Rain barrels and cisterns are low-cost water conservation devices that can be used to reduce runoff volume and, for smaller storm events, delay and reduce the peak runoff flow rates.  By storing and diverting runoff from impervious areas such as roofs, these devices reduce the undesirable impacts of runoff  that would otherwise flow swiftly into receiving waters and contribute to flooding and erosion problems. 

Typical rain barrel set-up
for a residential property.
(Source: District of Columbia Water & Sewer Authority)

1500 gallon cistern fed from two gable downspouts.
(Source: Experiments in Sustainable Urban Living)

Although most commonly used as a secondary source of water for gardening in residential areas, larger sized cisterns can be adapted for use to supplement potable water systems.  Many municipalities are promoting the use of cisterns for potable water use as well as for commercial and industrial applications.  Both rain barrels and cisterns can provide a source of chemically untreated 'soft water' for gardens and compost, free of most sediment and dissolved salts.  Because residential irrigation can account for up to 40% of domestic water consumption, water conservation measures such as rain barrels can be used to reduce the demand on the municipal water system, especially during the hot summer months.¹  The following table exhibits some of the site considerations of rain barrels and cisterns.

Site Considerations of Rain Barrels and Cisterns

(Source: Texas Guide to Rainwater Harvesting)
 

The use of rain barrels in urban and suburban areas, along with downspout disconnection, is being encouraged in a number of jurisdictions across North America.  In the City of Toronto, Canada a city-wide Rain Barrel Program was initiated in 1996 in which the residents have access to free downspout disconnection by a City contractor.² City residents, while not offered any direct financial incentives, are told of the economic and environmental advantages rain barrels and downspout disconnection will have for them, such as helping to keep the beaches of Lake Ontario clean, as well as:

• Saving them tax dollars by reducing or delaying the need to expand or upgrade sewage treatment facilities.
• Helping to reduce the severity of basement flooding caused by sewer back-up.
• Saving money on their water bill by providing free rainwater for lawn and garden use.

References

¹ The Texas Water Development Board-Rainwater Harvesting Web Page,
http://www.twdb.state.tx.us/iwt/Rainwater.asp 

² Downspout Disconnection in Toronto,
http://www.toronto.ca/water/protecting_quality/downspout.htm