How about making the price graduated. Each household has a low price up to a certain point (a reasonable amount for indoor use of the household) and after that it's market price.
Some households have more residents than others. I don't particularly want intrusive government monitoring of who lives where just for the sake of water allocations. No thanks.
I don’t know that any such tiered pricing needs to be down to the liter.
I think it would be perfectly reasonable to assume that agricultural water from individual farms dwarfs that of individual residences, so you just need to find the cutoff at which residential allowance stops applying.
Get an estimate of the maximum people/bedroom in the area, then judge each house based on that. I think the city already knows how many bedrooms each house has.
