Your landlord doesn't have to offer you the same rate of rent offered to other tenants. You negotiate your rent independently. If you don't like the rate, at the end of the lease you can either negotiate a new rate or seek other premises. (If this is a month-to-month tenancy, you can negotiate a new rate starting after the next full rental period, or sooner if your landlord is willing. But your landlord can also say "no".)
I don't know what the city expects your landlord to do about the water problem if it originates on somebody else's land. It does sound like it is reaching a point where it is a potential health hazard, and your landlord really should take charge of getting it resolved.

