News of the lead-tainted water supply in Flint, Michigan, poured over the nation. With lead levels five times higher than the level of concern for safe drinking, residents are looking at who to blame.

Lives vs. budget

The tainted water in Flint will have lifelong effects for thousands of residents. With the city’s financial woes, in 2011 it was placed in receivership by the state’s governor. The team put into place to cut costs and get the city stable decided to switch the water supply from Lake Huron’s abundant high-quality water, to a subpar river supply.

However, the river supply was corrosive to iron pipes. To further save about $9,000 the team decided not to introduce a corrosion inhibitor into the water to prevent the main iron pipes from leaching. When the iron rich water reached the lead pipes used to bring water to half the homes, lead leached into the water.

The business of delivering water

We rely on our local municipality to deliver water to us. There is no other product produced in such a manner as that of water. We often take for granted turning on our faucet and filling a glass of potable water for our consumption.

What exactly are we paying for? Water is a free resource; what we are paying for is the delivery of the water.

Our infrastructure is failing

Throughout the nation we see many cities using 100-year-old or more pipes to deliver water to homes and businesses. Not only are these systems susceptible to failure, but over the many years of usage the interior of the iron pipes gets built up with corrosion, creating a smaller-diameter pipe for water to flow. This results in more pressure needed to deliver water — more pressure means higher operating costs and higher probability of failure.

Replacement of the delivery system should be built in to the fees the consumer pays, but not always. Expect as these systems fail for water rates to go up to pay for replacement.

Real estate values = availability of water

Having water available on your land creates value, as in many cases without it the value of your land is greatly diminished or even totally unusable. You must have availability of a sustainable water source either from the ground or provided by a municipality or water district in order to develop the site.

We trust our municipality to provide us with clean, pure, potable water. We rely a great deal on our providers to deliver us potable drinking water to maintain life and property values. With the lack of available water in California and the aging infrastructure, we have a lot to consider in our future.

Burt M. Polson, CCIM, is a real estate broker with ACRES Real Estate Services Inc. helping clients sell, buy and lease real estate. Reach him at 707-254-8000, burt@acresinfo.com or BurtPolson.com.

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