This paper aims to suggest ways of institutionally improving standards that must be applied when installing Water Reclamation/Reuse (WRR) system based on efficiency analysis. Currently, the standard for WRR system establishment requires that the system should treat more than 10% of used water in the building of over $60,000m^2$ in total area of all floors, but our research has found that it would be more effective to change the standard to $150-m^3-per-day$ reclaimed water or the total area of all floors of $30,000m^2$ ($50,000m^2$ in the case of an office building). In other words, what this paper suggests is not a one-size-fits-all standard based on the total area of all floors, but a reasonable and flexible standard that takes into account efficiency and a unit water usage according to a building's purpose. Furthermore, this paper recommends a new WRR standard that can be applied to large-scale land development for housinglots, like the New Town. The recommendation is based on the economic analysis that the WRR system will ensure efficiency only if the amount of reclaimed water is over 4,000 tons per day, which corresponds to 4 millions square meters of housinglots. Regarding the size of the established facility, this paper suggests changing the standard, which is now set at over 10% of water usage, to what is relative to the total amount of use of reclaimed water in order to ensure efficiency and promote use of reclaimed water. In addition, this paper proposes that governmental support should be offered not only to facility owners, who are recipients at present, but also to facility builders. By doing so, those who donate a facility to the government, central or local, after building it, can be provided with substantial aid. Therefore, the application of the institutional improvement suggested in this paper is expected to create environment-friendly living conditions and boost the quality of life by encouraging people to secure water resources efficiently in buildings, and in a wider range, in cities.