How Data Centers Affect Water Consumption and Why Submetering Matters
August 13, 2026
The Rising Cost of Operating an Apartment Community: Where Submetering Fits In
Operating an apartment community has become an increasingly expensive proposition. Across the multifamily housing industry, property owners and managers are dealing with higher costs in nearly every area of the business. Property taxes, insurance premiums, labor, maintenance, repairs and utilities are all putting pressure on operating budgets at a time when owners are also trying to maintain occupancy, meet resident expectations and protect the value of their assets.
The challenge for property managers is that not every expense can be controlled. Property taxes are largely determined by local assessments and tax rates. Insurance costs are influenced by factors ranging from regional risk to broader conditions in the insurance market. Labor costs continue to rise as property owners compete for qualified maintenance and management professionals, while the cost of materials and outside services has made routine maintenance more expensive. These expenses are important components of an apartment community's financial performance, but a property manager has limited ability to directly influence many of them.
Utilities present a different opportunity. Water, sewer, electricity and natural gas are necessary to operate an apartment community, but the amount of those utilities a property consumes is not necessarily fixed. Consumption can change based on resident behavior, weather, occupancy, plumbing conditions, building efficiency and maintenance. That makes utilities one of the operating expenses that property managers can actively monitor and manage.
Utilities Are More Than Just Another Monthly Bill
For many apartment communities, utility expenses represent a significant portion of the property's operating budget. Water and sewer can be particularly challenging because consumption occurs throughout the property every day, often without property management having detailed information about where that usage is taking place.
A master meter can tell an owner how much water an entire property consumed, but it does not necessarily explain why consumption increased or which individual apartments may be responsible for unusually high usage. If a community experiences a significant increase in its water bill, management may know there is a problem without having enough information to immediately identify the source.
That lack of visibility can make utility management difficult. A leaking toilet, continuously running faucet or plumbing issue inside an apartment can waste a substantial amount of water before anyone recognizes the problem. At a community level, hundreds of small instances of unnecessary consumption can add up to a meaningful increase in operating expenses.
This is one of the reasons submetering has become an important consideration for multifamily property owners. By measuring utility consumption at the individual apartment level, submetering provides a more detailed picture of how utilities are being used throughout a community.
Submetering Changes the Way Properties Look at Consumption
The concept behind submetering is relatively straightforward. Rather than treating an entire apartment community as one utility consumer, individual apartments can have their consumption measured separately. This creates a much clearer connection between usage and the cost associated with that usage.
For property managers, that information can provide greater visibility into the property's utility performance. If consumption changes significantly from one billing period to another, management has more information available to investigate the reason. If a particular apartment shows unusually high usage, it may provide an opportunity to identify a potential leak or another issue before it becomes a larger expense.
The benefits extend beyond identifying problems. When residents are responsible for their individual utility consumption, where permitted by applicable laws and regulations, they have a greater financial incentive to pay attention to how much they use. A resident who knows that excessive water consumption can affect their monthly bill may be more likely to report a leak, avoid unnecessary water usage, and become more conscious of conservation.
An Expense Property Managers Can Actively Manage
The distinction between controllable and uncontrollable expenses has become increasingly important for multifamily operators. When operating costs rise across the board, management teams have to determine where they can realistically make a difference.
Utilities are one of those areas.
Property managers cannot determine the price charged by a local utility provider, but they can take steps to understand how much their property is consuming. They can identify opportunities to reduce waste, investigate unusual usage and implement programs that encourage conservation. In communities where residents can be billed for their individual consumption, management can also potentially recover a portion of the utility expense rather than absorbing the entire cost as a property operating expense.
This does not mean submetering eliminates utility costs. Apartments still require water, electricity and other utilities, and utility rates can continue to increase. The objective is to create better visibility and accountability so that property owners and managers have more control over the portion of the expense they can influence.
For an industry where relatively small improvements in operating expenses can have a meaningful impact on a property's financial performance, that distinction matters.
Data Has Become an Important Part of Utility Management
The multifamily industry has increasingly embraced data as a tool for managing properties. Property managers monitor occupancy, rent collections, maintenance requests, leasing activity and resident satisfaction. Utility consumption can be approached in much the same way.
Submetering provides property managers with information that can be used to understand consumption patterns over time. Instead of looking only at the total amount of a utility bill, management can examine usage at a more detailed level and identify changes that may warrant further investigation.
That information can also become valuable when evaluating the effectiveness of conservation efforts. If a property introduces water-saving fixtures, addresses plumbing issues or begins billing residents for individual consumption, usage data can help management determine whether those efforts are producing measurable results.
The ability to see those trends is particularly important as utility costs continue to rise. When the cost of a utility increases, reducing unnecessary consumption becomes even more valuable. A property that has accurate information about its usage is in a stronger position to respond than one that simply receives a larger bill each month.
Submetering Is Not a Replacement for Good Property Management
While submetering can be an effective utility management tool, it is not a substitute for sound property management practices. Meters must be properly installed, maintained and monitored. Plumbing problems still need to be addressed, residents need to understand their utility responsibilities, and billing must be accurate and transparent.
The most effective utility management strategies typically combine several practices. Accurate metering provides the data. Regular monitoring helps identify unusual consumption. Preventive maintenance can address leaks and equipment problems. Resident communication can encourage conservation. And an effective billing process can connect individual usage with the appropriate cost.
When these elements work together, utilities become easier to understand and manage.
Protecting the Bottom Line in a Higher-Cost Environment
The rising cost of operating an apartment community is unlikely to be solved by a single initiative. Property owners and managers will continue to face challenges from insurance, taxes, labor, maintenance and other expenses that are influenced by factors outside of their control.
That makes controllable expenses even more important.
Utilities stand out because consumption can be measured, monitored and influenced. Submetering gives multifamily properties a way to move beyond simply knowing how much the entire community consumes and toward understanding how that consumption is distributed throughout the property.
For apartment owners and property managers, the question is increasingly becoming not whether utilities are an expense, but how effectively that expense is being managed.
In an environment where operating margins are under pressure, better information can lead to better decisions. Submetering is one of the tools available to multifamily operators looking to gain that information, encourage more responsible consumption and potentially improve utility cost recovery.
As the cost of operating apartment communities continues to rise, those incremental improvements can become increasingly important. The properties best positioned to manage the changing economics of multifamily housing may not necessarily be the ones that eliminate expenses, but the ones that understand their expenses well enough to determine where they can make a difference.
