Canadian Municipal Water eBulletin

AWWA, partners put forth new affordability metric

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 AWWA, the National Association of Clean Water Agencies and Water Environment Federation together produced a report that suggests a new approach for assessing community and household affordability for water services.

"Developing a New Framework for Household Affordability and Financial Capability Assessment in the Water Sector” builds on the October 2017 National Academy of Public Administration report on community water affordability. The associations are hopeful the new analysis will assist EPA as it evaluates the definition of community affordability for water services. The proposed framework is an alternative to current reliance on median household income as the primary measure of affordability in regulatory decision-making. It suggests the following two-part metric to capture both economic burdens of water service on low-income households and the level of economic stress on households in a community.

  • Household Burden Indicator (HBI): The combined cost of water service (e.g., drinking water, wastewater and stormwater) as a percent of the 20th percentile of community household income (the lowest quintile income), plus
  • Poverty Prevalence Indicator (PPI): The percentage of households in the community that are at or below 200% of federal poverty level.