San Francisco's water district has become the first in the nation to require newly constructed large buildings to collect and reuse nonpotable water.

First, the city approved in 2012 a program that permits developers to construct systems for collecting onsite nonpotable water and reuse it for nonpotable purposes, such as toilets and irrigation. "This voluntary program has been a tremendous success, with over 30 projects in the city either in design, construction or operation to date," according to Laura Tam, sustainable development policy director at SPUR, an early supporter of the program.
Then, in 2013 the city expanded the program to provide permits and grants for networks of buildings to share and redistribute nonpotable water. "We think that sharing and recycling water resources across property lines may have the best economies of scale for water treatment and the highest potential to offset potable water use," writes Tam.
This past summer, the San Francisco Public Utilities Commission (SFPUC) took this innovation a step further, becoming the first water utility to require all new construction over 250,000 square feet to use available graywater and rainwater sources for its nonpotable needs. Further, the grant program has been expanded to include existing buildings and networks of buildings and redefined eligibility in terms of a building's water use rather than building size.
SPUR is optimistic about the potential impact of these programs and has awarded the SFPUC its Good Government Award. Tam cautions that while Californians may see more rain this year, drought conditions can be expected to persist well into the future, and innovation is essential to sustainability. Other large water districts will benefit from the example set in the Bay Area.
"While we all need to keep saving water — and will need to even once it starts raining again — San Francisco can be proud of how local innovation and public support for water resilience is catalyzing private investment in sustainable infrastructure. Expanding building and district-scale water re-use could transform urban water demand — and especially its growth trajectory — for the Bay Area and beyond."
FULL STORY: SF’s Latest Tool to Save More Water: Pay Building Owners to Recycle It

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City of Albany
UCLA Lewis Center for Regional Policy Studies
Mpact (formerly Rail~Volution)
Chaddick Institute at DePaul University
City of Piedmont, CA
Great Falls Development Authority, Inc.
HUDs Office of Policy Development and Research