By Marianne Eppig
August 26, 2022

Across half the world—including half the United States—record-breaking droughts, extreme heat, and megafires exacerbated by climate change have established a “new normal” that challenges the future of development and growth.

Groundwater and surface water vital to communities, agriculture, and ecosystems are drying up. Wildfires devour buildings and homes in increasingly urban areas, where the land has become hot and dry. When the rains finally come, they cannot infiltrate the scorched earth, leading to deadly floods. The frequency, intensity, and duration of droughts and their cascading, interconnected impacts are increasing, and this pattern is expected to continue.

With the combination of water scarcity, population growth, and water quality issues, many communities are beginning to forecast an inability to accommodate future water needs. Some of these communities are halting real estate development, and others are requiring that developers acquire their own water supplies, which is increasingly challenging and expensive. These measures adversely affect real estate markets and affordability.

A Better Alternative to Halting Growth:
In 1992, Albuquerque, New Mexico, learned that its aquifer—the sole source of drinking water for its then 400,000 residents—was rapidly running out of water. Not only did the aquifer contain far less water than previously believed, but it was also being pumped twice as fast as nature was replenishing it.

Rather than deny the reality or halt growth, Albuquerque took action. They started with a water conservation program to reduce water demand. The Albuquerque Bernalillo County Water Utility Authority fixed leaks in its distribution system and offered rebates to encourage customers to update older fixtures and appliances with more efficient versions. It educated residents about outdoor irrigation, reducing water waste, and paid locals to convert lawns to drought-tolerant landscaping. It began pricing its water with an increasing block rate structure through which the unit cost of water increases as water use rises, thus incentivizing customers to conserve water.

These efforts halted depletion of the city’s aquifer by the year 2000, despite population growth. Albuquerque’s total water demand per capita has dropped 50 percent since the conservation program began in 1995. In addition to water conservation, water reuse is now part of the city’s water portfolio. Industrial effluent is treated and repurposed for parks and golf courses and reclaimed wastewater from the Water Authority’s sewage treatment plant is delivered to irrigation customers.

These efforts continue to this day and have allowed Albuquerque to meet the city’s water needs for at least 100 years, despite an arid climate, extreme drought, and population growth.

Taking Action across Sectors
While every community is not as proactive as Albuquerque has been, that does not mean the rest of us should throw up our hands and wait for the worst.

Real estate and land use professionals are already leading the way with innovative solutions. In June 2022, ULI released the report Water Wise: Strategies for Drought-Resilient Development, which features best practices and case studies for incorporating water-saving measures into real estate development projects, alongside policy recommendations for integrating land use and water management.

The report finds that investing in water efficiency and conservation measures at the site scale mitigates the risks of water shortages, policy changes, and rising water prices. It also garners water and energy cost savings, increasing asset value and providing long-term value to owners and investors alike.

Strategies for Drought-Resilient Real Estate
Despite diminishing freshwater supplies, increasing water conservation and efficiency will allow future population and economic growth to occur in a sustainable way. Since real estate development and land use patterns have a substantial influence on the efficiency of water use and the impact of water shortages, real estate developers and land use professionals have a significant role to play.

Water Wise: Strategies for Drought-Resilient Development offers recommendations for water-smart development and landscaping that are organized into sections for pre-development, indoor, outdoor, ongoing management, and public policy strategies. The following examples demonstrate how water-smart strategies can provide co-benefits, enhancing the bottom line of real estate projects while also supporting the long-term sustainability of communities and environments.

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