On the Monterey Peninsula, we talk endlessly about the housing crisis. We argue about zoning, density and affordability requirements. But there is a quieter bottleneck that has become just as decisive as land or financing: water policy.
For nearly a decade, a cease-and-desist order intended to stop illegal diversions from the Carmel River has effectively frozen new water connections across much of the Peninsula. That freeze has blocked affordable housing, workforce housing and modest infill projects, even as verified water supplies have improved.
The Monterey Peninsula Water Management District has now asked the State Water Resources Control Board to update that order based on current facts, not outdated fears. California American Water, however, appears not to support local housing solutions. Instead, Cal Am is urging delay — or outright denial — of the Water District’s request by invoking speculative future risks and tying relief to the completion of a costly desalination plant that is not required to meet near-term demand.
That approach would be a mistake, and one with real social consequences.
The facts on water supply have changed. The core question before the State Water Board is simple: Is there a realistic risk today — or in the immediately foreseeable future — that lifting the moratorium on new connections would cause renewed illegal diversions from the Carmel River? The answer, based on verified data, is no.
There has been no trespass under the CDO for four consecutive years. More importantly, the California Public Utilities Commission has already determined current and near-term water supply and demand, finding no imminent threat of violation — and did so independently of any future desalination project. Today, the Peninsula’s water portfolio is far more diverse than Cal Am suggests. Pure Water Monterey has reliably delivered recycled water since 2020 and is now expanded. Groundwater from the Seaside Basin remains an important supply. Aquifer Storage and Recovery can provide over 1,200 acre-feet per year on average. Smaller desalination and groundwater sources further reduce reliance on the Carmel River. This is not speculation. It is operational reality.
Delay has a human cost. What often gets lost in legal arguments is what the moratorium actually does on the ground.
When water connections are frozen, housing is frozen — not just market-rate housing, but affordable units, supportive housing, and modest workforce projects that already comply with local land-use rules. Cities and nonprofits can approve projects, assemble funding, and secure community support, only to hit an immovable barrier at the water permit stage. The result is perverse: the very communities most harmed by the housing shortage — renters, seniors, service workers — are asked to wait indefinitely for a “perfect” water future, even while verified supply exists today. Artificial scarcity created by regulatory inertia is a policy choice, not a fact of life today on the Monterey Peninsula
Affordable water is an equity issue. Cal Am argues that maximizing use of the Carmel River is dangerous. Yet when Cal Am used 97–99% of its lawful Carmel River allocation in recent years, it did so precisely because that source is one of the least expensive supplies available, reducing costs to customers. Today, over 60% of current Peninsula demand can be met without Carmel River diversions. This matters for housing.
Expensive water — especially desalinated water — translates directly into higher housing costs. If new homes can only be served by the most expensive marginal supply, affordability goals collapse before construction even begins.
The Water District’s proposal does not authorize illegal diversions or reckless growth. It establishes guardrails, monitoring triggers, and automatic rollback provisions that would reinstate the moratorium well before supply limits are tested. That is prudent management, not wishful thinking.
Desalination should not be a ransom note. Perhaps most troubling is the suggestion that no relief should occur until a large, capital-intensive desalination project is completed, who knows when.
The CPUC explicitly did not find that desalination is necessary to meet current or near-term demand. They found that only another 2,528 AFY would be needed 25 years from now. Linking housing approvals to an unbuilt facility that would produce over three times that much water — years from operation and laden with financial and environmental uncertainty — effectively holds communities hostage to a single project timeline.
That is not responsible planning. It is regulatory overreach. It’s time to align water policy with reality. The purpose of the original cease-and-desist order was to stop illegal diversions, not to permanently freeze a region’s future. That purpose has been met.
The State Water Board now has a chance to do something rare in California policy: update an enforcement order to reflect success, not failure. By modifying the CDO based on current supply, verified demand and enforceable safeguards, the Board can protect the Carmel River and allow desperately needed housing to move forward.
Affordable housing requires affordable water. We can have affordable water — if we are willing to govern based on facts, not fear.
Michael D. DeLapa is the executive director of LandWatch.
