We spend a great deal of time talking about how to build housing faster and make it more affordable. We debate zoning, labor shortages, financing, building codes and whether factories can deliver better results. Yet some communities are discovering that the question that stops everything is much more basic: Where will the water come from, and where will the sewage go?
A recent story from Highgate, Vermont, brings that problem into focus. It also raises a question I believe deserves more attention throughout the housing industry: Are we funding homes before we have a dependable plan for the public utilities needed to occupy them?
When Housing Money Cannot Buy a Water Connection
According to VTDigger, Cathedral Square and Highgate officials canceled plans for 30 subsidized senior apartments because the town could not provide a viable public water supply within the developer’s required timeframe. The nonprofit had assembled approximately $17 million for construction, much of it public funding with approaching deadlines. It had already spent $124,000 on planning and design that it will not recover.
An anticipated connection to a nearby arena’s well proved infeasible. Other possibilities encountered permitting obstacles or high costs, while a separate municipal sewer effort faced a funding gap. Officials also examined Vermont’s new Community and Housing Infrastructure Program but concluded it would not generate enough money for the water solution. The developer would consider returning if a public water source becomes available. VTDigger’s Highgate report
For me, the troubling part is the distance between having money committed and having homes that can actually be built. A funding announcement can look like the finish line to the public while some of the most consequential development questions remain unanswered.
The Problem Extends Beyond Vermont
In Wareham, Massachusetts, even four affordable senior housing units encountered a sewer barrier. In January 2024, the local Sewer Commission declined to exempt the Housing Authority’s proposed two duplexes from a moratorium on additional sewer flow. The project had received town funding years earlier, but permission to connect remained an obstacle.
There was eventually a way forward. In February 2024, the commission approved the connection after identifying unused capacity originally assigned to a withdrawn development. The housing required 440 gallons per day, and 510 gallons remained available. That was a successful resolution, but it illustrates how closely housing opportunities can depend on accounting for the remaining capacity in a public utility system. Wareham Week’s follow-up
The scale is larger in Durham, North Carolina. In February 2026, WRAL reported that sewer capacity problems in part of east Durham had stalled approximately 700 proposed housing units, with developers facing a potential wait until 2029 or 2030 for improvements. The affected proposals included residential and mixed-use development; they should not all be described as subsidized affordable housing. Nevertheless, a restriction that holds back hundreds of homes also makes the broader housing supply problem harder to solve.
These examples have different outcomes. Highgate was canceled, Wareham obtained approval after an initial denial, and Durham’s projects faced delays. Together, they show why utility readiness belongs near the beginning of a housing proposal.
In the West, the Water Supply Itself Is Under Pressure
A town can sometimes solve a connection problem by extending a main or enlarging a treatment facility. Securing a dependable water supply in an increasingly dry region can be much harder. A larger pipe cannot deliver water that is unavailable.
Arizona provided a clear example in 2023 when its Department of Water Resources stopped approving new assured-water-supply determinations based on groundwater in the Phoenix Active Management Area. Its model projected groundwater shortages over 100 years. Developments covered by existing certificates or designated supplies could continue, while applicants seeking new determinations needed alternative sources. This restricted certain water-dependent development approvals, rather than shutting down all Phoenix-area construction. Arizona Department of Water Resources
There has been movement toward solutions. In December 2025, Axios reported that Arizona approved its first agricultural-to-urban water conversion application, providing credits for 825 homes in Buckeye. Such programs can help individual developments proceed, although Buckeye’s mayor acknowledged that the new approaches would not meet all the city’s long-term needs.
Reservoir supplies present another challenge. In August 2026, federal officials announced additional Colorado River reductions for California, Nevada and Arizona for the following two years. Prolonged drought, poor snowpack and overuse have put enormous pressure on the river system and its reservoirs. That does not mean every community faces the same restrictions, but it does make promises of water for future development harder to keep.
A Planned Community Still Needs Utility Capacity
Planned unit developments, or PUDs, belong in this discussion because they organize multiple homes and sometimes commercial uses within an overall development plan. Depending on local rules, they can include detached houses, townhomes, condominiums, shared open space, and recreational amenities. The term describes a planning approach, not one particular kind of house.
A small community and an extensive master-planned neighborhood differ greatly in scale, but both need a credible utility plan. Approving the arrangement of buildings does not establish that enough water exists or that the receiving sewer system can handle the additional flow. PUDs within constrained service areas can therefore encounter the same connection limits and supply requirements affecting other subdivisions.
I would want to see the utility commitments for every phase before accepting the full development schedule. If the first homes can connect but later phases require a treatment expansion, the financing, responsibility, and completion date for that expansion should be clear. Future capacity should never quietly become an assumption buried in a sales presentation.
Are the Agencies Getting Enough Support
Meaningful public support exists, but the evidence does not justify saying it is sufficient everywhere. EPA identifies more than $50 billion through the Infrastructure Investment and Jobs Act for drinking water, wastewater, and stormwater infrastructure. Some of that money is dedicated to lead service lines and emerging contaminants, so it is not all available for extending service to new housing.
The needs are much larger. EPA’s seventh drinking water survey identified $625 billion in infrastructure needs over 20 years. Its separate 2022 Clean Watersheds Needs Survey reported $630.1 billion for wastewater and other clean-water needs, including stormwater and decentralized treatment. These figures cover different systems and purposes; they are not simply a price tag for new housing hookups.
Those totals also cannot be subtracted from one federal program to calculate an exact funding shortfall. States, local utilities and other sources contribute, and the timeframes differ. They do, however, reveal the scale of the work competing for money, including replacing infrastructure already serving existing customers.
Support must also include the people needed to carry projects through. EPA’s RealWaterTA initiative specifically addresses technical, managerial, and financial capabilities, workforce needs, and access to assistance, particularly for small rural systems. That recognizes an essential problem: announcing funding does not give a small town an engineering department or an experienced utility project manager.
My assessment is that communities need more dependable coordination and adequate funding. Housing agencies and utility agencies should work from compatible schedules, with early feasibility money available before major housing commitments depend on an unproven connection. Where borrowing is involved, the repayment plan also matters. A utility improvement cannot be called affordable without considering what it will cost the households paying the bills.
Gary’s Observation
For those of us working in offsite construction, this should be part of every conversation with builders and developers. A factory can improve the speed and predictability of construction, but it cannot make an unavailable water connection appear. Producing modules before the site can receive and support them risks turning a housing solution into expensive inventory.
I believe the people trying to solve these utility problems deserve both support and clear expectations. They need realistic budgets, reliable capacity information, and time to complete the work. In return, housing officials and developers need firm answers about what can be served, when service will be available, and who will pay for it.
We should keep pursuing better ways to build affordable homes. We should also recognize that a water main, pumping station, or treatment plant may be the investment that makes those homes possible. Before celebrating the next development announcement, I would like someone at the table to explain how the water gets there and how the wastewater leaves.
