Rising utility costs in affordable housing
Protect your pro forma from rising water and sewer rates
Affordable housing pro formas have almost no room to absorb a surprise. Rents are capped by regulatory agreements, equity is scarce, and operating expenses are the one line you can still influence. Water and sewer costs used to be predictable. They are not anymore.
The American Society of Civil Engineers graded U.S. wastewater infrastructure a D+ in its 2025 report card, and cities are funding repairs through multi-year rate escalations. Los Angeles sewer charges are set to rise roughly 106% between 2024 and 2028. Honolulu's will climb about 115% by 2035. San Diego's cumulative rates will rise 92% by 2029. Those increases land on your operating budget, and unlike most expenses, there is no mechanism to negotiate them down.