To the List of Rising Costs for Co-ops and Condos, Add Water
May 25, 2022 — Water rates could jump by 4.9% this summer, biggest hike in nearly a decade.
The list of rising expenses for co-op and condo boards keeps getting longer — from property taxes to energy, insurance, facade repairs, staff pay and the looming cost of reducing building carbon emissions. Now boards can add water to the list.
The city’s Department of Environmental Protection (DEP) has proposed a 4.9% water rate hike — the biggest jump since 2014, when rates rose by 5.6%. Since 2002, the sharpest hike was 14% in 2009, a time when double-digit annual increases were common.
The proposed 4.9% hike, if approved by the New York City Water Board in June, would boost DEP’s revenue from $3.5 billion this fiscal year to $3.7 billion in fiscal year 2023 — and it would add about $4 per apartment to the water bill of multifamily dwellings, including co-ops and condos. While that’s not a crippling number, it will surely add to the pain of delinquent buildings that are now $778 million behind on their water bills, according to the DEP. The department hopes to recoup those arrears by sending out delinquency notices, which were halted during the pandemic’s utility shut-off moratorium.
There were no rate increases in 2017, 2018 and 2021.
“I think the proposed rate hike is reasonable, considering the trend over the past several years,” says Ana Champeny, vice president for research at the Citizens Budget Commission (CBC), a nonpartisan group that monitors city and state finances. “I appreciate that homeowners are under a lot of pressure, but you need to have periodic rate increases because you don’t want to defer maintenance on the infrastructure of water supply and wastewater treatment.”
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The DEP delivers more than a billion gallons of potable water to the city every day while managing stormwater runoff, treating 1.3 billion gallons of wastewater and maintaining more than 7,400 miles of pipes.
“There’s billions of dollars worth of infrastructure that needs to be updated,” Mike Dulong, a senior attorney for Riverkeeper, the nonprofit dedicated to the Hudson, tells THE CITY. The importance of the infrastructure that handles stormwater runoff was highlighted by the deadly flooding during Hurricane Ida last fall — and by the increasingly erratic weather brought on by climate change.
The DEP is in the midst of a three-year study on how to make water rates more affordable and more equitable. Champeny of the CBC notes that the current system is “counterintuitive.” Many of the DEP’s costs are fixed, including compliance with unfunded federal mandates, so if customers reduce water usage, the rate has to increase to cover expenses. This reduces the incentive to conserve.
Under another counterintuitive facet of the current system, customers pay for the water they use — but not for how much stormwater they discharge. Therefore, a large store with a flat roof and a sprawling parking lot might get a smaller water bill than a co-op apartment building, even though the store generates far more runoff that the city must manage. The DEP’s study is due next year.
Meanwhile, anyone concerned about the looming 4.9% percent rate hike can attend a virtual public hearing to be held by the Water Board on Thursday, May 26 at 6 p.m. To attend the meeting or offer testimony, click here.