More than one in five households in the U.S. depend on individual septic systems or small community cluster systems to treat their wastewater, with some states such as Vermont reporting that up to 55% of households use septic systems.
Here in New York State, around 22% of New Yorkers rely on septic systems to manage their household wastewater. When cared for properly, these systems do a great job of filtering out pollutants like phosphorus, nitrogen, and bacteria. But when neglected or malfunctioning, they can contaminate nearby water sources, putting both the environment and public health at risk.
In this blog, we’ll explore why proper septic system maintenance matters, the challenges homeowners face, and how financial incentives like subsidies can encourage system replacement. We’ll also share new insights from research conducted by the Syracuse University Environmental Finance Center (SU-EFC) and the Maxwell X-Lab to understand how these incentives can support water quality goals.
What Happens When Septic Systems Fail?
Maintaining septic systems is key to protecting both public health and the environment. When septic systems fail, they can leak harmful nutrients and pathogens into local waters, causing problems like harmful algal blooms, oxygen depletion, and damage to aquatic life. The most common reasons for failure include improper waste disposal and lack of regular maintenance. In New York State, failing septic systems have contributed to water quality issues in places like Long Island and Lake George, showing just how important it is to keep these systems running smoothly.
But keeping these systems working well isn’t just an individual responsibility. It requires strong local planning and programs that tackle challenges like high costs, limited funding, low public awareness, and other gaps in onsite wastewater management. It’s clear that protecting our water resources will take a collective effort.
Can Messaging and Incentives Drive Action?
To better understand what motivates homeowners to replace or maintain their septic systems, the Syracuse University Environmental Finance Center (SU-EFC) teamed up with Syracuse University’s Maxwell X Lab, a research group that uses behavioral science to test what kinds of messages and strategies are most effective. Their approach uses randomized controlled trials (RCTs) to compare different messaging and policy options in a scientific way, helping organizations save time, money, and guesswork.
This collaboration builds on a 2022 study that examined how different ways of communicating risk influenced shoreline property owners’ willingness to replace or upgrade their systems. This initial study found that framing flood risk over a 30-year mortgage period instead of the typical 100-year floodplain helped homeowners better understand the immediate threats to their properties and structures—making them more likely to take action and replace failing septic systems.
Building on those findings, SU-EFC and Maxwell X Lab launched a second survey experiment in 2023 to see how homeowners with septic systems would respond to financial subsidies for system replacements. Participants were randomly assigned different subsidy amounts and asked how likely they were to replace their septic systems. The results from this study are discussed below.
The Big Impact of Subsidies on Septic System Replacement
The results showed strong support among property owners for a small fee-to-subsidy program to help offset the cost of septic system replacement. At baseline, about one-third of respondents said they were likely to replace their system within the next year. When offered the lowest subsidy amount of $5,000, that number jumped by nearly 40 percentage points (36% to 72%). You read that correctly, even the lowest subsidy level more than doubled the number of homeowners willing to take action within a year! Similar gains were seen across all subsidy levels, reinforcing just how powerful financial support can be in motivating system upgrades.
How Income and Awareness Affect Decisions
While wealthier households were more likely to replace their systems even without financial incentives, the addition of subsidies made a significant difference. Households with an income level below $50,000 were less likely initially to replace their septic tanks without a subsidy, with baseline replacement rates at 30%. However, when a subsidy was offered – even the lowest amount of $5,000 – the likelihood of homeowners replacing their septic systems more than doubled to 62.5%. After a subsidy amount was offered, less affluent homeowners in all treatment groups were substantially more likely to replace their system, similar to the results for higher income households. This shows that subsidy programs can encourage homeowners of all income levels to replace or upgrade their systems.
The results also show that education played a major role. Findings suggest that simply informing homeowners that they live near a drinking water source can increase their willingness to replace a failing system—even without a subsidy. This highlights the value of education and outreach efforts alongside financial incentives.
What This Means for Water Quality—in New York and Beyond
Keeping septic systems in good shape is essential for protecting public health and the environment, especially in places where sewer connections are not an option. This research shows that financial incentives like subsidies can play a big role in encouraging homeowners to take action to replace aging septic systems, and even small subsidy amounts offer a cost-effective way to prevent pollution and protect water quality.
These findings point to the need for ongoing efforts in education, awareness, and financial support programs to help homeowners take action. Want to dig deeper into research, see real-world examples, or learn about available state and federal funding? Check out SU-EFC’s new publication, Public Problem, Private Property: New Directions for Local Septic System Management in New York State, to explore additional insights relevant to New York State communities and beyond.
Learn more about the Syracuse University Environmental Finance Center (SU-EFC) or contact us today by visiting: efc.syr.edu