The Benefits of Submetering in Multi-Family Residential 

Submetering in Multi-Family Residential

Rising energy costs and the environmental impacts of energy consumption are at the forefront of Canadians’ minds. Statistics Canada reported that Alberta’s electricity prices rose by 128% year-over-year in July. These increased costs, along with the environmental impacts around energy consumption, have prompted organizations and individuals to look for ways to reduce their utility usage. 

Traditional methods of charging residents for utilities by including them in fees (based on square footage, for example) might seem straightforward on the surface, but it can end up costing both property owners and residents more.  

Residential and commercial buildings in Canada account for 17% of our energy consumption. Reducing that consumption is a key part of the overarching strategy to reduce our greenhouse gas emissions and help meet the Government of Canada’s commitment to achieve net-zero by 2050.  

Different Methods of Utilities Distribution 

There are three main ways to deliver utilities to a residential unit in a multi-family property.  

  1. Master meters: Traditionally, utilities have been delivered to a master meter, and the total cost of these services is split evenly between the units and included in each resident’s monthly rent. Every resident pays the same price, regardless of how much water or electricity they use each month.  
  1. Individual unit meters: Some properties use individual meters in each suite, and utility hookups and pricing are managed directly by the resident. They assume the costs of access fees and other riders connected to their utility bill and are subject to rate fluctuations. In this case, property owners have no visibility into what the resident is using or how much they pay. 
  1. Submeters: Properties with submeters receive water, gas, and electricity through a master meter, but also have a submeter in each unit to measure individual consumption. Residents pay the submetering company for their utilities, based on how much they use. The property owner might assume the access fees and the resident may have the benefit of a lower rate if the property manager has negotiated one with utility providers. 

The Benefits of Submetering 

When it comes to energy consumption, knowledge is power. With submeters in each unit, both residents and property owners have a deeper understanding of consumption habits and opportunities to reduce waste. 

A clear picture. Individual submetering allows residents to see how much energy they use, and property owners can understand their residents’ usage. With a clear picture of consumption, property owners can make informed decisions about equipment maintenance and upgrades, finding ways to optimize the building’s energy use overall. In turn, residents can see their own consumption patterns, and make decisions accordingly.  

Responsibility… and accountability. With submeters, residents are responsible for their own energy, heat, and water use rather than paying a portion of the bill for the entire building. They only pay for what they use, rather than what their neighbours might be consuming. This motivates residents to be mindful of their daily energy usage. 

The potential for better rates. Some property owners, like Avenue Living, can negotiate lower bulk utility rates for their residents rather than a single customer could on their own. In addition, property owners might assume some or all of the access fees.  

Environmental benefits through reduced emissions. Studies suggest that submeters can reduce a building’s energy consumption significantly — a study in New York revealed that submetering reduced consumption by 18-25%, while a building in Ontario recorded even bigger savings (approximately 40%). This is likely because residents can see their consumption and make choices to reduce it, and property owners can realize the tangible benefits of installing energy-efficient fixtures.  

Increased efficiency and building value. The ability to monitor consumption also helps property owners and managers spot equipment failures or building inefficiencies. A spike in water consumption could indicate a leak, for example, or high energy use could flag the need for appliance upgrades. This insight allows the property owner to be proactive about maintenance, increasing the property value and comfort for residents. 

Avenue Living’s Submetering Strategy 

Avenue Living has transitioned several buildings to a submetered system. The submeters we have installed are certified by Measurement Canada, and the program is implemented through a certified third-party provider.  

“Avenue Living still covers the cost of utilities in common areas and vacant units,” notes Daniel Klemky, Energy Manager at Avenue Living. “But with submetering we can now give residents the tools to take control of their own costs and be accountable for them. In many cases, we also give people the benefit of a much lower utility rate, due to our negotiations with the providers as part of our procurement strategy.” 

The comprehensive insight we get from submetering will allow us to accurately measure the impact of our energy efficiency capital improvements (e.g., replacing a furnace or installing solar panels). And as we continue to upgrade our properties through the deep energy retrofit program, in partnership with the Canada Infrastructure Bank, submetering will play a crucial role in meeting the reporting and data collection requirements.   

Submetering provides numerous benefits to both the resident and the owner and is becoming a common tool for property managers to quickly take control of energy consumption, and reduce emissions and operational costs.  

This commentary and the information contained herein are for educational and informational purposes only and do not constitute an offer to sell, or a solicitation of an offer to buy, any securities or related financial instruments. This article may contain forward-looking statements. Readers should refer to information contained on our website at https://madison4.wpenginepowered.com/forward-looking-statements for additional information regarding forward-looking statements and certain risks associated with them. 

Revitalizing Canada’s Housing Landscape: The Crucial Role of Retrofits  

retrofits

As cities across North America deal with a growing crisis in affordable housing, it is clear that the solution is not one-size-fits-all and it involves more than simply building new stock. The Canada Mortgage and Housing Corporation (CMHC) estimates that Canada needs to add an additional 3.5 million units, above the current build pace, by 2030 to restore housing affordability. With rising interest rates and inflated costs, the ability to own a home is becoming out of reach for many. Further, there’s a concern that there are not enough rental properties for the population who need them. Add to that the constraints of building permits, labour shortages, and spiralling costs for developers, it is essential to look at other ways to support individuals and families. One such approach is to retrofit existing housing stock.  

While building new homes is essential and necessary, reinvigorating existing housing is equally as important to ensure that people have safe and comfortable homes and to curb greenhouse gas emissions. With approximately 90% of Canada’s existing multi-family housing built before the year 2000, many of these buildings are reaching an age where renovations and upgrades are required to improve overall energy efficiency and quality.  

In a recently published CMHC report, it states that in order to achieve housing affordability, there must be a “variety of housing options available” including those for both ownership and rental, a mix of single-family and multi-family homes, and new builds and retrofits. “Partnerships and innovation are needed in all parts of the housing system,” says the report.  

Strategic Retrofits Are Key 

In 2022, Avenue Living embarked on a landmark partnership with the Canada Infrastructure Bank and other key industry partners to retrofit approximately half of its multi-family portfolio. The initiative demonstrates a solid business case for the property management industry to make widespread changes.  

Catalys, an energy and sustainability program designer, and one of the partners we have engaged to help achieve our deep retrofit goals, understands exactly what a difference these improvements can make. The firm has a track record of working with a variety of enterprise clients to help reduce their environmental impact by designing energy and sustainability programs, either through retrofits or improved processes. Catalys employs a data-driven technology and AI analysis model that helps property owners maximize the environmental benefits of retrofits and other investments. 

“The environmental impacts of demolishing an existing building and replacing it with a new development can be significant,” says Luke Ferdinands, CEO of Catalys. “Both deconstruction and construction are waste-intensive, and a deep refurbishment of an existing building cuts operational carbon emissions — without the emissions associated with building new.   Approximately 60% of embodied carbon emissions are associated with the sub-structure, frame, upper floors, and roof of a building. A deep retrofit will generally retain these elements, meaning on average, the carbon footprint of a refurbished building is about half that of the newly-built replacement.”  

The firm has provided consultation and support to Avenue Living throughout the project, from feasibility studies to ongoing program management. As the retrofits scale, Ferdinands and his team will continue to assist with managing complexity, verifying performance, and measuring success through data tracking and analysis.  

Benefits of Retrofits, from the Bottom (line) Up 

Retrofitting can be completed much more efficiently than new builds, which often require lengthy schedules due to permitting and other considerations. “In Canada, a new building can take well over two years to be completed”, says Ferdinands. “Retrofits can take far less time — and they can benefit from streamlined processes that some municipalities have in place to expedite the permitting for such projects. 

“When executed properly, deep retrofits can deliver buildings that appear to be totally different — they look newer and with a more modern aesthetic,” continues Ferdinands. “But more importantly, the resident experience of living there is also significantly improved.” 

Studies show that living in an energy-efficient or “green” building improves residents’ overall quality of life. Not only are they living in more comfortable spaces, but they experience better health through upgraded lighting and balanced heating and cooling. In many cases, these buildings can become a vital part of the social fabric of a community — as Canada’s Green Building Council (CGBC) notes, “everyone benefits when community members have access to healthy, affordable housing and when communities are resilient and can withstand extreme weather events.” 

Not all retrofits involve turning over the entire building; some upgrades can be quite simple, yet still achieve positive results. Less complex upgrades, such as boiler replacement or rooftop solar PV installations, mean residents can remain in place as retrofits occur with minimal disruption in their daily lives. “From a continuity perspective, it’s really important to make these upgrades as seamless as possible  to minimize the impacts to the people who have made that building their home,” says Ferdinands. 

These retrofits bring aging stock up to today’s standard, but they also ensure buildings are optimized for the future. “We’re making these buildings much more resilient,” says Ferdinands. “With more extreme weather — hotter summers, colder winters, and wildfire smoke – these upgrades really tighten up the building. We’re redoing roofs, adding insulation, improving windows, all of which help the building perform better in different conditions.” 

Social Benefits 

Ensuring existing buildings remain comfortable, desirable, and affordable places to live helps preserve communities. The ability to live in established neighbourhoods close to transit routes, schools, employment, and amenities offers a better quality of life for renters and encourages neighbourhoods to remain vibrant. Residents who are happy with their neighbourhood and comfortable in their homes are likely to stay, bringing added economic stability to a community. In addition, retrofitted, affordable rentals support a growing and stable population, and encourage local economic growth as working renters, seniors, and children all participate in their community, supporting nearby businesses and services. 

“Renewing these older buildings is vital for communities,” says Gabriel Millard, SVP, Capital Markets – Equity & Research, who notes that many are often demolished and replaced with larger, more expensive rental properties. “In Canada, where we have fewer and fewer options at the less costly end of the rental spectrum, renewal helps extend the lifespan of these buildings so they can keep housing families. We’re making sure that important piece of the rental puzzle stays on the market.”  

Retrofits for the Future 

As we deal with two major challenges — housing affordability and environmental impact — it’s becoming clear that retrofits to existing buildings are a key part of the solution. Through a strategic and sustainable implementation, property managers can bring buildings up to date without losing occupancy. At the same time, residents can reap the health, social, and financial benefits of having a comfortable, affordable place to live in an established community.  

This commentary and the information contained herein are for educational and informational purposes only and do not constitute an offer to sell, or a solicitation of an offer to buy, any securities or related financial instruments. This article may contain forward-looking statements. Readers should refer to information contained on our website at https://madison4.wpenginepowered.com/forward-looking-statements for additional information regarding forward-looking statements and certain risks associated with them. 

Building a Culture of Safety at Avenue Living

Safety at Avenue Living

A happy workplace is a productive workplace. But did you know that safety is a major contributor to employee satisfaction? Workplace injuries carry a significant impact, impacting tens of thousands of workers every year, affecting their families, co-workers, and communities. In 2022, Canada’s Worker’s Compensation Board (WCB) reported there were 4.33 injuries per 100 workers in Canada

One of Avenue Living’s core values is “Duty of Care,” and while we often talk about it in relation to our residents, customers, and our investors, it also applies to our workforce. That duty manifests itself in creating an environment that seeks to minimize risks for every member of our team, whether they work in our offices or out in the field.  

Safety is more than a set of policies and procedures, it’s part of an organization’s culture, and it flows from the top down.  

“Safety is connected to everything,” says John Price, Senior Vice President Health, Safety, and Environment (HSE). “The better your safety culture, the more engaged your teams are. Studies show that organizations who have highly engaged employees can reduce safety-related incidents by up to 70 per cent.” 

An article published by the Harvard School of Public Health notes that “engaged workers are more likely to be aware of their surroundings and best safety practices making them more likely to take steps to protect their co-workers.”  

This engagement also has a ripple effect. “Everyone wants to feel that they’re valued,” says John. “It’s true that happy employees are the best employees. It’s a key ingredient in building the highest performing teams.” 

In practical terms, facilitating safe work environments results in bottom-line benefits: reduced absenteeism, better employee retention, lower insurance costs (through reduced claims and a better safety record), and better overall performance. While there’s no way to eliminate risk completely, a positive safety culture increases trust throughout an organization — both with employees and their peers, and between employees and management, reducing disruptions to business. 

Avenue Living’s Culture of Safety 

“We’re focused on putting the tools for safety in people’s hands before they start work,” says John. Those tools include high-tech solutions but also plans and policies, training, and an organization-wide mindset that prioritizes everyone’s well-being. “Most workplace injuries are preventable when we’ve adequately equipped our teams with the knowledge, solutions, and planning necessary to carry out their jobs safely and effectively.” 

We achieved our Safety Certificates of Recognition (COR) from the Alberta government starting in 2020, which requires third-party audits of safety practices, and we’ve implemented various technological tools to help keep our remote workers safe, track incidents, and monitor hazards. Software such as SitePhotos allows us to share visual records of maintenance jobs, and the ClearRisk application helps us track hazards and document risk mitigation. For lone workers, SolusGuard provides an extra layer of security via a panic button and app that prompts regular check-ins. 

Always Moving Forward 

But technology is only part of the story. A culture of safety ensures that everyone in the organization, from the top down, is committed to preventing incidents and putting barriers in place so when an incident occurs, no one gets hurt. Humans make errors and it’s important that, as a company, we work together to build capacity around these situations. “It’s how we grow and improve. There’s no better teacher of how to make work safer than those who perform the tasks,” says John. 

Continuous improvement is a cornerstone of our organization, and we’ve taken a closer look at how our HSE team is structured and found a way to best serve the diverse needs of our different business units.  

“We’re creating some bench strength and giving each team dedicated specialists,” says John, who notes that the restructuring was in response to hearing different business units’ needs. Now our self-storage, property management, and other areas have their own single point of contact with the safety team. This structure allows our safety specialists to develop deep knowledge of each business and work closely with the team to identify challenges and create solutions. This is key to a proactive safety culture. 

Over the past year, we have also developed more robust emergency plans. For example, in March 2023, we launched an emergency response plan across the organization that outlines safety procedures for potential risks.  

Across our organization, we’re developing a robust incident command system to help our teams manage emergencies such as extreme weather events. This system provides a platform for how we respond and recover from major events that affect our customers, teams, and assets. 

Additionally, management performs regular site visits. “Being on-site is the best way for them to understand the safety requirements in our day-to-day operations,” says John. It also allows opportunities for the entire team to connect in person, strengthening trust and opening the lines of communication.  

All these efforts serve to keep us — and the communities in which we work — safe. And they have an added benefit. As a customer-centric organization, taking care of each other allows us to focus on the thing that sets us apart: delivering superior service to our residents and customers across North America.

This commentary and the information contained herein are for educational and informational purposes only and do not constitute an offer to sell, or a solicitation of an offer to buy, any securities or related financial instruments. This article may contain forward-looking statements. Readers should refer to information contained on our website at https://madison4.wpenginepowered.com/forward-looking-statements for additional information regarding forward-looking statements and certain risks associated with them. 

Multi-Family Retrofits: The Case for Going Green

Multi-Family Retrofits

In June 2022, Avenue Living and the Canada Infrastructure Bank (CIB) joined forces to commit $162 million towards deep retrofits across our Canadian portfolio. The partnership will fund upgrades to 220 residential buildings, touching approximately 6,700 homes and helping lower the carbon emissions for nearly half of our Canadian portfolio.

As a key pillar of our ESG efforts and overall strategy, Avenue Living has always made responsible and impactful capital improvements — for example, installing a better-insulated roof, higher-efficiency windows, or a new boiler. These energy conservation measures (ECMs) extend the life of the asset and make living spaces more comfortable in summer and winter.

Our portfolio spans a region with some of the coldest weather in North America, and these upgrades help increase energy efficiency. A better-insulated building envelope, for example, keeps the building temperature more even year-round and allows heating and cooling systems to work more effectively. Upgraded high-efficiency HVAC systems, paired with better-insulated building envelopes, help reduce consumption.

In 2020, commercial and residential buildings accounted for 17 per cent of Canada’s GHG emissions (excluding construction and building materials, which pushes the number to 30 per cent). The Government of Canada is committed to reducing carbon emissions to below 45% of 2005 levels by 2030 and reaching net-zero by 2050 — and estimates that, to meet that goal, Canada needs to retrofit 600,000 homes and 750 million square feet of commercial space per year between now and 2040 to meet those commitments.

Avenue Living is doing our part while paving the way to setting a new standard in the multi-family industry. As an open-source advisor and collaborator, we are sharing how these retrofits can benefit investors, residents, and our communities at large. Our partnership with the CIB aims to reduce emissions from buildings in the program by 50 per cent, and pilot projects are already underway.

CHOOSING ENERGY CONSERVATION MEASURES (ECMS)

Retrofitting buildings to create the most energy savings is based on careful analysis, energy audits, and a well-developed strategy for capital improvements. As part of our current acquisition strategy, Avenue Living systematically determines which capital improvements will be the most impactful for each property. Deep energy retrofits are no different.

Before a property can be included in the CIB retrofit program, it must meet Investor Ready Energy Efficiency (IREE) Certification. IREE is a global framework that signals a building has undergone appropriate due diligence and the retrofit projects have been developed by qualified professionals who adhere to a series of protocols for assessing risk, comparing savings, and evaluating opportunities. This third-party certification reduces costs for transactions, capital, and due diligence and increases investor confidence through reliable and consistent projections.

Baselining is essential to determining the viability of any retrofit project, and as part of IREE protocols, our buildings have undergone multiple energy audits. When we examined our portfolio in search of the most impactful ECMs, we discovered our larger properties — those with more than 24 units — presented our best opportunity to reduce GHG emissions. Energy audits have also revealed that wood-frame buildings can be further optimized compared to brick or concrete buildings, which are already quite efficient. In addition, we closely evaluated other aspects of the building’s mechanical operations and construction for ways to increase efficiency — roofs, boilers, and exterior cladding, for example.

“As we were going through the program details, we looked at a number of factors to determine if a building would be a good candidate for upgrades, for example, will the improvements offset enough energy and emissions to be financially viable, or is the building equipment old or inefficient,” says Daniel Klemky, energy manager at Avenue Living. “If building equipment is reaching the end of its useful life, there may be an opportunity for us to modernize that property in a cost-effective way.”

Our retrofits include:

  • Upgraded heating, ventilation and cooling (HVAC) systems, which allow us to heat and cool buildings more efficiently and keep temperatures even throughout the property
  • An upgraded building envelope and roof, which improves insulation, eliminates the possibility of pipes freezing and improves aesthetics
  • Triple-glazed, high-efficiency windows, to reduce heat loss (or gain)
  • Low-flow water fixtures, to reduce water consumption and provide a better experience for residents
  • LED lighting and more efficient fixtures, for brighter, more effective lighting in common areas
  • Solar panels, where applicable, allow properties to generate their own power, reduce consumption, and offset operational costs

Implementing these retrofits requires coordination — and manpower. Our plan has incorporated a phased approach, which allows us to make as many updates as possible without overwhelming the trades in each city. This perfectly illustrates the combined benefit of environmental projects: job creation, and the need for expansion in the sector. Canada’s Green Building Council estimates that by 2030 the opportunities for growth in the green building sector could account for approximately 1.5 million jobs and contribute $150 billion in GDP.  

“It is difficult to retrofit multiple buildings in a single market at one time,” says Ward Woolgar, senior vice president, capital investment at Avenue Living. “We’ve planned out our retrofits with projected schedules and dates to make sure we have the tradespeople we need available at each phase to minimize delays.”

The solar project slated for Wetaskiwin Mall, for example, requires extensive work on the roof. “It’s not as simple as just putting solar panels on top of the existing structure,” says Klemky. “There’s a great deal of work that has to happen to the roof first, such as detailed design, structural reinforcement, electrical capacity considerations, and regulatory restrictions.” The mall’s solar retrofit, however, will also account for the biggest reduction in emissions.

BENEFITS BEYOND EMISSIONS REDUCTION

While reducing consumption and emissions is our primary goal, we know that these building improvements have other benefits for residents. As an active property manager, we recognize that happy residents stay in their homes for longer, and these upgrades will enhance the comfort and livability of their rentals. Studies show North Americans spend approximately 90 per cent of their time indoors, so air quality, temperature, and lighting are more important than ever.

These renovations require minimal disruption to residents’ lives or schedules, and in most cases happen outside the suites. Although retrofits like window replacement or upgrading water fixtures do require apartment entry, these jobs can be completed in just a few hours, like any regular maintenance task. That said, any construction work in a building has an impact on its occupants, and we’ve developed a plan to communicate with our residents early and often to ensure they understand the work schedule.

“These updates will have a noticeable effect,” says Woolgar. “For example, our upgrades to HVAC systems will mean there’s more even heating throughout the building, so we’ll avoid the problem with overheated hallways and common areas that a lot of apartment buildings have. New windows and fixtures will also mean residents can enjoy more even temperatures in their suites, better water flow and lighting, and improved aesthetics.”

A GREENER FUTURE FOR MULTI-FAMILY

The United Nations estimates that 80% of the buildings in cities today will exist in 2050. Reducing emissions through deep-energy retrofits is key to ensuring Canada — and the world — meets sustainability targets. For Avenue Living, the benefits of this retrofit project are very close to home: we see these retrofits as an opportunity to demonstrate to the industry what is possible. We aim to create a portfolio of properties that provide residents with safe, affordable, comfortable, and modern homes — ones that are well-equipped for a low-carbon future.

This commentary and the information contained herein are for educational and informational purposes only and do not constitute an offer to sell, or a solicitation of an offer to buy, any securities or related financial instruments. This article may contain forward-looking statements. Readers should refer to information contained on our website at https://madison4.wpenginepowered.com/forward-looking-statements for additional information regarding forward-looking statements and certain risks associated with them.


Renters Have Stepped Up Efforts to Address the Housing Crisis — It’s Time for Property Managers to Do the Same

Customer Orientation Real Estate

At the heart of our business model lies a strong commitment to serving our customers. We’re keenly aware of market changes and take proactive steps to ensure we’re meeting the wants and needs of the workforce housing demographic. Our approach sets us apart from other asset managers in the industry and has allowed us to build lasting relationships with our residents.

Read more about the benefits of this approach in a recent article that examines how property managers can better serve their residents: