Most people in LA-city and the myriad of others don't pay for their water, their landlord does, and by law, it can only be added to rent (updating once a year at the earliest). This was originally a measure to help families out in dire times of drought to begin with, and is going to be used as such again here. The rent is supposed to reflect the usage of water included, much like garbage or power surcharges negotiated in the lease or rental contract. Additionally, most place will not update the rent yearly as is.
It is then obvious that since no-one in SoCal is incentivized to save water by the market on a timely basis, this scheme to have people pay more as they use is not a good way to keep thirst down. If you listen to radio/TV you see a lot of ads trying to get people to use less voluntarily. This is because it is very difficult for people to even know how much water they are using in the first place.