The catch is that we owners and managers are not the primary consumers of the water we dispense at our properties, but our residents. The majority of an apartment community’s total water consumption is the combined consumption of the residents in their individual units.
Typically, management receives a bill for the water consumption of the entire community (including resident consumption) each month. Multifamily operators can only impact that which we control, namely common areas. Where, then, is the opportunity for multifamily operators to conserve water?
In concert with the federal government’s leadership via the National Energy Conservation Policy Act (signed into law in 1978) as stated in section 8252 “promoting the conservation and the efficient usage of energy and water…,” electricity providers began to individually meter electricity in individual apartment units making residents responsible for their consumption. The result, predictably, was an 18 to 30 percent drop in electricity usage.
Today, rarely do we find windows open in the summer or winter when consumers are responsible for their heating and cooling. The incentives and corresponding results are clearly defined and measurable.
The most basic economic principle also applies to water: when consumers pay for their measured consumption, they are “incentivized” to conserve simply because they are fiscally responsible for their usage.
In the late 1990s, due to several factors including a downturn in the economy and increases in sewer rates (frequently billed with water), multifamily owners were motivated to mitigate the uncontrolled variable expense of water. This resulted in multifamily operators beginning to recover their water/sewer expenses by “billing back” or “reselling” the water/sewer to residents. The subsequent result was that the numbers, again, demonstrated that consumption decreased after consumers were obligated to pay for their usage.
In more tightly regulated regions of the country where it became mandatory to install water submeters in each unit and to bill back the residents for their measured usage, less water was used. In regions that allowed for residents to be billed back for their water usage, not mandating that the resident usage be measured (submetered), EPA concluded the reduction of water usage was less noticeable.
Today, billing back residents for their water usage has become common among apartment managers, even spawning the emergence of resident utility billing companies and increasing focus on utility management. The practice, however, has not fully penetrated the industry and, even more telling, measured usage is the least common billing method among resident utility billing companies and property owners.
Experience demonstrates that residents who pay for their metered water usage consume less water; since their behavior has a direct impact on their bill, residents are more likely to conserve because it directly benefits them to do so. The measured results also provide evidence that residents who pay a water bill, but their usage is not metered or measured, consume more water because the bill they receive is not directly impacted by their actual usage; they are not negatively impacted by wasteful behavior.
Frankly, most of us do not need a myriad of studies or complicated research to inform us that being wasteful is foolish and expensive. The value of water is not in question. That is probably why there is no shortage of resources available to educate us on effective water conservation measures. Simply Google “water conservation” and you will find 116,000,000 results in 35 seconds; an actionable number of which even advocate solutions that can directly impact residents living in apartment communities.
EPA estimates that 70 percent of all household water consumption occurs indoors (this is probably higher in multifamily.) If the multifamily industry is serious about water conservation, we will advocate —dare I say, mandate—that our residents pay for their individually-measured water usage. Our fiscal solvency as multifamily operators depends on abating these costs.