Climate change could significantly worsen urban water affordability by increasing infrastructure costs and household water bills by mid-century, according to a new study published in the journal Nature Sustainability on July 8, 2026.
The study is the first to comprehensively examine how climate change, aging infrastructure, utility investment decisions and household water demand interact to affect water affordability. While previous research has focused mainly on the costs and reliability of water systems, this study assesses how those rising costs impact households across different income groups.
To understand these impacts, the researchers used Santa Cruz, California, as a case study. The coastal city relies on limited local water sources and has already implemented many low-cost conservation measures, leaving expensive infrastructure projects such as desalination or wastewater reuse as the primary options for improving water security.
Using a modeling framework developed with data from Santa Cruz’s water department, the researchers found that climate change alone could leave an additional 7-16 per cent of households facing unaffordable water bills. By mid-century, adapting to worsening water scarcity could nearly double the city’s median household water bills.
Currently, about 19 per cent of Santa Cruz households already spend more on water than the affordability threshold set by the US Environmental Protection Agency (EPA). Under a moderate climate scenario, this proportion could increase to 26 per cent. In a drier climate requiring additional infrastructure to ensure reliable water supplies, it could rise further to 35 per cent.
The burden would fall most heavily on low-income families. Under the study’s most severe dry-climate scenario, the median monthly water bill for the city’s poorest households could rise from around $60 to $111. More than five per cent of households could end up spending nearly one-third of their income on water, forcing many to choose between paying for water, food, healthcare and other essentials.
The study also highlights trade-offs between affordability and water security. Investing early in large desalination facilities would improve water security during droughts but substantially increase household bills. Delaying these investments would reduce short-term costs but expose residents to more frequent water shortages during drought years.
The average cost of tap water in the United States has risen three times faster than inflation over the past two decades, mainly due to aging infrastructure and delayed maintenance. Climate change is adding further pressure by increasing the need for costly upgrades and water management measures.
Drought and water scarcity remain the biggest threats to urban water supplies. Rising temperatures and changing rainfall patterns are making droughts more frequent and severe, reducing the reliability of water sources.
The researchers say their modelling framework can also be applied to other climate-vulnerable cities, such as Los Angeles, San Diego, San Francisco, Cape Town (South Africa), and Melbourne (Australia) — facing vulnerabilities similar to those of Santa Cruz.
South Africa, which receives only about 464 mm of rainfall annually—less than half the global average, is among the world’s driest countries. In 2018, Cape Town came close to running out of water, forcing authorities to limit residents to 50 litres of water per person per day. Strict rationing and conservation measures ultimately helped the city avoid “Day Zero.”
Melbourne city in Australia, is also facing increasing water stress. Between 1 March and 1 June 2026, the city’s reservoirs fell by 6.1 per cent (111 billion litres). Storage levels are 9.5 per cent (172.1 billion litres) lower than a year ago and 24 per cent (about 432 billion litres) lower than two years ago, reflecting prolonged dry conditions, record-low inflows and rising water demand.
These examples illustrate how climate change is exacerbating water shortages, increasing the costs of maintaining urban water systems, and highlighting the need for long-term investments in resilient water infrastructure and conservation strategies.
The study concludes that addressing climate-driven water affordability will require more than local utility action. It calls for regulatory reforms, greater public investment in climate-resilient water infrastructure and targeted financial assistance for vulnerable households. The researchers also recommend that future climate adaptation planning assess water affordability alongside supply reliability to prevent climate adaptation costs from disproportionately affecting low-income communities.