Submetering: Reducing Costs To a Trickle.
Water submetering is booming. New construction, water shortages, and rising water prices are driving this trend. Besides its environmental value, water submetering makes good business sense. Submetering started in Florida, a state with serious water shortages and a growing population. The movement then migrated north and is now prevalent in many states.
“With submetering, the property management company shifts the burden of water use to the tenants, with the exception of common areas,” says Diane Palmer, marketing director, Master Meter, Longview, Texas. Billing water and sewer costs directly helps encourage water conservation, reduces building operating expenses, and allocates costs more fairly.
Submetering also provides an effective way to pinpoint unseen water leakages at properties, says Randy Moss, CPM. He determined that by metering individual units, laundry rooms, pools, and so forth, he could compare actual water use with the total bill and determine if leaks existed. “Today, we find underground leaks in many of the older properties we submeter; often ones that have probably existed for years unnoticed,” he says.
Submetering companies cite figures that water consumption drops from 25 to 40 percent after residents start paying for water and sewer costs directly. Brian Stone, principal of Multifamily Utility Company Inc. in San Diego, CA, indicates that property management companies and/or owners usually see a payback within 10 months after installation, depending on local rates.
Ross estimates that on an average 200-unit property, with a water bill of $40 per unit, per month, NOI could be increased by $96,000 a year through the installation of a $50,000 water metering system. Of course, Moss notes Nashville does have one of the country’s highest water rates. Two hundred miles away in Memphis, savings would be only about $24,000 for the same period.
“The only way you can get people to conserve is to hit them in their pocketbooks,” says Ron Swell, in Alpharetta, Ga. “If management companies don’t utilize submeters, their water rates are going to go up regularly, and the rents can’t keep up.”
Moss agrees that residents become more conscious of water use when they pay the bill, but also finds that residents act more promptly in bringing plumbing problems to management’s attention. “When residents realize that a faulty toilet clapper can waste as much as 200 gallons of water an hour, they are less likely to ignore it,” he notes.