Even money can't buy water when there's not enough to go around.
  —Slate

Without it, my farm and my neighbors go thirsty.
  —David Masumoto

When people talk about water shortages they talk about "thirst". If you want to drink water, and there's none available, that's incredibly unpleasant, so the prospect of a water shortage leaving people thirsty is very alarming. But drinking water is less than 1% of total water use [1], and we're pretty good as setting things up so other uses are given up first.

Coming at this another way, let's look at the costs of desalination. We can turn sea water into fresh, generally by distillation or reverse osmosis, but it takes energy. For example, El Paso's desalination plant has an average production cost of $1.50 per 1000 gallons, mostly spent on energy. That's high enough that it's impractical for irrigation of the most water-intensive crops but still low enough that yearly drinking water costs are a matter of cents.

(Sometimes people will say a region doesn't have enough water to go around and so should limit construction and density. An American uses about 100 gallons a day of local water [2] which at desalination rates would be just 15¢/day. This is a water bill of $4.50/month, which is not enough money to even enter into the decision. People want to live in dry sunny regions, and the economics do work out.)

[1] Global freshwater consumption is around 10^15 gallons per year, or 150k gallons per person per year. Per day that's 390 gallons per person, though of course some people use less and some use much more. Most people need to drink less than a gallon a day.

[2] That is, water supplied by the municipality, for drinking, cooking, cleaning, etc. Water footprints, counting things like water used to grow food in other countries, are much larger. But shipping is cheap enough that if a person decides to live in a dry place instead of a wet one the only part of their footprint that matters much is the local portion.