CASE STUDY: The ROI of Water Management: Thousands of Dollars, Millions of Gallons - Resident First Focus

Above. A 152-unit property in Long Beach, Calif., Fountain View Apartments has saved more than $50,000 in water bills and conserved over 11 million gallons of water since its toilets were replaced with high-efficiency models and aerators were added to the building's faucets.

In the world of the developer, a multifamily property is an asset and an investment that must offer a quality lifestyle for residents. It’s been my job to reinvest in these properties, upgrade them, and retrofit them for efficiency and aesthetics. Yet, in all my years of doing this work, I’ve missed something that not only saves developers money, but does a lot of good, too: water.

Perhaps you’ve overlooked this essential resource at your properties too.

Getting a maximum return on investment is always my company’s goal, so when I discovered that water could be a positive part of the investment equation, I was all in—yet extremely skeptical. Sure, conserving water is important. Being a steward of natural resources is a social responsibility. But can water management really provide a financial benefit? Yes it can. I have the proof.

At MHE Real Estate, across more than half a dozen properties nationwide, we’ve saved millions of gallons of water—and tens of thousands of dollars—a year.

The Proof: Fountain View Apartments, Long Beach, Calif.Fountain View Apartments in Long Beach, Calif., offers a prime example of how MHE has reaped water-related savings.

We purchased the 152-unit property, built in 1986, in 2006 and recognized we’d need to retrofit all of the toilets and faucet aerators in the kitchens and bathrooms. Actually, we didn’t have to retrofit these fixtures and fittings, but I was approached by a group that claimed doing so would result in cost savings. Big savings. Water savings.

I was suspicious. Were they trying to sell me oceanfront property in Arizona? They said they could prove their claim. I said, “Go for it.” They shared the following insights:

  • Existing toilets in 30-year-old properties are water guzzlers, using more than three gallons per flush.
  • Today’s high-efficiency toilets, in contrast, use as little as 0.8 gallons per flush.
  • Aerators—those little screw-on filters or screens that attach to the end of a faucet—also reduce water consumption.
  • Modern toilets and aerators aren’t like those of yesteryear, when a flush seemed like a trickle. Water power and water efficiency work together in the new models.
  • Maintenance and repair of these toilets and aerators are virtually unnecessary. They rarely clog, and their hardware doesn’t break.

The bottom line? At Fountain View alone, we’ve saved more than $50,000 in water bills and conserved more than 11 million gallons of water.

Fountain View Apartments was built in 1986. If your properties were constructed before 1990 and haven't been retrofitted with new fixtures and fittings, you’re probably wasting money and water. 

Here’s what I’ve learned—and how you can save this much too.

Flush and find. Saving money starts by examining your properties. How old are the faucets, toilets, and showerheads? If they’re pre-1990, you’re probably wasting money and water. These old properties likely have huge flush rates, with toilets that could be 3 to 6 gallons per flush (gpf), compared with today’s standard 1.28 gpf and high-efficiency0.8 gpf. I know what you’re thinking: “Replacing toilets and faucets costs A LOT!” Not so much. Read on.

Do the math. Determine the type of toilets at all your properties. If the buildings were constructed before the mid-1990s, factor each flush to be 3 gallons, and multiply the number of toilets by 3 gpf. Then, factor in 6 flushes per person per day. How much water—and money—are you, well, flushing away?

Consult a water-conservation specialist. My experience started with a knock on my door from a services company that specializes in helping commercial owner–operators identify ways to conserve money and water. I didn’t even know such specialists existed. They assessed our properties and even helped us identify opportunities with the city to obtain rebates based on how much water we saved.

Use conservation-savvy plumbing contractors. There’s a growing number of local and national plumbing contractors focused on conservation and “green” initiatives. The two most prominent national groups are Green Plumbers USA and Sustain-Ability Solutions. Green Plumbers was formed by the Master Plumbers and Mechanical Services Association in Australia in 2000 and provides an online directory of local plumbers. SAS offers turnkey plumbing solutions to property owners nationwide.

Engage your city. Municipalities often receive federal and state funds allocated to businesses that conserve water. In some locales, cities have actually paid 100 percent of the cost for new toilets, especially for properties built prior to the mid-1990s. We were quite excited with a rebate in Seattle that paid $200 per toilet. You may find resources for such information through your city or water department websites.

Google it. Out of curiosity, I went online and looked up “water conservation rebates for developers.” I got 850,000-plus results. Yeah. It appears most rebates are offered by cities or regional water boards. Look them up in your specific locale.

For those of us who invest, own, and operate multifamily properties, we often find ourselves having to straddle the fence between budget constraints, return on investment, on-site operations, maintenance, and upgrades. The good news: Plumbing doesn’t have to be a money drain. Used well and efficiently, the right fixtures and fittings can save thousands of dollars and a precious natural resource.

Savings and stewardship. I’ve found both.

Credit: MFE