To provide supplemental water and wastewater service, the San Francisco Public Utilities Commission (SFPUC), in the USA, is embracing decentralized water treatment systems. SFPUC launched a local programme for regulating on-site water use called the Nonpotable Water Program, which creates a streamlined process for new developments to collect, treat and reuse alternative water sources, including grey water and blackwater, from large-scale commercial and residential buildings in order to meet their non-potable needs. It establishes guidelines for developers interested in installing non-potable water systems in buildings. Subsequently, the SFPUC realigned governmental policies and created a new regulatory framework by collaborating with the San Francisco departments in charge of Building Inspection and Public Health. SFPUC allowed for micro-markets to emerge when two or more buildings share, buy or sell water without a public agency providing the service. The programme shifts the burden of operation, maintenance and water quality compliance to the private sector while the public sector maintains oversight to ensure the protection of public health and the public water system.