Moving Toward Water Equity & Affordability: Low Income Household Water Assistance
Water affordability issues across the United States have grown at a staggering rate the last several years and have become an even larger problem since the start of the pandemic last March. Some 13.8 million U.S. households (almost 12%) face unaffordable water bills, leading to water shutoffs and even property tax liens and foreclosures in many parts of the country due to late or non-payment of water bills. A recent study conducted by researchers at Duke University and the National Bureau of Economic Research found that a nationwide utility shutoff moratorium could have reduced COVID deaths by 14.8% and infections by 8.7%.
We know that water is both unaffordable and underpriced. Many water utilities struggle to find the capital needed to fund maintenance and replacement of aging infrastructure, some of which can pose serious public health threats due to use of outdated and toxic materials such as lead. A steep decrease in federal funding for water over the last several decades coupled with stagnating wages and population and income loss in many communities has left many water systems unable to fund necessary maintenance and upkeep without passing along rate increases to their customers. This issue disproportionately impacts low-income and communities of color, where water shutoffs due to late or non-payment are most prevalent.
At River Network, we believe that clean, safe and affordable drinking water should be accessible by all. Congress has taken notice of this issue more recently, with bills like the WATER Act and the Emergency Water is a Human Right Act being reintroduced this session in an effort to provide access to water for all. Congress also took steps toward addressing water affordability with (for now) temporary funding for a low-income home water assistance program (LIHWAP) through the omnibus package passed in December of last year and supplemented by the American Rescue Plan last month. A total of $638 million and $500 million from each respective package has been appropriated for LIHWAP, to be administered by the department of Health and Human Services (HHS). HHS has administered a similar, permanent program for several years known as the Low Income Home Energy Assistance Program (LIHEAP) — which delivers block grants to states to local utilities in administering support for home energy bill affordability for low-income customers.
Water Affordability vs. Water Assistance — What’s the Difference?
A study from the Pacific Institute defines water affordability this way: “[the] cost of essential water and sanitation should be inexpensive enough that cost does not prevent access, nor interfere with other essential expenditures.” Addressing customer water affordability — the amount charged to a given household for their water service — requires long-term and systemic change to the way that our water systems are funded and operated to ensure water systems remain safe and operational and customers do not lose access to clean, running water in their homes. This will take support from federal and local governments alike to find the funding needed to ensure clean, safe and affordable water for all.
Water assistance, usually delivered in the form of a customer assistance program (CAP), provides a stop gap for low-income households facing issues of water affordability by offering discounts or other assistance for water bills that would be otherwise unaffordable. While this system does not address the broader issue of water affordability, it can be a useful tool in providing immediate support for households who would otherwise struggle to pay their water bill.
LIHWAP — What Is It and What Does It Do?
As previously described, one approach to addressing unaffordable water bills is through customer assistance programs (CAPs). CAPs are administered by the customer’s water utility, and are offered by those utilities that are able to accrue the necessary revenue to support off-setting water bills for low-income water assistance. The Low Income Home Water Assistance Program (LIHWAP) provides federal funding to states, territories and Tribes to administer the program — ultimately distributing funds to water systems on behalf of low-income customers who would otherwise be unable to pay in full. At the moment, this is a temporary, one-time block of funding ($1.138 billion in total) to address the increase in need as a result of the pandemic. There has been very little guidance on how the administering agency — the Department of Health and Human Services (HHS) — will distribute these funds, if they will include additional provisions and requirements of states, territories and Tribes for how they administer the funds, or when the funds will actually be dispersed. Congress did not set a deadline for HHS to release the funds, and HHS has not yet calculated the state allocations or released program guidelines. The only guidance we’ve seen so far is direction from HHS to designate a lead agency (an agency tasked with managing the funds and program) by March 8, 2021.
The directed use of these funds is for water and wastewater utilities to reduce arrearages and rates of low-income customers that pay a large proportion of their income on drinking water and wastewater services by lowering their water debt and/or water bill. Eligibility for this funding is yet to be determined. Neither the December 2020 funding package nor the American Rescue plan specify the eligibility requirements beyond “low-income households, particularly those with the lowest incomes, that pay a high proportion of household income for drinking water and wastewater services.” HHS has not indicated whether it will provide additional guidance on eligibility criteria or if this will be left up to grantees.
We do know that HHS will distribute this funding to states, territories and Tribes based on the percentage of households with income less than or equal to 150% of the Federal poverty line, as well as the percentage of households that spend more than 30% of their monthly income on housing. Language from Congress does encourage recipients to rely on existing programs to provide assistance to low-income households where possible, but does not require those existing programs to be focused on water bill payment assistance programs.
It is worth noting that a number of other programs not directly targeted at water assistance but that may impact this sector have also received funding in the now three iterations of Covid relief since the start of the pandemic. This includes programs like the Emergency Rental Assistance Program authorized in the December 2020 omnibus relief package, which can be used to address utility debt or arrears (such as water bills). Finally, President Biden announced the American Jobs Plan on March 31st, a landmark proposal that includes a $111 billion investment in water infrastructure. The plan calls for eliminating all lead water lines in the US; modernizing drinking water, stormwater, and wastewater infrastructure; tackling PFAS; and addressing flooding and resilience to climate change – especially for those most vulnerable – all while creating jobs, including workforce development for disadvantaged workers.
While a lot of things hang in the balance, we know that there are ways that state and local advocates can begin to plan for and initiate conversations with their leaders to ensure equitable and timely distribution of LIHWAP funds to those in need. In spite of not knowing when exactly these funds will be delivered, how much each community will receive and what additional guidance may eventually follow, here are some things to consider in planning your advocacy strategy and conversations with state, territory or tribal leadership:
- Including guidelines for a water shutoff moratorium for the remainder of the pandemic, supported by customer assistance funds and additional funding sources as needed
- Ensuring funding reaches water systems of all sizes and capacity, serving communities most in need of support, namely low-income and communities of color
- Ensuring reporting requirements for water systems and states to track where and how the dollars flow, especially with regard to equitable distribution
- Ensuring all relevant stakeholders are brought into the conversation — representation from those working with or living within communities in need of low-income water assistance should be represented in the conversation to inform roll out, including eligibility criteria
- Using this opportunity to build a larger conversation about sustained water access and broader water affordability goals