Dense, newer housing needs a lot less water. If Los Angeles had densified rather than sprawling into the Inland Empire, etc. overall water usage would be far lower.
As it is, water usage in Los Angeles has had flat water usage for decades, even as its population grew by over a million people.
By downzoning so much, Los Angeles got the worst of all worlds: higher water usage, unaffordable housing, and unbelievably bad traffic because everybody has to drive such massive distances to the job centers.
Downzoning is an environmental disaster compared to the alternative, like allowing factories to dump their pollution into rivers type of disaster.