Residential consumption is not the issue, subsidized water for agriculture in California is. Agricultural users paid as little$70 an acre-foot for water, which is less than a thousandth the residential rate.

Under the state’s ridiculously baroque system of senior water rights, just because someone was first to nail a notice to a tree by a river in the 19th Century, everybody else in the area has to cut their water consumption to zero before their allocation can be reduced. No state politician has been brave enough to fix this because reform would be tied down in litigation for decades, as in Mark Twain’s possibly apocryphal quote that “whisky is for drinking and water’s for fighting over.”

This broken system does not incentivize efficient drip irrigation, in many places they simply flood the fields with water, and you have absurdities like the despicable Saudis buying up land with senior rights and growing alfalfa, a low-value and water-intensive crop they export to Arabia to feed cows, which is basically laundering water exports.