NRDC: Challenges and Solutions to the Increasing Water Crisis
Sources of new water like bringing water from beyond neighboring states and seawater desalinization are unavailable or expensive; building a desalinization plant for standby reliability can be extremely costly due to startup costs.
We are in an extreme drought, and our weather will only get more severe; we need to replenish depleted groundwater basins to store water for dry years when we do have a wet season.
Drought has an uneven impact due to the water rights priority system; those with senior rights receive a greater portion of available water (like SF for Hetch Hetchy) while junior rights holders receive none. Water rights structure creates a barrier to change/innovation.
That said, countries like Australia and Israel have shown that there is tremendous positive impact when employing a combination of practices and innovations at local levels: more efficient crop use and right-sizing irrigated land to match supplies, greater water recycling and reuse (treated water is fine to drink), consumer water reduction practices (no lawn, low flow spigots). Studies show that CA could generate up to 14 million acre-feet per year with greater use of these tools. Regulatory changes are needed to streamline use of these tools, such as allowing for direct potable reuse of recycled water.