Utility costs are expected to continue their steady rise over the next five years. If these costs are not effectively managed by your condominium, they can have a negative impact on your condominium’s value.
For many condominium buildings, utility costs are part of the common element fee – condo fees. Condominium purchasers are increasingly conscious of condo fees, and high fees can negatively impact on condo values. An independent study comparing two neighbouring buildings suggests that suites in the building with higher condo fees than its neighbours sold for $229 less per square foot. Conversely, a condominium that reduced its maintenance fees by 30 percent experienced sale price increases greater than neighbouring properties.
Utility cost can represent as much as 50 percent of a condominium’s common element costs. Any effective strategy to reduce those costs will benefit your pocket book and the future sale value of your home.
One simple way for many condominium corporations to reduce their energy consumption is sub-metering. Sub-metering can be implemented at no capital cost to the condominium corporation. Once implemented, in-suite electricity consumption is eliminated from common element fees and should lead to a condo fee reduction.
When individual households are billed based on their personal consumption, numerous studies have shown dramatic decreases in consumption levels – as much as 60 percent. Overall, a building’s energy consumption will experience a significant decrease from sub-metering which also benefits the environment.
There is also a fairness benefit. Lower energy users are no longer required to subsidize high energy users through their condo fees after sub-metering is implemented.
Sub-metering is one of many approaches condominium corporations can explore to lower utility consumption in their building and potentially reduce condo fees. Some approaches may require a capital investment by the corporation and offer a quick payback – such as lighting retrofits. Regularly reviewing utility efficiency measures remains an effective way to increase the value of one’s condo building and home.
Vince Brescia is President of Wyse Meter Solutions Inc. He can be reached at www.wysemeter.com or email@example.com.