With the effects of climate change frequently making headlines, more and more consumers are turning to sustainable alternatives to the products and services they consume on a daily basis. Unsurprisingly, this has sparked demand for more sustainable housing experiences. After all, housing is something that nearly everyone consumes 24 hours a day, 7 days a week, 52 weeks a year.
Sustainable housing, however, doesn’t consist only of luxury amenities that are ‘nice to have’. Rather, sustainable housing amenities actually offer significant cost-savings to homeowners, tenants, and multifamily apartment managers alike.
Admittedly, there are upfront costs to investing in sustainable housing technology, but those costs are more than offset by the cost-savings those technologies offer down the line. After all, sustainable housing tech is designed to reduce energy and water consumption which, in turn, reduces utility costs on an ongoing basis — meaning an increasing return on that upfront investment over time.
What this means for multifamily operators is that they can increase the profitability of any multi-family property that they’re invested in simply by also investing in sustainable housing tech. Indeed, doing so will not only reduce operating costs and increase revenues, but also support occupancy goals by offering tenants the added value proposition of enjoying a more sustainable home lifestyle.
Energy Management
Energy costs are the most significant recurring costs for any residential property. After all, it’s not only a question of ‘keeping the lights on’, it’s also a question of keeping the property livable by powering all the appliances and amenities that residents rely on throughout their daily lives.
Unsurprisingly, then, energy consumption is one of the most immediate areas in which multifamily operators can reduce their carbon footprint and operating costs. And they way multifamily operators are reducing those costs and that footprint is through smart IoT-enabled tech and high-efficiency appliances.
Smart Thermostats
When the average consumer thinks about smart thermostats, they tend to think of, well, consumer-grade thermostats, such as though offered by Nest and Ecobee. However, not all smart thermostats are created equal, and the consumer-grade smart thermostats are more appropriate for private homeowners or single-dwelling units.
For a multi-family property, what’s required are commercial-grade smart thermostats. Specifically, multifamily operators require thermostats that can manage multiple units and provide the insight they need to manage and optimize their operational costs.
Indeed, multifamily managers have energy consumption needs that are unique from other REITs or from single-dwelling units. Not only is heating often included as an amenity, but the property’s common areas experience varying degrees of traffic and thermodynamic fluctuation.
Commercial-grade smart thermostats, however, integrate with occupancy sensors that monitor and automatically adjust to fluctuations in occupancy in both private units and common areas. The result is not only reduced energy costs, but a more seamless tenant experience.
Smart HVAC Technology
Smart thermostats and occupancy sensors, however, only represent the hardware side of the smart HVAC equation. There are also energy management software solutions that multifamily operators can leverage to get the most out of their investment in smart HVAC hardware, and further drive down their energy consumption and costs.
Verdant’s EI energy management system, for instance, uses sophisticated machine learning algorithms to track an array of HVAC variables, such as peak demand loads, historical thermodynamics, and local weather patterns, and continuously analyzes that data to optimize energy consumption throughout the year. The cost saving potential of smart energy management systems is so significant, in fact, that their adoption is already commonplace in the hotel industry, and has even been shown to increase the resale value of a commercial property.
The benefits of smart energy management systems, moreover, extend beyond optimizing energy consumption across units. In the case of Verdant’s EI smart energy management platform, for example, remote management features allow multifamily maintenance staff to continually monitor HVAC performance to ensure that HVAC hardware is running at peak efficiency. These features include HVAC diagnostic alerts whenever an HVAC system is not operating within required parameters, allowing them to identify, diagnose, and address malfunctions before they become more costly than necessary.
High Efficiency Water Heaters
The internal climate of units and common areas is not the only area in which multifamily operators need to regulate temperatures. Water heaters represent yet another significant energy expenditure. After all, from showers, to doing dishes, to running laundry appliances, heated water is an integral part of any multi-family resident experience. As commercial real estate brokerage NAI Global points out:
Heating water is a huge opportunity to help you conserve energy in your community. There are various strategies for operating water heaters more efficiently, including installing solar hot water systems, improving distribution systems, and increasing the thermal efficiency of the water heater. Not only will the more efficient options be attractive to your residents, you will see an increase in savings, as well.
In other words, by investing in high-efficiency water heater technology, multifamily operators can not only reduce their energy costs (should hot water be an amenity they provide tenants), but they can support occupancy goals by attracting tenants with the added-value promise that their property is one that is committed to more sustainable amenities.
Smart Lighting Systems
Of course, a big part of ‘keeping the lights on’ is, well, keeping a multi-family property lit for both tenant comfort and safety. And with that comes additional energy consumption and costs.
Fortunately, for multifamily operators, HVAC systems are not the only area in which smart energy tech can help reduce both operating costs and their carbon footprint. Specifically, smart lighting systems can help multifamily managers monitor and manage lighting energy consumption by adjusting to changes in tenant occupancy patterns in real time.
Similar to how smart HVAC systems leverage occupancy sensors and time-based schemes to reduce energy consumption, smart lighting technology can adjust lighting energy consumption according to a number of variables, such as occupancy and time of day. And, again, the result is a seamless, more comfortable experience for tenants.
Furthermore, it’s worth noting that some smart lighting systems can be integrated with smart energy management systems, such as Verdant’s EI. Verdant’s line of occupancy sensors, for instance, can interface with third party lighting systems to ensure that lighting adjusts to real-time occupancy patterns. This allows multifamily operators to monitor and optimize both lighting and HVAC energy consumption through a single interface, and reduce the carbon footprint of their multi-family property even further.
Energy Efficient Appliances
While HVAC and lighting are energy costs that multifamily operators can more directly control, there nonetheless remains areas of energy consumption that are more susceptible to tenant discretion. Specifically, appliance usage is something that operators cannot so closely control. After all, how much cooking or laundry a tenant undertakes is completely up to the discretion of the tenant (and their family).
This doesn’t, however, mean that multifamily operators can’t influence (and reduce) the amount of energy that is consumed by the appliances in units. By upgrading outdated appliances such as refrigerators, stoves, washers, driers, and dishwashers with more modern, energy efficient counterparts, multifamily operators can further reduce their carbon footprint and operating costs.
Sustainable Water Management
Considering that water is one of the essential building blocks of life, it comes as no surprise that water utility costs are an inescapable overhead for both tenants and multi-family apartment managers alike. Water as an overhead costs, however, does not necessarily have to be a fixed one. Indeed, there are a number of sustainable water management practices that can help multifamily operators reduce the water consumption of their properties, bringing utility costs down for both themselves and their tenants.
Water Fixtures
High efficiency faucets and shower heads are one of the most immediate ways that multifamily operators can curb their property’s water consumption. Moreover, high efficiency water fixtures are relatively low-cost, and have a typical payback period of 24 months or less. So updating water fixtures throughout your units can not only offer tenants a more sustainable resident experience, but actually generate ROI in as little as two years.
Low Flow Toilets
Of all the water fixtures and appliances in any residential dwelling, toilets use more than any other. Furthermore, toilets installed before the year 2000 can use more than three times the amount of water as their modern counterparts. As the Santa Cruz Water Department explains:
Although toilets all look pretty much alike, the amount of water released by flushing varies widely from one toilet to another. Generally speaking, the older the toilet, the more water it uses. Toilets built before 1982 use 5 to 7 gallons per flush. Now, toilets are designed to flush using only 1.6 gallons of water.
It’s also worth noting that “Low-flush toilets include single-flush models and dual-flush toilets, which typically use 1.6 USgpf for the full flush and 1.28 US for a reduced flush.” So by installing modern toilets through their units, multifamily apartment managers can reduce toilet water consumption by over 65%.
Predictive Water Line Maintenance
Just as smart HVAC systems can alert maintenance staff when hardware isn’t performing within expected parameters, predictive maintenance technology can help multifamily operators detect wasteful water consumption patterns and, and address the issues before costs rise further and/or equipment failure reaches a critical level.
For instance, low flow toilets might be ideal for curbing water consumption, but that doesn’t mean that they’re not susceptible to wear and tear, and leaky toilets can cost as much as $840/year. Factor in any additional costs that are potentially incurred from the collateral water damage that follows that water leak, and maintenance costs can quickly inflate if that leak goes unnoticed. By installing smart water meters and monitoring water lines with IoT-enabled sensors, however, multifamily operators can detect and prevent water waste and avoid inflated maintenance costs.
Sustainable Infrastructure & Amenities
Beyond energy management and water management, there are a number of other technologies that multifamily operators can invest in to create a more sustainable property infrastructure, reduce operating costs, and improve resident experience. Of course, while the cost-benefit of these technologies vary from market-to-market (according to regional climate and consumer preferences), the costs of investing in them continues to fall overtime, making them a more sound investment for multi-family property owners.
Solar Energy Panels & Batteries
While energy management technology is excellent for reducing energy consumption and costs, it has its limitations. Specifically, as much as it allows multifamily managers to optimize their energy consumption, it offers them no control or influence over the cost of the energy they do consume. Enter solar panels and power cells, which allow multifamily operators to source their own energy (at least partially), and even sell it back into the grid whenever they produce a surplus. As Solar Design Studio explains:
Some states, like California, now mandate solar installations on all new construction, including multi-family buildings. Building owners across the country are taking note and considering how solar can improve the lives of their tenants, serve as an additional selling point, and help recoup energy costs over the long term..
Of course, not all multi-family properties are in climates zones where the cost of the initial investment of solar technology is justified by the rate of return — i.e. it’s just not sunny enough. However, solar technology continues to improve, reducing setup costs and improving system performance. For instance, Tesla’s new V3 solar roof costs less than a new roof plus solar panels. Solar technology, then, can be a very worthwhile investment for multifamily operators in sunnier climes.
Electric Vehicle Charging Stations
Insofar as sustainability tech helps multi-family properties reduce costs and attract tenants, those same tenants invest in their own green technology, but require onsite infrastructure to support their investment. Specifically, hybrid and electric vehicles (EVs) continue to grow in popularity in many cities, states, and regions, and the availability of onsite charging stations is a huge draw for the tenants who drive them.
A Sustainable Investment in a Sustainable Future
The opportunity to invest in sustainable multi-family properties is more than an ethical one. It not only appeals to tenants and supports occupancy goals, but reduces operational costs as it reduces a property’s carbon footprint and water consumption.
Quite literally, it’s an investment in a greener future in more ways than one. By virtue of helping to combat climate change, it allows multifamily operators to realize new cost efficiencies, making both their business model and their service offering more sustainable.