Drought and Real Estate

Written by Jim the Realtor

April 6, 2015

Terry from Canada sent in this question:

I’m just wondering with the ongoing drought in California, do you see the possibility that if the drought continues and California really does run out of water will there have to be a mass migration out of the state in the future?

We have seen and heard about the desalination plant being built in Carlsbad that will add 50 million gallons of drinkable water per day, which is 7% of what the San Diego region uses now.

The cost is projected to be 20% to 25% higher than the current rate of water purchased from the MWD, so even if the drought reverses itself in the near future, the cost of water is going up.

Will that alone cause an exodus?  Probably not, but every little bit counts, and it could be the final straw for people on the edge.

The trend of our area being for affluent people will continue though.  How will they cope?

It’s not like there isn’t any water – there just isn’t any water here.

Folks who are on propane know how it works – private companies will provide the water, and make it convenient.  They will bring you the tank, hook it up for you, and then come back regularly to fill it for you.

12,500-gallon tank

The 12,500-gallon tanks like the one above cost about $10,000, and if a household can get by with 200 gallons per day they would only need to fill their tank every other month.  If you live in on a smaller lot, you can opt for a pint-size tank and get more deliveries.

http://www.utsandiego.com/news/2014/nov/04/environment-water-conservation-residential/

If you had one of these big tanks, it would only cost you about $100 today to fill it – that’s why you don’t see them…yet.  But if the drought continues, having water delivered is a possibility.

How much would you pay for water? $500 per month?  $1,000 per month?  The county has already cut back usage by 30% in recent years, and more conservation is on the way.

But people will stay as long as they can bear it, so I doubt any mass exodus from the coastal regions will happen in the short term.

Drone view of the plant:

15 Comments

  1. Jiji

    A few more of the DeSal’s projects, Make “Real” Lawns Illegal,

    We will be just fine.

    Maybe have parks with real lawns watered with recycled water.

    That’s enough.

  2. Shadash

    I got leery of Moonbeams water plan when I saw that one of the ways that he planned to lower water usage was to raise the price of water. Where is all the extra money going to go? Did he plan to pay off the clouds for more rain? I didn’t see any additional desalination plants defined as infrastructure the higher cost of water would purchase. What about additional dams?

    My problem is I always tend to follow the money when things like this are discussed. Right now it’s all funneling into local water monopolies and not into infrastructure to address the problem like desalination.

  3. elbarcosr

    If we immediately eliminated watering grass in the state, and re-allocated farm water away from high water /low yield crops, we’d pretty much fix the problem for the next several years, at least. That would give us time to cram though some more water infrastructure projects (we had many that enabled the first 20 million people to live here, we need an equivalent number to enable the next 20 million to also live here) including replacing old piping that wastes billions of gallons of water a year…. look it up. This costs lots of money and a new football stadium and high speed bullet train to nowhere are more fun projects to think about so….

  4. livinincali

    Long synthetic lawn companies.

  5. Just some guy

    Terry from Canada….

    Water policy in California is 100% a political phenomenon. @Shadash is correct…follow the money. California has plenty of water; we just don’t have the political resources to effectively manage water usage throughout the various drought cycles.

    Politics come into play when the discussion is about water access and water use rates.

    Water is yet another example where the gap between the extremely wealthy and everyone else will widen further. Look at all the nice green lawns in Los Angeles, Rancho Santa Fe, and Santa Barbara. Ironically, in Santa Barbara the average millionaire can’t afford to water their lawns and their water access has been severely restricted. But for the Oprah’s and hedge fund managers that reside there part time they pay to have water shipped by truck. The two lane roads throughout Montecito in Santa Barbara are clogged with water trucks on a daily basis. The water comes from wells that exist on private property. These landowners are selling access to their well water with almost no restrictions.

  6. Ross

    Time to read Cadillac Desert again.

  7. SD Squatter

    I can’t understand why is California moving so slow on the on-property graywater recycling for landscape use. Pretty much all the water from your shower, washing sinks, washing machine is perfectly fine for watering your garden. Now everything gets mixed up with the sewage and ends up in the ocean. Somehow graywater recycling is not catching up with the green house idea. Why not make it mandatory for all new construction?

    Thinking of retrofitting your existing system to reuse graywater? The local government is unfortunately not making it easy. The amount of regulations and permits that you have to go through will just make you give up on start.

  8. Jiji

    What ever happen to that guy who was going to tow icebergs?

    Or that guy who was going to fill up large bags on the Colombia river and tow them down ?

  9. Just some guy

    @SD Squatter

    Hard to believe that up until a few years ago, it was illegal for Californians to capture rain water from their gutters.

  10. daytrip

    Terry from Canada Said:

    “Water policy in California is 100% a political phenomenon. @Shadash is correct…follow the money. California has plenty of water; we just don’t have the political resources to effectively manage water usage throughout the various drought cycles.”

    I strongly disagree. Since 1955, the population of the United States has doubled. That’s important. It’s going to roughly double again in half that time. That’s significant.
    Southern California is desert scrubland. That’s a big plot point.
    And finally, it’s been alleged that we have about 13 million residents in California who are undocumented. Studies show these folks average around 3 kids per family. This is on top of the many thousands per year who *are* documented. That’s a lot of water. That is not reasonably sustainable. The alternatives with be expensive, and environmentally unpleasant.
    It’s not your grandpa’s California.

  11. Jiji

    LOL, with a little luck that will scare some people away.

  12. Jim the Realtor

    Google News is running that story in their headlines today, and call that guy a real estate expert!

  13. Jiji

    LOL, I am not sure about Google so much but especially in 2009-11 Yahoo would find any ER “Expert” they could find with a negative outlook and make sure that got face time on their news videos.

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