Yesterday we had two circumstances where the community water valves had to be turned off.  One was on the Washington Blvd side, the other on the Lee Hwy side.  One was more planned, the other really was an emergency.

This is as good of an occasion as any to talk about water consumption in our community, specifically the fact that our homes are not individually metered.  Our community has only two meters, one for the Washington Blvd side, the other for Lee Highway.  The developers probably did this because it was cheaper and easier for them. 

People have from time to time suggested that we get individual meters installed.  Going down this road would first require a change in our declaration and by-laws, as water expenses are in the pool of undivided common interest costs.   Removing water from our pooled costs, or even scaling our dues by number of occupants would be a breach of our covenants, conditions and restrictions.

But let’s say we can solve that problem by going through the amendment process.  How would the numbers work out?  On average our community of 54 homes uses 10,400 gallons per day.  Many sources indicate that individuals use on average 100 gallons per day.  Crunching those numbers we find that on average there are 1.9 persons per unit.  

Given that our water bill is ~$920 per unit per year, or $461 per person per year, people who live alone are arguably paying more than an equitable share, and occupants with more than 2 occupants pay less than their equitable share. 

But to “correct” this situation would require a many-thousand-dollar capital project.  There would probably be multiple excavations to install metered manifolds and piping reconfigurations.  We can reasonably estimate the cost per unit would be at least $3K per unit, or $162K total.  To amortize that cost over 10 years at a 5% interest rate would cost the community $1,720 per month, or $21K per year, $381 per owner per year.  

(Update: We had the occasion to discuss this project with a contractor that actually does this kind of work, and a better estimate is probably closer to $7,500 per unit.)

The latter number assumes that the capital cost would be shared equally amongst all owners.  But following the logic for doing this in the first place, the capital cost should arguably be born by single-occupant owners only.  In Laurel Mews there are 7 units with only one occupant.  For 10 years their yearly living costs would include an additional $2,600.  And while they would be saving on water during this time, it would be another 7 years before their water bill savings would pay off.

But going back to a model where all owners share equally in the capital cost,  for 10 years single occupant owners would save $461 per year ($4,610 total).  But they would have to pay $318 per year ($3,180) for the capital cost, thus save only save $143 per year for the 10 year period.   Owners with 2 occupants on the other hand would be asked to pay $3,180 for a project for which they really would receive no economic benefit.  Owners with 3 and 4 occupants would not only see their water bills go up, they would have to share in the capital cost, thus would find their living cost go up $779 and $1240 per year, respectively.

Granted, after the capital costs are retired, single occupant owners would save several hundred dollars per year in perpetuity.  But two-occupant units would never recover their share of the capital costs.   Three and four occupant units would see their costs go up more than what the single occupant owners would save.  This is why arguably only the single occupant owners should pay the $162K capital cost. 

Surely there are better ways for single occupant units to save $143 per year that does not involve doing so at the untoward expense of two-occupant owners, or with something better than a 17 year horizon.  If we addressed this at all, the much easier thing to do is just scale the dues to number of occupants and just stop there without spending the $162K+ to install individual meters.  But if we do that, we would be hoping, without really knowing, that water consumption rates from average data is what the actual pattern is in our community.  Anyway It is hard to see how this project would support our overall property values.   There are all kinds of unfair economic divisions in any condo community that the HOA cannot solve.  It is not clear why we should try to solve this one.

— Lawrence