There are social, economic and environmental reasons for shifting towards a more localized, community-scale system of water and waste management in our cities. This paper outlines some of these and provides an historical context as to how we have reached the need for this change. A case study illustrates how a localized system can be better on all three parameters. It is suggested that the best opportunity for achieving localized systems is to utilize the planning process with its links to community, regulatory powers for environmental management and metropolitan scale strategic processes.