As a result of a convergence of 2007 events, water supply is acritical issue for development in the foreseeable future. NAIOPSoCal and the California Business Properties Association (CBPA) areconcerned about how water agencies will respond to thesecircumstances, and are working with state and local policymakers toaddress the issue. However, signs suggest that, absent a series ofwet winters or enactment of a major water bond that includesincreased off-stream storage capacity, we should prepare forrestrictions and even moratoria on new water service connections.To avoid these consequences, the development industry needs to getinvolved with the policies and the actions taken by local water andcommunity services districts (CSDs).

Most of us know we received little snow or rain last winter.This spring, the Sierra Nevada snow pack was half the normalamount. A federal court ruled on Aug. 31 that water exports fromthe Sacramento-San Joaquin Delta must be cut to protect anendangered fish—the Delta Smelt. The Metropolitan Water District(MWD) estimates it may lose 30% of its Northern California suppliesas a result.

In February, the California Supreme Court struck down aresidential/commercial development project under the CaliforniaEnvironmental Quality Act (CEQA), stating that the project'sEnvironmental Impact Report (EIR) did not address water supplyissues. In so doing, the Court created more rigorous standards forwater supply analyses in EIRs.