New Reports Offer Details on San Diego’s Water Costs and Challenges

Policy & Innovation Center’s Research Exposes Root Causes of Skyrocketing Water Bills – and Offers Strategies for Change 

SAN DIEGO (June 18, 2025) – As water bills continue to climb in San Diego, the pressing question resonates across the region: “Why is our water so expensive – and what can be done about it?”  

The Policy & Innovation Center (PIC), San Diego’s nonprofit think tank, has released five reports that reveal the complex and often overlooked forces behind rising water costs. With affordability top of mind for water utilities and many San Diegans, the research offers historical context, potential strategies to bring resources to the region and to support consumers. 

“Over 40% of low-income households in San Diego are spending a fifth of their income just on utilities. No family should have to choose between clean water and other basic needs,” said Daniel Enemark, PhD. “Policymakers can use the reports’ data and tools to pursue greater affordability while managing the delicate balance between necessary infrastructure investments and fiscal stability.” 

The Real Cost of Clean Water 

The five reports, supported by an American Rescue Plan Act grant from the County of San Diego, explain why water in San Diego costs more than in most major U.S. cities. Chief among them: the region’s decades-long investment in supply reliability and infrastructure investment. 

Using a “trilemma” framework — ratepayer affordability, infrastructure reliability, and fiscal stability — the reports highlight the hard trade-offs local water agencies face and the heavy price paid by ratepayers. 

Why Water Discounts Are Limited in California 

Unlike electricity or internet providers, California’s public water utilities are prohibited from offering income-based discounts using water rate revenues due to Proposition 218, a voter-approved constitutional amendment that mandates all publicly collected property-related fees reflect only the cost of service. This legal constraint blocks the use of equitable rate structures or even incentives to use water responsibly and makes one of life’s most basic needs unaffordable for many families. 

PIC’s research outlines a clear, multifaceted path forward, with potential strategies including smarter, innovative financing tools and grants, advanced water-saving technology to enhance reliability and creative pursuit of non-rate revenue to fund customer assistance programs. 

 The reports detail the following: 

1. The Story of San Diego’s Water 
   A deep dive into the region’s water history and infrastructure investments that shape today’s bills. 

2. Water Funding: Challenges and Solutions 
   Unpacking national best practices, and how inflation, climate impacts and aging infrastructure drive costs — and what strategies utilities can use to reinvest wisely. 

3. Water Affordability 
   Water costs in San Diego range from $27 to $89 per household per month. For many households, that’s unaffordable when considering San Diego’s already high cost of living.  

4. Customer Assistance Programs for Water Bills 
   An examination of how Prop 218 limits water agencies’ ability to offer discounts (like programs offered by energy utilities or phone companies) and the creative strategies some agencies have pursued to improve affordability. PIC identified novel local strategies (e.g., the use of cell tower leases on water agency land) that can fund customer assistance programs.  

5. Lessons from Federal Water Assistance Programs 
   The now-sunsetted Low-Income Household Water Assistance Program (LIHWAP) reveals what’s possible when targeted relief is available — and the need to create sustained funding resources for customer assistance programs. 

This report series lands at a critical moment, as the region confronts more extreme weather events, aging systems and widening affordability gaps. “Our research highlights a range of approaches used by water utilities locally and nationally to improve affordability while maintaining infrastructure reliability,” said Dr. Enemark. “We look forward to continued collaboration with water providers in the region to assist with data-driven solutions to improve affordability for San Diegans.” 

For more information, visit ThinkPIC.org/Water.  

About Policy & Innovation Center
The Policy & Innovation Center is a think tank and social-impact incubator. PIC conducts research and policy analysis to identify creative solutions to our communities’ biggest problems, and builds cross-sector, multijurisdictional partnerships to advance those solutions. Founding partners include The Brookings Institution, County of San Diego, and San Diego Foundation. For more information, visit thinkpic.org.