Household Water Security in Metropolitan Detroit: Measuring the Affordability Gap
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By Dahlia Rockowitz, Chris Askew-Merwin, Malavika Sahai, Kely Markley, Cria Kay, and Tony Reames
Introduction
“Affordability gap,” “water burden,” “water poverty,” and “water inequity,” represent different terms for the same phenomenon: a household’s struggle to afford safe, sufficient and reliable water service. This lack of access to affordable water represents one of the greatest challenges to water security in Metropolitan Detroit.
The United States Environmental Protection Agency considers an affordable bill to be 4.5% of monthly household income for water and wastewater service. While there is an ongoing debate about whether percentage-of-income is the most accurate determination of affordability, it remains the federal standard and most commonly used metric.
The issue of water affordability has been an area of concern and contention in the City of Detroit for over a decade. A University of Michigan survey of low-income water customers indicates that water-related challenges span the Detroit Metro area, serving as a daily struggle for low-income households and a business challenge for water utilities.
This policy brief summarizes low-income residents’ reported experiences with water in Wayne, Oakland, and Macomb counties (Detroit and its surrounding suburbs). It analyzes a statistically significant sample of 413 low-income households to provide a regional outlook for water access and affordability. Results reveal that despite the provision of assistance, low-income customers continue to pay unaffordable water rates, requiring them to cut-back on other expenses needed to lead healthy and productive lives. It also demonstrates that low-income customers value and are willing to pay what they can afford for water and wastewater service. These findings demand an immediate programmatic and policy response at all levels of government.
Key Findings
- Unaffordability is a regional issue. Low-income residents in each county reported paying on average 10% of their monthly household income for water services, more than double the U.S. Environmental Protection Agency’s estimate of 4.5% of income as an affordable rate.
- Households value water service and are willing to pay what they can afford. Less than 2% of respondents expected free water services. There is a $45.08 gap between what residents are paying and what they estimate they can afford to pay for water services.
- Bills are paid, but unaffordable. Residents are making trade-offs to pay their bills. Eighty-four percent of low-income residents reported cutting back on monthly expenses to make payment on their water bills. Fifty-one percent of households are switching-off between energy and water bills.
- Assistance is helping reduce costs, but is not closing the affordability gap. Almost 80% of households on assistance still reported paying over 4.5% of their income for water services. Also, 94.3% were still cutting-back on monthly expenses to keep-up with their bills, and 25.6% of households not receiving assistance were unaware of assistance programs.
Policy Recommendations
Given that water bills are unaffordable for low-income residents across the region:
- Pursue system efficiencies and equitable cost sharing across the region to reduce fixed costs to residential customers.
Given that households value water service and will pay what they can afford:
- Provide adequate funding for assistance, including securing new financing, for discounts, arrearage forgiveness, household repairs and fixture replacements.
Given that bills are paid but unaffordable:
- Explore alternative rate structures — such as lifeline rates and income-based credits — that target low-income customers and safeguard public health.
- Guarantee shutoff protection for households with vulnerable populations: seniors, children and those with serious health conditions.
Given that assistance is helping but not closing the affordability gap:
- Increase outreach to residents unfamiliar with the program
- Incentivize participation in assistance programs, e.g., through financial support, co-administration, etc.
- Expand eligibility for assistance and support for those at or above 150% of the federal poverty line