Saving money and water in apartment communities is the passion of entrepreneur Richard Lamondin Jr., who has founded a company to take on the challenge of both saving water and helping apartment owners, landlords and property managers make their complexes more green and eco-friendly.
By John Triplett
Earth Day in April helped focus attention on ways to save money and water in apartment communities.
In an interview with Apartment Headlines, one entrepreneur, who is in the middle of a large 10-property project in Dallas to help the Dallas-Fort Worth area with water conservation, talked about his passion and his company. The project is expected to save multifamily properties there an estimated 108 million gallons of water this year alone. The company is expecting to save two billion gallons of water over time.
How Leaking Toilets are Key to Saving Money and Water
“My brother and I grew up with a father who is a real estate developer, so we basically grew up on construction sites,” said Richard Lamondin Jr., CEO of Ecosystems. “But we are also environmentalists. We began researching the water situation here in the U.S. and found that 20 percent of all toilets in the U.S. right now are leaking as much as 200 gallons of water a day.
“I can go on with the numbers, but homes waste one trillion gallons of water every year. So while we’re trying to find solutions on the grand scale, a lot of times what’s being overlooked is the basic building block of water usage in apartment communities, which is the bathroom,” he said.
Seattle and Atlanta Two of Highest Cost Cities
Atlanta, Georgia and Seattle, Washington have some of the highest water rates in the country at $325.52 and $309.72 per month for a family of four, respectively, according to a Michigan State University study. “These rates are based on 100 gallons (378.54 liters) of water per person per day including water, sewer and storm water for 5/8 inch (15.875 mm) meters. It is likely these rates will rise as the cost of providing water increases.”
The Michigan State University study, called “Affordable Water In the U.S. – A Burgeoning Crisis,” says “If water rates continue rising at projected amounts, the number of U.S. households unable to afford water could triple in five years, to nearly 36 percent.”
So Lamondin said it’s actually a growing problem not just for apartment owners but “pretty much anyone paying their water bill right now because of our aging infrastructure and certain stresses on the water supply.”
“I think part of the reason why we’ve actually seen a lot more interest in water conservation over the last few years is the fact that it’s hitting people’s pockets in a meaningful way,” he said.
Apartment Bathrooms are the Initial Ffocus
“We audit a property’s water usage,” Lamondin said. The audit is based upon the building structure plus any potential local incentives and other contributing factors. Then they create a program based upon that property.
“Most of the time what that includes is full replacements of all water-using fixtures in the bathrooms and kitchens. So we’ll change out toilets, shower heads, sinks, or even just the sink aerators ,” Lamondin said.
They also inspect the apartment community looking for:
- Any sinks, tubs, valves and supply lines that may have an existing leak
- Any ground leaks throughout the property
”It’s very common to come across toilets that use three-and-a-half gallons per flush. Now those toilets were manufactured usually in the 70’s and 80’s and haven’t been changed since.”
And when the company is done, “We’re really saving anywhere from about 30 percent to as much as 68 percent off of water bills,” Lamondin said.
Installing New Toilets Without Disrupting Tenants is Key
“These days, you’re getting toilets that are flushing 0.8 to one gallon per flush with more power than those big guzzling fixtures. It is basically a simple math problem.
“If you take a three-and-a-half gallon per flush toilet and cut 75% off its water use, it’s going to save you money. The same thing in the shower heads. A typical shower head uses two-and-a-half gallons per minute. We typically put in one-and-a-half gallon per minute shower heads, and that saves 40 percent off their shower usage right there.
“We try to make conservation unavoidable. We do not seek to disrupt any person’s daily routine, that’s really embedded in our philosophy,” Lamondin said.
“Sometimes we find some fun things when we lift up the toilets. And, that is another added value of the program.
“For instance, we may lift up the fixture and find there’s a rotted floor under there. Or, there’s some cracked item or a leaky valve that may in the future cause a catastrophic leak. So we go in and harden those properties against those leaks in a multi-floor building.
“We’re in and out usually within half an hour or 45 minutes, very quickly. We try to disrupt residents as little as possible. I would say that a lot of times the management, especially property managers on site, really appreciate the efforts we go through to handle that. We have their maintenance teams opening doors for us. We have a member of the staff with us at all times so residents see a friendly face. We really make an effort to make this a positive project,” Lamondin said.
Big Projects Around the Country
Lamondin said his company works with another company called BH Management Services, LLC which has expanded to a nation-wide project.
“We’re doing more than 14,000 bathrooms with them over the next year nationwide. In Arizona, we did 4,400 bathrooms in the fourth quarter of last year. We’re still working on getting the savings numbers off of that, but they’re going to be saving hundreds of millions of gallons of fresh water. I have no doubt about that,” he said.
Denver Project Provided Return on Investment in Nine Months
“Last year we did a project in Denver for one property.” Lamondin said. “It used to be called the Breakers and now it’s called Tava Waters,” and is managed by BH Management Services.
“It was about 2,500 bathrooms in one shot. We did it in three months. Denver Water didn’t think we could do it in five months. They gave our clients the largest rebate in Colorado history. it was about $376,000 on that project. Their return on investment (ROI) was about nine months.
“This was the largest toilet rebate we’ve ever done,” Jeff Tejral, Denver Water conservation manager, said in the great toilet payback on the Denver Water site. “It was an impressive project, and they’re saving a lot of water by using some of the most efficient toilets available.” Denver Water estimates that Tava Waters will save around 33 million gallons of water each year by making the changes. Before the changes, Tava Waters residents were using about 51 gallons per person, per day; after the renovations, each person is using around 33 gallons per day.
The Practical Side of Working with One Vendor
Mike Watkins, Director of Construction, West, for BH Management Services, said, “In the very beginning of an acquisition or refinance, we’re working with an engineer on a green study report to identify the different items and areas where there could be efficiencies, electrical or water. A lot of our projects to date have been focused around water savings.
“EcoSystems really stood out to me,” Watkins said. “I was involved in the Denver project where we had a short timeframe of less than 90 days to do about 2,500 bathrooms. When I got involved with the program, and looked at how to roll this out nationally, we asked ‘Does it make sense to have multiple different vendors throughout the country doing it, or does it make sense to work with one vendor who has it down?’
“Based on their response and how they performed on the project in Denver, it was a no-brainer to work with them on the project nationwide That way, we have similar crews going on site and into tenant’s units, rather than having multiple different vendors. This has allowed EcoSystems to become more efficient working with our projects and our managers to continue to deliver a high level of customer service to our residents. ,” Watkins said.
Freddie Mac Green Up Program for Borrowers
“BH Management has the Denver property but also 269 properties and just over 80,000 units under ownership and management,” said Kate Miller, Senior Asset Manager for BH Management Services.
“We started participating in the Freddie Mac Green Up program when it was initiated in early 2017. The benefit here is Freddie Mac recognized that in most multifamily apartment communities, the tenants paid their own utilities such as electric, gas, water, etc.. Previously, multi-family investors didn’t have a strong motivation to focus on green improvements.
However, Miller said, “We are always cognizant of our footprint. We want to save resources, both utility-wise and financially, and we’re always trying to do the right thing. We’ve taken full advantage of the Freddie Mac loans since they were introduced, which provide for funds to be rolled into the loan at favorable loan rates to implement green initiatives within the individual units.
“It’s a program that we’re really excited about,” she said. Of their 269 properties “we’ve got 55 properties to date that are participating in the Green Up initiative. It’s really something that we’re proud of. It takes a lot of work. It takes a lot of logistics. But it’s fun to see these projects wrap up. EcoSystems been very helpful to us in tracking, so going forward we’ll be able to see the benefits of the investments being made in these properties,” Miller said.
City Rebates Make a Difference
“Municipalities often offer rebates to encourage owners to participate in energy saving practices ,” Watkins said. “Denver had a phenomenal rebate. It basically paid for more than half of the project, which was fantastic.”
“In Phoenix, we’ve taken advantage of smaller rebates; every market and county has their own standard for what is offered. But as far as all the cities, between Phoenix and Tempe, everything was fine. I can’t think of anything that stood out to me, where it didn’t go smoothly,” Watkins said.
Return on Investment for Apartment Owners
Apartment owners can finance much of the cost for the water saving initiatives.
“Right now, there’s a fantastic financing opportunity through Fannie Mae and Freddie Mac for any owners purchasing or refinancing,” Lamondin said.
The programs go by different names, but “they all boil down to basically green loan programs.”
“And for owners, that can save 25 percent on their utility costs. They’re able to receive significant reductions of up to 30 basis points on the loan in basis points, basis point discount, sa well as receive back much of the cost of the project that they implement through rebates.” Whose quote is this?
“So, for example, that project in Denver was one of the early ones for that program, and they received, I don’t know officially how much, but I think about 30 basis points off of their loan in addition to the water savings. We’ve seen a lot of growth and a lot of large owners taking advantage of this program lately,” Lamondin said.
“I’d say about 18 months is our average ROI. We’ve had as quickly as three. When we do our due diligence, we ask the owner what their tolerance is in terms of an ROI. And if it goes above that – it’s the least favorite part of my job – but we recommend not performing projects if something doesn’t meet roughly about a 24- to 36-month ROI.
“We really understand the importance from a business perspective in doing this work. But I would say right now anything built before 2000 has significant potential from a conservation standpoint. And there’s about 20 million or so bathrooms in the U.S. that meet that criteria just in the multifamily industry,” he said.
Owners Saving 35 Percent to 68 Percent off Bills
“It really all depends in terms of consumption, the amount of gallons saved, but we’re pretty steady on that savings number,” Lamondin said. “A lot of times the way bills are structured – and this is something that we teach our partners – is a large determining factor in how much savings in dollars are achieved.
“For example, you have things on your bill like a storm water charge that no one can affect. However, you also have consumption charges based on the number of gallons. That’s where we really hone in. And a lot of times people don’t understand how much of the bill they can actually affect. And so we do a lot of educating on understanding both opportunity and liability from a utility standpoint,” he said.
Millennials like Apartments to Focus on Green Initiatives
So for example, for BH Management, “We did a projection that they’re going to save about 400 million gallons of fresh water annually and just from the projects we’re going to do for them within a calendar year,” Lamondin said. “Those are significant numbers that continue to build on each other.
“I’m 30. A lot of times people in my generation do care that the place they live is doing their part to keep and stay green,” Lamondin said.