Local Water Suply Requirements Change The Dynamics Of Water Markets

摘要

Many factors affect local water markets such as drought conditions and urban growth. However, a growing influence on market prices and activity is regulation of new housing developments. Today, more local governments throughout the West are requiring developers to dedicate water supplies or pay cash in-lieu-of water rights. The mitigation laws generally require developers to provide or pay for additional water supplies in exchange for development credits. The buyers can transfer the credits to a third party or directly apply them to a new development. The rules have allowed the communities to grow in population without burdening the current residents with the cost of increasing water supplies. The rules have also changed the dynamics of the local water markets.