New Technology Advances Utility Management
By Nushin Huq
12 min read
Energy Benchmarking for Properties
In affordable housing, where every dollar counts, utility expenditures can be one of the highest-cost items. Technology advancements to help properties reduce unnecessary energy and water consumption can significantly reduce those costs, decrease a property’s carbon footprint and help with energy benchmarking.
Current utility management technology is centered around providing property owners and managers information on usage, such as shadow metering that can provide unit-specific data and leak detection. The more precise the information provided, such as exactly when and where water is being used on a property, the quicker the problems can be addressed, and costs dramatically reduced. Money spent on items like water and energy usage due to leaks or faulty equipment is like throwing money down the drain. New technology is coming onto the market to collect and provide data to help with utility management.
Technology and Property Management
At Kittle Property Group, technology weaves through its entire water and sewage management process – reading the data from hardware, transferring the data, collecting the data and understanding the data. The company uses technology from ION Water to monitor water usage in individual units, as well as Yardi software integration to manage service requests.
“We use tech with our property management software to bill usage out to the residents,” says Robyn Eaton, Kittle senior vice president of portfolio management & analysis. “We also use technology in creating service requests when ION tells us there’s a leak at a property.”
Service requests are created in Yardi software, which lets property team members know there is a leak to repair, and ION mapping tells them where the leak is so the site team can quickly resolve the leak, Eaton says.
With stable and new assets in the pipeline, Kittle currently has about 16,000 units, with about 70 percent of its portfolio being affordable housing.
“Those deals are built really tight from a financial standpoint,” Eaton says. “Every penny counts to make sure that we’re covering debt service and maintaining the assets well so that the resident experience at the site community is positive.”
A 2019 Kittle analysis found that assets that were sub-metered were doing notably better with their net operating income targets. The company decided to run some tests by adding meters to older sites.
Kittle connected with ION and was impressed by the company’s technology and ability to provide robust up-to-the-minute information so that leaks were reported as soon as they were detected.
After adding the hardware to 65 older properties, Kittle immediately saw savings due to lower consumption, a direct result of catching leaks. Additionally, consumption habits generally change when residents become directly responsible for their water expenses, we see reduced consumption and a higher likelihood of residents reporting leaks, Eaton says.
In 2020, Kittle decided to commit to ION and spent much of the lockdown adding ION meters to the rest of their properties, 70 properties total and most of its 15,000 units.
“Today, the affordable housing industry as a whole is wasting over 200 billion gallons of water every year, and that rolls up to an expense in excess of $3 billion a year in non-necessary water expenses,” Orlando Valdes, vice-president of ION Water, says.
Monitoring Around the Clock
In affordable housing, keeping operating expenses low is vital because of the dynamics of the industry, Valdes says. The Louisville-based company focuses on water optimization and conservation in the affordable housing industry.
ION installs sensors at the unit level to track that unit’s consumption of water in real time around the clock. When there is a water event anomaly, ION diagnoses the issue and generates a service request to be addressed by the site team. This enables the property to mitigate the water loss and associated costs when it starts as opposed to the leak continuing for days, months or years. As a result, customers can reduce their consumption by as much as 70 percent, Valdes says. Most properties have a single point of entry for water with a shutoff valve in every unit and in this scenario, one sensor is installed after that shutoff valve, Valdes says. The self-contained system tracks every time there’s water movement through that line from very slow and subtle movements to a catastrophic leak.
For example, every time a toilet is flushed, the amount of water used is recorded. This allows properties to track normal consumption and detect any anomalies. The sensors can detect leaks and where they originate from – a leaking toilet for example. A work order is automatically created, and staff will know exactly which unit has a toilet leak that needs to be fixed.
While it may seem dramatic to equate leak repairs to a 70 percent reduction in water consumption, Valdes says even one leaking toilet can leak over 100,000 gallons of water in a month. Valdes shares an example of a newly constructed unit, which does not have staff on-site currently. An ION report shows the three-bedroom unit uses 2,657 gallons in one day, indicating a leak.
“Our achievable target for this property is 45 gallons per day per bedroom, 135 gallons total,” Valdes says. “So instead of using 135 gallons yesterday, it used 2,657 gallons. Over 2,000 of those were leaked gallons. Because water usage is monitored around the clock, the system can catch leaks that are intermittent.
Leak detection technology is also good for overall asset preservation, e.g., where a pinhole leak in a water meter line or a dishwasher line causes a continuous slow leak, Eaton says.
“That might be hard to find, but if you don’t find it, it means damage to the building and the sheetrock and mold and mildew occurring,” Eaton says. “Those small leaks might not add up to a catastrophic water bill, but it adds up to damage to the property for the real estate if you don’t catch it.”
Sometimes, increased consumption is a result of a change in tenant behavior. Kittle’s Eaton gives an example of a property where the report showed increased water usage at night. After investigation, it turns out the tenants were running the faucet at night to use as white noise.
The ability to have unit-specific water information has helped dramatically decrease water consumption. The average affordable property uses over 100 gallons of water per bedroom per day. Kittle averages 42 gallons per bedroom per day across 9,000 units, Valdes says.
Linking Hardware and Software
While ION has both hardware and software, property management software companies are also providing services to link utility management hardware with their property management software. Kittle uses ION’s products with Yardi’s software, Eaton says.
Yardi software manages all of a development’s operations from attracting future residents, onboarding and managing the residents throughout the life cycle to portals for both residents and property management.
Founded about 40 years ago, initial Yardi software was developed for the Apple computer, says Christopher Voss, Yardi’s vice president of affordable housing. Over the years, it has evolved, moving to desktop applications in the 1990s, transitioning to web-based software in the early 2000s, to present-day mobile-enabled technology where all the software can work from desktop to smartphone, and in many cases, without having to download or manage extra apps, Voss says. The company also partners with several hardware and smart device manufacturers as the software platform.
“They’re reducing their consumption because our software creates an awareness of what they’re doing in terms of how they’re using energy and where they’re using energy,” Voss says. “They can see, as an example, that, ‘Oh my goodness, the apartment that’s vacant suddenly has a spike in energy usage, what is this about?’”
Clients can leverage the software to read dashboards and get notifications on their phones, as well as alerts that can point them where they need to go. Those notifications are tied directly to Yardi’s maintenance applications. Property maintenance can get both an alert and a work order on their phone that the hardware has detected a leak in a specific unit.
“What you’ve done is eliminate the need to have somebody stumble upon a puddle,” Voss says, “and have that puddle turn into a physical work order that then must be assigned to a maintenance person who then needs to evaluate the situation before anyone actually starts to fix the problem. With our software, a work order is created based on electronic monitoring and sent directly to the right maintenance tech who has all the information they need to fix and prevent that puddle from turning into a flood. That’s huge.”
The financial impact of having meters in place, managing consumption and billing resident usage equates to a portfolio’s net operating income boost of $4.7 million annually, Eaton says.
Going forward, Kittle will continue to refine how it views water and sewer consumption, Eaton says.
“It is by far one of the largest items of waste we believe,” Eaton says. “Not only is it the water and sewer, but it’s also the carbon footprint that it impacts to produce clean water and manage sewer, the infrastructures.”
Eaton says Kittle is also looking into better technology through benchmark reporting, possibly shadow meters for electricity.
Energy Management
Energy management is an area where the industry is only starting to scratch the surface, says Allen Feliz, vice president of U.S. affordable housing for MRI Software. Founded in 1971, MRI Software is a global real estate technology provider that employs an open and connected approach to software, together with an extensive partner ecosystem, offering a comprehensive view into property management, accounting and strategic planning. MRI provides a variety of property management, compliance monitoring, voucher management and asset management products and services for the tax credit industry and other types of subsidized housing providers throughout the globe.
“Energy management is an area where tech providers are underutilized throughout the industry,” Feliz says. “Despite the obvious benefits and trends in the larger real estate world, many affordable housing providers today don’t feel well-positioned to leverage this technology.”
MRI’s energy management software, eSight, is currently exclusively used by its commercial clients. MRI’s affordable housing clients tend to be smaller developments, such as garden-style apartments.
“We’re thinking a lot about how we can bring our energy management software to some of the larger multifamily affordable housing properties, particularly, projects operated by larger operators in the major metro areas,” Feliz says.
While one barrier is technical, getting energy management software to integrate with existing software so everything “talks” to each other, the other barrier is the availability of good data. This means getting utility information for each unit from jurisdictions or utilities, which can be extremely cumbersome, even with “green contracts” signed by renters giving utilities permission to share their data with properties or installing shadow meters, which might be costly.
“With more information-sharing incentives or requirements, the industry will experience greater progress in energy conservation, but overall, we’re witnessing a positive trend,” Feliz says. “Five years from now, ten years from now, I expect to see a completely different landscape with more and improved data and dramatically increased adoption of utility management technology.”
Yardi does provide products for its clients to help with their energy management. Yardi Energy Solutions is centered around helping clients pay utility bills, as well as providing clients with a central platform for data pulled from third-party hardware.
Yardi’s utility billing service not only pays customer utility bills, reducing late payment fees, but it can also pull data from those bills and create reports for clients on weather-normalized energy usage, Joe Consolo, an energy-focused industry principal at Yardi, says.
Yardi also exchanges that data with ENERGY STAR and helps clients with energy audits, all from information from client utility bills, Consolo says.
Yardi’s software is hardware agnostic and able to bring in data from dozens of other hardware companies. If it’s a hardware company that Yardi hasn’t worked with before, they will make the connections, Consolo says. In many cases, clients are leveraging technology that is typically used for billing back residents, such as shadow meters for a utility meter, to monitor energy usage in their buildings. One service is called Meter Insights, which is real-time metering, Consolo says.
When clients turn the system on, they set a baseline, Consolo says. It shows them how the building load, the energy used, occurs throughout the 24-hour period. Clients focus on making reductions from there.
“When we turn this on, people always see what their load profile is, and they go, ‘Wow, I didn’t know I was using so much energy between midnight and 6:00 a.m.!’,” Consolo says. “‘People are asleep, why am I using so much?’ They come to find out they might have some systems that are running when they don’t really need them running.”
The visibility through the technology solution enables them to make those adjustments, and clients see an immediate drop in energy usage.
Other products can even take clients beyond that to help them reduce energy usage by monitoring equipment. Yardi’s most advanced product deals with building optimization. Clients set a temperature and the software minimizes energy usage by controlling the building systems to minimize energy usage and maintain tenant comfort.
“With the use of all these things, we are easily seeing reductions of 20 percent with energy usage,” Consolo says. “The technology is in some cases providing a system to flow information to different people. In some cases, it is basically getting the data to report and visualize it. In the most extreme example, it’s controlling things.”
