The most difficult aspect of achieving a net-zero water standard is treating and returning your blackwater back into the system. Blackwater treatment in itself is difficult, and requires an expensive membrane bioreactor (MBR). The organic matter must be separated out from the liquid and treated differently. The biosolids produced can be used as fertilizer for non-edible crops and the liquid can be treated and returned to the system.

Source: Achieving Water Independence In Buildings via International Living Building Institute
The key players in the system that produce blackwater are toilets, kitchen sinks/ garbage disposals, and dishwashers. Anything that contains organic matter contaminates the wastewater produced with bacteria, viruses, and pathogens. Good practices in the kitchen can limit the amount of blackwater to be treated by the system, but there will always be people eating and producing waste in the system, and these things require the presence of an MBR.
At this stage the water is not potable, but it is clean enough to be used for a variety of other things. Once treated, the water output from an MBR can be used to refill toilets for flushing, irrigation needs, washing machine water, and to supply fire hydrants with water.
