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Recently my husband and I have been toying with the idea of making a leap from carefree renting to homeownership. It is a step that we have successfully avoided for the last 12 years, while renting a rather large apartment in Chicago from a landlord whose friendly personality has certainly played a major role in the postponing of a home purchase.
Although this is still nothing more than an idea, we actually visited a few open houses to explore what the Chicago real estate market has to offer. I wouldn’t want to bore you with all the details, but I do want to share one particular finding made during this experience.
It appears that a lot of multifamily buildings in Chicago offer homebuyers an “incentive”—the water and sewer bill is included in the building’s monthly amenity fees, which in Chicago are commonly in the range of $150 to $250. Mind you that in addition to water and sewer, this fee includes various other maintenance services, including snow clearing in the winter months, which is not to be taken lightly in Chicago.
It is important that every city offers affordable living to its residents, but I have to admit that I am taken aback by the idea that this may be offered at the expense of water and sewer services. Regardless of what portion of the amenity fee is dedicated to cover water and sewer rates, does this mean that the true water usage is not accurately reflected? As a long-time uncommitted renter, perhaps I lack detailed knowledge of the breakdown of amenity fees; however, I do think that accurate metering should be in place for all users.
Water treatment distribution and collection services are very capital intensive, yet they are significantly underpriced and the infrastructure is underfunded. The price of water in the U.S is one of lowest in the developed world and per-capita consumption levels are actually the highest in the world. Most Americans enjoy some of the cheapest water prices in the industrialized world, and because of how our systems are managed, the price of water does not reflect the true cost of water supply infrastructure.
Therefore, I think that water metering versus fixed rates is a step that can help reform this issue. Water metering not only enables utilities to measure the amount of water used by customers, but it is also essential for implementing volume-based water charges. (See this month’s Meter Source Special Section, pages 30 to 36.)
Industry experts have determined that metering is a primary component of an effective water conservation program. High water consumption levels create large volumes of wastewater, which increase maintenance and operation costs of sewage treatment plants. By reducing water consumption, water metering actually helps to reduce water infrastructure costs. Drop in water demand also lowers the energy used for pumping, treating and delivering water, thereby reducing utilities’ energy costs. But most of all, when used with an effective pricing system, water metering is an effective incentive to reduce water consumption.