Abstract: A cost-benefit analysis of onsite graywater recycling in single-family and multifamily homes was conducted to evaluate the merits of graywater recycling in arid urban regions using the City of Los Angeles as a case study. Onsite graywater recycling reduces potable water demand by 27% and 38% in single family and multifamily homes, respectively. At participation of 10%, the City will be able to reduce water supply and treatment related energy by 43,000 MWh/year, potable water demand by 2% and wastewater treatment load by 3%. Amending local building codes to require new constructions to include plumbing to divert graywater for reuse will be important for lowering the cost and encouraging adoption of graywater recycling. Given the economic benefits to the City, establishing a rebate program for residential graywater recycling could provide a needed incentive for developing an effective residential graywater recycling program. A third-party ownership model could be a viable model for residential graywater recycling program that reduces the upfront system and installation cost barrier as well as relieves residential property owners the responsibility for system operation and maintenance. A City-wide graywater reuse program could also be developed to satisfy regulatory requirements by monitoring system operation and maintenance by certified contractors.