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The Economic Impact of Drought - 9/10/15

A four-year drought has gripped California.  The drought has altered life in the Golden State by forcing severe cutbacks in water for farms, homeowners and businesses.  At the same time, California’s red hot technology industries and rapid population growth are increasing demand for all types of resources, including water. 

The State of California has some ability to place restrictions on development, including a recent restriction on the size of lawns permitted for new homes.  As reported in the New York Times, there is also a law requiring developers of projects including more than 500 homes to demonstrate where they will acquire water.  Beyond that, decisions regarding land use are largely left to local city councils and planning commissions. 

Water consumption is not necessarily at the top of their list of concerns, since no single community’s actions can solve a statewide problem.  Accordingly, more than two hundred and eighty thousand housing units have been approved for construction across the Sacramento region alone.  Another 3,000 homes and two schools are planned for an area outside of Bakersfield, where some communities have already run out of water.  Some developers say the real problem is agriculture, which uses water with greater intensity. 

Anirban Basu, Chariman Chief Executive Officer of Sage Policy Group (SPG), is one of the Mid-Atlantic region's leading economic consultants. Prior to founding SPG he was Chairman and CEO of Optimal Solutions Group, a company he co-founded and which continues to operate. Anirban has also served as Director of Applied Economics and Senior Economist for RESI, where he used his extensive knowledge of the Mid-Atlantic region to support numerous clients in their strategic decision-making processes. Clients have included the Maryland Department of Transportation, St. Paul Companies, Baltimore Symphony Orchestra Players Committee and the Martin O'Malley mayoral campaign.