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I lived in Santa Fe. I got one of my toilets swapped out for free under the program mentioned in the article, or rather, paid for by those wanting to build a new residence in the city.

The article points out that "Santa Fe has the most expensive water out of 30 American cities surveyed by Circle of Blue ... and the city’s residents are among the thriftiest when it comes to turning on the tap."

One of the reasons is that Santa Fe has very little in the way of watershed. It's under 200K acres (map http://www.santafenm.gov/upper_watershed ). That supplies about 1/2 of the drinking water during non-drought years.

Much of the remaining water come from groundwater. The Buckman well field drills down about 1,000 feet to get to the groundwater. Once at the surface, it's pumped up over 1,000 ft to get to the city, which is about 15 miles away. (See http://academic.emporia.edu/schulmem/hydro/TERM%20PROJECTS/W... ). Over-pumping has damaged the aquifer.

Instead the city and county acquired water rights for the Rio Grande and build the Buckman Direct Diversion. It still needs to pump that water up 1,000+ feet. (See http://www.water-technology.net/projects/buckman-direct-dive... .)

Necessity helps change behavior.