Through an innovative approach to resident utility billing that creates an income stream for owners while empowering residents to conserve energy, one medium-sized apartment owner is realizing greater return on investment.
Ryan Burton, Sustainability Coordinator at Regency Management Service, which owns 15 communities, is experimenting with restructuring his company’s lease to include a calculated utility cap allowance per apartment home based on a documented history of peak and average utility usage from all meters on the community.
For example, under Burton’s proposal, if the owner determines the cap to be $125 per unit, per month, and the utility bills exceed that figure, the residents pay the difference. If the expense is below $125, the difference is invested into an account that the owner uses for various capital expenditures that incorporate green measures or to help pay off current green projects. If the account is structured properly, Burton says, the separate account may offer tax advantages because it is being used for capital improvements.
Burton says the process should begin with an energy audit for the apartment building to determine the green projects that will create the most savings and present the best return on investment.
Simplifying and streamlining the resident’s utility billing process is one of the main selling points of the green lease, Burton says. Residents won’t have to worry about third-party contracts, additional deposits or unpredictable bills. Emphasizing that the billing structure promotes green living and investments in efficiency also can be used in marketing to help show residents and prospective residents the owners’ support of green practices.
Burton recommends rolling out the green lease with new residents, rather than implementing it retroactively, to minimize objections.
He also says that when planning green initiatives, owners should include projects that are tangible to the residents. For example, if the manager is replacing appliances with Energy Star-qualified products, he or she should choose the stainless steel option instead of the basic version. Owners also should consider green projects that affect quality of life, such as using low-VOC paint, flooring or HVAC systems that improve indoor air quality.