If water is a human right that doesn't need to be paid for, then housing where taxes aren't paid for get’s confiscated by government.
Either way you slice it, someone will need to pay the operating and bond repayment costs of the water/wastewater system. The systems officers (or elected officials) have bond covenants that they have to live up to and probably there are also ratemaking regulatory requirements against having other classes of customers pay the bills of those that can't afford to pay.
I don't see a simple solution.
foreclose on a $100 home?
The city of Detroit probably holds title to 10,000 abandon houses