; not flushing every time they use the toilet, particularly overnight; and thinking about how to more economically wash their dishes."

Crandall says his effort as an owner began years ago when he began getting rid of onsite fountains and removing turf from landscaping, instead using decomposed granite.

"California has a long-held belief that its landscaping needs to be green and lush year-round," Nitschke says. "Our state might have to change that perception. We may have to prioritize our plant material. If this drought continues, we might have to let lawns get a little brown, to ensure that we don't lose our trees and shrubs."
Nitschke takes comfort in knowing that a company that has been actively reducing its water use the past year is being rewarded, and not penalized.

"The required reduction in consumption is compared to 2013 consumption-not last year-so if you cut by 20 percent last year when it was voluntary, you only have to tighten up another 5 percent."

The Water Bill

Owners and managers, such as Rick Snyder, RA Snyder Properties, and others say the move toward implementing Ratio Utility Billing Systems (RUBS) at communities of all sizes will accelerate.

Apartment Association of Greater Los Angeles Executive Vice President Jim Clarke says, "The situation may end up helpful with regard to holding residents accountable for their water usage. Currently in the City of Los Angeles, the vast majority of renters do not pay for water. There is no incentive for them to conserve. We are asking the mayor's team to consider letting us convert to RUBS or sub-metering 'immediately' instead of a long-term 'phase-in' that is allowed now."

Water metering brings a logistical and financial challenge for many of the state's older properties.

Crandall says he installs low-flow water devices, "and we do inspect the units annually, but what we find is that some residents remove those devices or even take longer showers because they are not satisfied with the water pressure," he says.

"Much of our portfolio includes older, smaller properties that were built in a way that the piping is not conducive to install individual meters. We were able to do it to one, eight-unit property recently, but that is an exception.

"And when you think about it, it wouldn't be prudent for us to penalize, or even evict a resident who didn't pay their personal water bill. We're talking about getting rid of a renter who pays $1,500 per month over a $30 water bill. So for our residents with a low demand for water, it just doesn't make sense."

Dan Lieberman, President, Milestone Properties, San Francisco, says the restrictions will hit the apartment industry more than homeowners. The Post profiled one homeowner who had spent $1,200 every other month to water his lawn. It wrote of another who switched from grass to sand and succulents and saved $900 on a water bill that arrives every two months.
"Renters, on average, use less water per unit than homeowners, mostly because they don't have lawns and other outdoor uses-the amount of landscape per unit in a rental community is a fraction of the amount a single-family home might have," Lieberman says. "So, the bad news is we can't just stop watering our lawns to make our quota. Even worse: Most owners probably already installed low-flow showerheads and other water-saving devices to keep costs down, so that's not an option left for them to use."

Says Nitschke, "A lot of what we need to do, we will find another way to do it. We will just have to think outside of the box."

Paul R. Bergeron III is Director of Publications, NAA.

What Happens Next

Given all the posturing on the new water restriction mandate so far, one veteran California real estate operator says the state will be in "wait-and-see" mode until at least July 1, when the State Water Resources Control Board (SWRCB) says it will implement the rule. Following is their perspective:

There are several levels of government that actually must act before Gov. Brown's announcement becomes understandable. This is typical of the political process. Since Brown made headlines, the SWRCB adopted draft regulations shortly thereafter, with many local water agencies filing exceptions and exemptions, and wanting special situations to be taken into account-including the conservation efforts they have shown to date-when determining how much they must cut.

Rates will likely be 8 percent to 36 percent (based on agency), with an overall 25 percent statewide goal, which excludes agricultural interests. Based on these targets, local agencies are to adopt rules and regulations that they think will meet those targets.

Next will likely be litigation over the fairness or merits of some of these. Ultimately, these will be the rules governing residences, including multifamily housing.
The State has many kinds of local agencies-some urban and some rural. Some have made great progress in recent years with reducing water use.
Others have not. Bottom line: Actual rules are likely to differ based on the local agency's area.

Most will require an overall reduction in use by a percentage from a fixed date in 2013. Property owners and managers will then be left to figure a way to accomplish it using a number of techniques that have been identified over the years.

Sub-Metering and RUBS

New development will almost certainly require sub-metering. Most agencies know that retrofitting sub-meters is not economically feasible; and some may try to require it. Others will need to adopt RUBS to engage residents in the process of reducing water use per unit.

Controlling irrigation (lawns, etc.) is likely, where it's not already implemented. More emphasis is likely to be on requiring up-to-date irrigation equipment, low-flow showerheads and toilets, turf replacement programs and more efficient appliances. Enforcement on all of the above will likely be more obvious (but will require the local agency to hire more staff in many areas).
Some areas may require swimming pool owners to do something such as use covers.

Check with your local apartment association for up-to-date information. - P.B.