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In many urban settings around the world the severity of water scarcity has induced changes in household behavior, leading to reduction in the volume of water demanded. One of the most widely used strategies is the adoption of water-saving equipment that collects, stores and eventually treats wastewater from various sources within the household. This paper investigates the factors that drive adoption of water-saving equipment in Cape Town, South Africa, following the catastrophic "Day Zero" water crisis in 2018. First, the paper develops a disaggregated technology diffusion model. Second, we make use of choice experiments to determine the attribute levels and socioeconomic characteristics that influence adoption of water-saving equipment in urban communities in South Africa. Data collected from a sample of 465 representative households in Cape Town are used in a choice modelling framework. Latent class analysis (LCA) is compared with both multinomial logit and conditional logit models to estimate marginal willingness to pay (MWTP) for adoption of water-saving equipment. The LCA identified three household classes with distinct preferences, suggesting divergence in adoption of water-saving equipment. [ABSTRACT FROM AUTHOR]