Robert A. Heinlein addressed this type of topic in many of his stories of space exploration and colonization. In space oxygen / breathing air and potable water are valuable and scarce commodities, and since they have to be manufactured through recycling – which costs fuel and energy resources – they are always “paid for” by the consumers. The ugly fact made plain in such novels is that in space if you can’t afford to pay for the air you breathe and the water you drink then you can’t be there, and you’ll have to go back Earthside… if you can live long enough to get there.
So one way to provide drinking water where it is needed is to value it more than it already is by charging its replacement cost – plus profit – for it. The benefit of Earth over space is that the planet does have ways to produce, channel and recapture water that might otherwise be ignored. Producers respond to market incentives. That’s why most of us can take relatively short trips to incredibly well-stocked supermarkets and buy food from around the planet: because food is not treated as a “free resource” and producers have arisen – all over the planet – to produce and transport and distribute exactly what we want, at the prices we’re willing to pay.
As you correctly note, water is one of the most freely available resources on the planet, and for that very reason has always been considered “free”. It’s not. We need to explicitly recognize its value by allowing producers to charge what the market will bear. In some places, that’s going to make living so costly that people will more naturally avoid those areas for more favorable market conditions – or it will spur producers to find a way to produce the necessary resource at better and better prices (as competition spurs them to find less and less expensive ways to produce and still make profits that attract them to the business in the first place), making places that are now only marginally able to carry human populations more capable – and richer all around.
At some times, that’s also going to mean that potable water is more valuable than at other times. Our metered water prices should reflect that fact. Prohibitions on car washing and lawn watering are useless; charging people the replacement cost for the water they choose to expend will drive home its value to all consumers.