Water Credits or Fixture Units Are An Important Part of a Home's Value
We take water usage very seriously here on the Monterey Peninsula. In fact, we have a government authority that is in charge of water, the Monterey Peninsula Water Management District, which was formed in 1978.
To use water on the Monterey Peninsula, including Carmel, Carmel Valley, and Pebble Beach, homeowners need a permit from the MPWMD. You can't install a water meter on a lot without a permit, nor can you remodel a home and increase the number of water fixtures without a permit from the MPWMD. This is in addition to permit and zoning requirements of the municipality.
First, determine if your property, or the property you are interested in purchasing, is within the district.
The district, indicated in green, includes the following municipalities:
- Del-Rey Oaks
- Pacific Grove
- Sand City
- Monterey Peninsula Airport District
- and portions of Unincorporated Monterey County including Pebble Beach Carmel (which encircles Carmel-by-the-Sea) and Carmel Valley
Why Do Some Homes Have Lots of Credits and Some Very Few?
Often I will walk into a home with a client and be faced with a confused look when I explain that this 2,800 square foot home is limited to 2 bathrooms while a 1,000 square foot home we just visited could have 3 bathrooms if the buyer wished to add one during a remodel. Why is this the case? The number of fixture units in a house is set the first time an MPWMD inspector tours the home. So, a small home with a lot of water fixtures (a laundry sink, a vegetable sink, a bar sink, extra large bathtub, even a bidet) will have more water for future remodels than a larger home with no extraneous water credits.
A basic full bath typically uses 4.7 water credits and a typical kitchen uses two. Fixture units can be reassigned. For example, a vegetable sink in the kitchen can be removed and replaced with a bar sink elsewhere in the home. A master bathroom can have two sinks without the second sink costing any units, and a large bathtub costs three units while a regular bath only costs two.
A list of the "values" of different fixtures is available from the MPWMD here.
For Sale: 3-bedroom, 2-bath, 14-water credit home
When you buy a home, you are buying a finite number of water credits. The number of water credits available limits what you can do with the property--when it comes to adding bathrooms, sinks, or anything that uses water.
There are a few nuances to this process. A few years ago the MPWMD acknowledged that today it is reasonable for any house to have at least 2 bathrooms. So, under Ordinance 98 (also known as the second bathroom protocol,) they will allow you to add a second bath to a one bath home, even if the one bath home lacks sufficient water credits for the second bath. A couple of key restrictions with Ordinance 98. First, you can't then go on to add a half bath. The second bath is "free" but any additional bathroom fixtures cannot be added. Second, the one bath home can't be new. You can't build a one bath home this year and add a second bath under Ordinance 98 a few years from now.
Can you buy water credits? Yes, but only in certain areas.
There are also a few unique areas on the Peninsula with other alternatives. In Pebble Beach at the moment, it is possible to purchase water credits from the Pebble Beach Company.
Properties located in the former Water West System (a water distribution system now run by Cal-Am) in Carmel Valley are entitled to water from an allocation that transferred with the water system. If your property is in this area it is possible to petition and secure water credits.
And just recently, because of the donation of some water rights associated with property previously owned by Clint and Maggie Eastwood, it is possible to buy credits in Carmel under the Malpaso Water Agreement.
The details of buying water credits (fixture units) are too complex for this blog post. If you are thinking of buying a home and then buying water, or buying water for an existing home in advance of its sale, please email or call for more details.
Liberating Water Fixtures with Low Flow Appliances
Another option is to "liberate" a credit or two by switching to low flow appliances. For example, you can replace your current dishwasher (2.0 units) with a low flow dishwasher (1.5 units). This will leave you with .5 credits you can put elsewhere. You might also replace your washing machine (2.0 units) with an extremely efficient model (1.0 units). Before making a purchase decision based on your ability to "squeeze" water credits out of what is in the home, make sure you fully understand the process.
Typically low flow appliances require a permit from MPWMD and a deed restriction. [At the moment there is an opportunity to change out toilets and earn credits (good for five or more years) that does not require a deed restriction to secure the credits. Depending on how you use the credits, a deed restriction may be required at the time you apply to use them. Read more about the required change in toilets beginning in January 2017, and how to earn credits as part of the process: Earning water credits for toilet upgrade.]
Questions and Resources
It is clear that there are many aspects of these water regulations that can impact a home's value. Feel free to send me an email with questions, as answering any possible scenario in this post is impractical. If you are working with an architect and considering a remodel be sure to discuss water fixtures.
If you have the Assessor Parcel Number (APN) for the homes you are considering you can contact the water district and determine the number of fixture units on the property. They can also usually look up information by address. If you are already working with a realtor, he or she should provide you with the water district report during your negotiations to purchase the home.
If you would like to talk about a specific property, or the concept of water credits, drop me an email or give me a call.
Water regulations are constantly shifting. Make sure you fully understand what you can and can't do on a given property. If you are planning a remodel talk directly to water management and ask your architect and contractor to explain the steps involved. If you are buying a home, make sure your REALTOR® understands water credits and provides you with the current rules and reports.