Water and Sewer Costs in Cleveland area

[Bob Collett]

I am trying to find solutions to the high cost of water and sewer relative to the rent income and other costs of ownership.  My questions are:

1.) How can we reduce tenant water consumption in a 2 family property... especially a section 8 property.

2.) Are there programs where MF landlords can get subsidies to help pay the cost of monthly water/sewer bills.

3.) Has anyone worked with installing separate meters in 2 family properties in the Cleveland area.  What are the costs? Will the water company bill tenants for separate meters? Can we make tenants responsible for water on their lease if we have separatge meters

Thanks

Bob

[Gwen Fyfe]

Water bills are the bane of my existence, I could ramble about this subject all day. I don't want to do things like remove external spigots, because if tenants have space for a car or garden I want them to get full use from the property. But I've tried a lot of things to handle the bills.

You can make the tenant responsible if they have their own meter, and I've done that in a couple units, but I wouldn't recommend it at all. The issue is that if they don't pay, you as the landlord need to pay the whole back bill and reconnection fee to turn it back on for the next tenant. If I'm dealing with an eviction or less than friendly move out and they were responsible for their own water, I budget $400 for the water. It sucks. The only people I let do that now are inherited tenants who have been paying their own water for years.

For subsidized programs, you can get some utility reimbursement for what you're paying - also often for providing appliances! I have one EDEN tenant in a 3 bedroom house who I pay water/sewer, and provided all appliances. We're in the process of renewing her lease and it looks like I'll be receiving $152 monthly for providing the water and kitchen appliances. That's a big help. I really can't recommend EDEN enough, they're much easier to work with than CMHA, and just on a human level their programs are really reaching the people most in need of stable housing. If you're dealing with apartment buildings, I know Cleveland would love to have more landlords sign on to provide whole buildings of subsidized housing for vulnerable populations like kids aging out of foster care, and I'm sure there would be a lot of subsidies available there. I think they do a quarterly request for proposals on this? It's been a couple years since I looked at it.

On meters - depends if you're really in Cleveland, or Cleveland area, because cities vary. Most of my rentals are in Bedford, which has a ridiculously high minimum monthly charge per meter, $53.91 per month. Only units I have that ever go over are families or have a leak. I have one lot with a 3 bedroom house (family with 2 kids), and three efficiency units, each with a bachelor in them. If you put all three of these guys in 1 unit they still wouldn't go over the minimum. But, because it's 4 units, I pay a minimum of $215.64 for water at that lot every month. And the minimum goes up every year. If I could have it on one meter I think I'd probably be at about $90 a month.

So in Bedford or cities like it with high minimum charges I'd actually like to get all my small multifamilies down to just 1 meter. But because the minimum is so high, one thing I have had good luck with is covering the minimum, and invoicing tenants for anything above it. It does create work, but I haven't had any push back at all from tenants about it as long as I'm up front at the start of the least. And because of the extra motivation to keep water use down, they hardly ever actually go over! (Edited to add: If/when I have more rentals in the city of Cleveland, I'll probably cover an average monthly charge and invoice for anything over it. Cleveland water's site is a nightmare but they do provide clear usage data which would be easy to present to a new tenant. Here's the report showing what the average bill is, I'll pay that, I'll invoice you for above-average usage, and we're all set.)

The bigger issue I've had is tenants not reporting running toilets or "small" leaks, even when I contact them to ask because the water bill shot up. A lot of tenants are suspicious of landlords (understandably in Cleveland I think, a lot of tenants get treated terribly) and don't want to seem like a problem or don't want me in their house. What I've started doing is telling tenants at lease renewals, and reminding them whenever we're in contact, that 

1. taking care of repairs while they're still small saves me money, so I really do want to hear about the repairs, I won't think they're a nuisance or use it as an excuse to check on their housekeeping, and 

2. if they call me in for an early fix on something that will save me money, I'll do a nice little extra for them while I'm there. A leak running for a month in the city of Cleveland can be hundreds of dollars. Upgrading a shower head or kitchen faucet costs maybe $80 and takes 20 minutes, people love it, and it's nice for the next tenant too. Bringing over a big pack of the super strong allergen-preventing furnace filters is much appreciated when people have kids or health problems. Small gestures, builds a lot of trust, gets me a lot more reports of small maintenance issues.

Maybe not feasible for bigger property managers, but for a mom & pop landlord like me managing a few dozen properties, I know all my tenants and properties pretty well and this makes a huge difference. I think of it like websites rewarding white-hat hackers who point out vulnerabilities in their site. :)