Economy Watch: Water Crisis: Today California, Tomorrow Everywhere Else?

By Dees Stribling, Contributing Editor

The rest of the nation should hope that California isn’t going to be a bellwether when it comes to a dire water shortage, but with the long-term prospect of a warmer and drier climate worldwide, it might be a good idea to at least pay attention to what’s going on in California as it tries to deal with its drought. Commercial real estate has a significant part to play in dealing with the drought, and to a large degree, property owners and managers in California are already well aware of the situation and are taking steps to cut their water usage.

Some background: California’s water problems are more than a shortage of rain and snowfall in recent years, though that’s certainly the case (indeed, for the state the 21st century might be drier than the 20th century, which seems to have been wetter than the long-term average). Other factors include population growth, the fact that water infrastructure such as reservoirs haven’t been updated or enlarged enough in recent decades to keep up with demand growth, and the ecological reality that much of southern California is, in its natural state, a desert. On April 1, California Gov. Jerry Brown inked an executive order calling for a statewide 25 percent reduction in potable urban water usage through February 28, 2016.

Municipalities are now formalizing their reduction measures. According to NAIOP San Diego, commercial property owners should anticipate a mandatory 20 percent reduction in their water consumption. The first thing to go will be landscape irrigation and ornamental fountains. Some properties, such as the Hotel Fullerton in Fullerton, Calif., are going so far as to replace their natural grass with artificial turf. There will be aggressive rate increases for water, including a tiered rate structure, to facilitate reduction. Also, owners can expect to face stiff fine penalties for non-compliance. A few properties might receive waivers from the new rules, but not many, such as for hospitals or other health-care oriented properties. If things get even worse, municipalities could impose construction moratoriums and deny new water meters.

Is this the future for the rest of the country? It’s easy to image a nationwide climate scenario in future decades in which it is, so it behooves properties owners to consider what they would do in such circumstances—or even in a relatively mild water shortage. To focus on one property type, there are a number of short- and medium-term actions that office building owners can take to reduce their properties’ water usage. Savings are possible in every category of water use for office buildings, which are kitchen and dishwashing; landscaping; cooling and heating; and restroom and other uses by tenants. Among other things, property managers can plant drought-resistant landscapes (or ever xeriscapes, which need little water), install WaterSense-labeled fixtures, and consider alternate water sources, such as air handler condensate and captured rainwater.