Monterey Peninsula water district to draft formal allocation policy amid housing mandate pressures

Monterey Peninsula water district to draft formal allocation policy amid housing mandate pressuresFacing pressure from local planners struggling to balance Regional Housing Needs Allocation (RHNA) targets with limited water supplies, the Monterey Peninsula Water Management District will collaborate with municipalities to develop a predictable water allocation framework.

Representatives from Carmel-by-the-Sea, Seaside, and Monterey County requested clear criteria and triggers for future water allocations.

Municipalities expressed reluctance to exhaust their current water allocations without knowing how or when they can acquire more.

The District previously allocated one-third of projected 25-year demand in 2025, holding approximately 2,100 acre-feet in reserve.

The Board directed staff to convene a Technical Advisory Committee to collaboratively establish a formal allocation structure.

The Monterey Peninsula Water Management District (MPWMD) Board of Directors has directed its staff to collaborate with local municipalities to develop a formalized water allocation policy, following concerns that the current ad-hoc approach is hindering regional housing development. During the Board's August 17, 2026 meeting, representatives from the cities of Carmel-by-the-Sea and Seaside, along with Monterey County, urged the District to provide written policy guidance on how future water will be distributed once current allocations are exhausted. The region is currently operating under a state-issued Cease and Desist Order (CDO) that imposes a moratorium on new water meters, making water a strictly limited resource for new development. Local planners emphasized that they are caught between state-mandated Regional Housing Needs Allocation (RHNA) targets and the District's lack of a predictable framework for future water distribution. Andrew Myrick, representing the City of Seaside, compared the city's current water allocation to a bank account. "If you've got a bank account, you have money, and you don't know where your next dollar is coming from, you're going to manage that very carefully," Myrick told the Board. "You're only going to use the money on your top priorities... As of this moment, we don't know where our next water is coming from." Craig Spencer, Monterey County Director of Housing and Community Development, echoed these concerns, noting that water remains a primary barrier to housing. Spencer pointed out that jurisdictions were allocated less water than needed to meet their full RHNA obligations. "Do we give the water that we're allocated... to anyone who asks for it for any project?" Spencer asked. "What are we striving for and how do we have some certainty that we'll get water in the end?" In a draft response to a July letter from Carmel-by-the-Sea, MPWMD General Manager David Stoldt had initially rejected the idea of a formal policy, stating that the District prefers to retain flexibility and is not a land-use agency. Stoldt explained that during the March 2025 allocation process, the District distributed approximately one-third of each jurisdiction's anticipated 25-year demand while retaining roughly 2,100 acre-feet in reserve. Stoldt also highlighted significant inconsistencies between the aggressive RHNA housing targets and the much lower population growth forecasts provided by the Association of Monterey Bay Area Governments (AMBAG). He noted that the District currently expects jurisdictions to utilize approximately 80 percent of their allocated water before the District will entertain discussions for additional allocations. However, local officials argued that an 80 percent threshold is too close to depletion to allow for responsible long-term planning, particularly for affordable housing projects that can take years to secure financing and approvals. Rather than adopting the General Manager's draft response, the Board opted for a collaborative approach. Director Daniels proposed directing staff to work with local jurisdictions through a Technical Advisory Committee (TAC) to replace discretionary allocations with clear criteria and a predictable framework. "I think unintentionally in this process, we made all of our jurisdictions have to become water allocation professionals," Director Daniels said. "I'm 100% in support of working with the jurisdictions on this request through a TAC or a collaborative form of some sort to create this criteria." The Board unanimously supported the direction to convene the TAC. The timing of a new policy will likely parallel the District's ongoing efforts to lift the CDO's moratorium on new meters. District Counsel confirmed that MPWMD is currently submitting written testimony to the State Water Resources Control Board seeking modification of the CDO, with a hearing scheduled for November 2026.