Communities Are Becoming Smarter, Thanks to Technology

The resident comes home from a business trip, and right away it’s evident something is wrong. Very wrong. There’s water all over the top of her toilet, dripping onto the floor. Pieces of the ceiling have fallen into her bathroom, and they’re speckled with patches of black mold.

It’s likely the neighbor upstairs had a leaky toilet for some time and just didn’t realize it. Suddenly it has become this resident’s problem.

In years past, there was no real way of knowing about an issue like this one until it was too late and a resident reported it. But today, because of smart home technology, apartment managers can detect, monitor, and repair water leaks and many other issues that otherwise can cost properties thousands of dollars and a lot of ill will.

“If you’ve never had to deal with a $200,000 repair because of a leak, then you might not see the value,” said James Johnson, vice president of resident experience at RealPage, a company near Dallas that provides software and data analytics to the real estate industry. Once a property manager experiences a major project stemming from a burst pipe that could’ve been detected through a monitoring device on the water line, he said, the choice becomes clear.

“They shy away at the beginning,” Johnson said. “But that investment is going to pay off for properties in the long run.”

Smart technology can remotely control heating and cooling systems, lights, door locks, solar power, and many other devices to help make an apartment more efficient. But what makes sense in today’s economy, and what goes into the decision to implement this new technology? Property managers who haven’t faced these questions yet are sure to consider them in the future.

Gee-whiz technology

This kind of technology is part of a global concept called The Internet of Things. Forbes magazine describes IoT as the ability to connect anything with an on-off switch to the Internet and to each other, creating a giant network of “things.”

In multifamily housing, the smart technology solutions gaining the most traction today, not surprisingly, are those that save money for the property management company. They include devices that detect water leaks inside apartment homes and in irrigation systems throughout the property.

These solutions aren’t necessarily designed for the resident’s convenience. But eventually, as research-and-development costs level out, prices will drop and more communities will invest in technology that lets residents control their thermostats, home security systems, and lights with an app on their cell phones. Setting up a network that allows for water monitoring, for example, can allow apartment communities to plug in more uses in the future. Today communities that have invested in the state-of-the-art solutions for residents are marketing themselves as ultra-modern to appeal to tech enthusiasts. Still, the software providers are focused on appealing to the practical side of property managers.

“Our value proposition is not in the cool resident software you’re going to get but in the savings you’re going to see,” Johnson said. “But it is pretty cool, and it’s going to differentiate your property on the market.”

Leaky toilets

More than 12 percent of all indoor water use is wasted because of poorly fitted or worn-out toilet flapper valves, according to research by the U.S. Environmental Protection Agency and the American Water Works Association. Sensor Industries of Camarillo, Calif., cites this figure as a main reason behind an investment in its WaterR8 conservation system, which it markets to multifamily communities for lowering costs and increasing revenue.

“We have found up to 40 percent of the toilets leaking in what was claimed to be well-maintained complexes,” a company brochure reads. “Just being alerted to faulty or stuck open flapper valves could save you 10 percent to 20 percent off your current bill.”

Wade Horigan, the company’s director of sales, explains how the technology works: Each toilet in each apartment is equipped with a sensor that monitors the length of time it takes for the tank to refill with water after it’s flushed. The sensors are calibrated to the normal operation of each toilet’s brand and model. They’re connected by radio-frequency technology to a monitoring device that spots variations and sends out alerts. The device beeps inside the apartment to alert the resident and sends an email or text message to the property manager. The manager contacts the resident and dispatches a maintenance technician — all before the leak turns into something worse.

“Now it’s a matter of vacuuming up water, turning on fans, and opening windows, instead of moving someone into a motel and sending in a repair crew,” Horigan said.

The sensors cost about $49 per toilet, he said. They’re connected to a main gateway device the property manager uses that costs $149. Throughout the property, electronic repeaters that cost $25 each transmit the signals from apartments to the main office. The company charges a monitoring fee of $6 per apartment per year.

Systems like this one generate data in real time that helps property managers monitor water use patterns and determine where maintenance workers need to spend their time, Horigan said. This replaces the manual way of monitoring, which goes something like this:

The property manager in a community that includes water and sewer service as part of each unit’s monthly charges receives a bill that shows there has been a 20 percent increase in water use. It’s obvious there is a leak somewhere. So the property manager sends out a general notice to all renters saying there will be an inspection. The maintenance team goes into each apartment and to inspect all the toilets and determine which ones are broken and need to be fixed.

All of that unnecessary work can be avoided with smart technology. “Owners have been accepting that as an overhead expense,” Horigan said. “Now instead, they know the toilet in Unit 102 needs help. You’re never fixing a toilet that is working fine. You’re saving on maintenance and just fixing those that need to be repaired.”

The company rolled out its product in March 2016 in Southern California, where water use has become a priority over the years because of droughts and rising costs. The customers saw results right away, he said, and the system is projected to recover costs for apartment communities within eight months. The company is launching nationwide this year, targeting metropolitan areas like Boston and Atlanta, where sewer costs are higher than average.

In the future, property managers can expect to see similar devices developed for showers to help make users aware of water conservation, Horigan said. Dripping faucets, another big water waste area, are not as cost-effective to monitor right now.

Another trend, industry watchers say, is in systems that allow for submetering. In communities where one main water meter serves multiple apartments, it’s impossible to tell which residents are using more water than others.

That means Joe, a single airline pilot who’s gone most of the time, is paying the same for water every month as Bill and Donna, who have six children, Horigan said. With submetering technology, Joe could now be charged according to his portion of water use instead of subsidizing the family down the hall.

More important, Horigan said, an awareness of personal water use can help residents conserve a resource that is becoming more precious with time. This concept appeals especially to younger renters, who have grown up studying global causes and are more interested in conservation than their elder counterparts.

“Conservation matters to them,” Horigan said. “They will pay a little more for an apartment if it means they’re going green and saving resources. A green, ecofriendly building is going to appeal to millennials.”

Outdoor irrigation

Water use outside of the individual apartments generates another major cost for rental communities. Irrigation systems frequently spring leaks and cause water to gush out, sometimes underground where the damage remains invisible until it’s spotted on a utility bill.

A solution by Banyan Water in Austin, Texas, monitors irrigation systems in real time and alerts property managers as soon as a possible leak is detected. “We track the water use, analyze it, optimize it, and verify our savings against actual utility bills to show we saved the dollars we say we did,” said Gillan Taddune, the company’s CEO.  “Water is finite. Rates are up … and water is the fastest-rising utility cost.”

She explains how the technology works: The company installs hardware on-site that collects information about water flow. Banyan Water IQ, a smart water-management platform, compares the data in real time to historical use gathered from previous utility bills. The property manager follows the activity on a computerized map using a software dashboard tool that shows where groundskeepers need to focus their attention. The software also calculates financial savings. This replaces the manual way of monitoring irrigation systems, which involves the property managers and maintenance crews consulting a paper map to determine where sprinkler heads are located and digging up water lines where they see the ground oversaturated from leaks.

In 2015, the technology saved LivCor multifamily properties 50 percent on its irrigation bills, conserving 70 million gallons of water, according to a case study published by Banyan Water. The savings prompted LivCor, a portfolio company of the Blackstone investment firm, to implement the technology in more of its properties. Today LivCor has 37 communities on the system and can monitor water use across its portfolio in Texas, California, Colorado, North Carolina, Kentucky, and Tennessee. Banyan Water hasn’t done any work in Florida yet but is actively seeking properties in this market, Taddune said.

She expects to see utility companies become more proactive about encouraging water conservation by offering financial incentives for cooperation from property owners. “Something should be done about the water crisis we’re all facing,” Taddune said. “I’m a big believer in helping the market solve problems through technology.”

Door lock systems

Another function that is saving property managers money allows electronic control of the locks on individual apartment doors. With today’s technology, property managers can adjust locks to fit a new key without replacing the hardware. The locks can be programmed with certain rules, such as an expiration date that matches the last day of the lease.

A side benefit is that maintenance teams can gain entry to multiple units where the locks are preprogrammed to match the passkeys that are programmed into their smartphones. This saves them time going back and forth from apartments to the office to pick up new keys, and offers more security than a single master key for the entire property.

The key technology has been developing in recent years, and there are several different options on the market, said Johnson from RealPage. Some rely on the resident’s Wi-Fi, some are connected by electronic tether to smartphones, and the most modern solutions are linked into a community-wide network that can transmit data about other devices, too, such as the toilet sensors.

Johnson sees all kinds of possibilities in future uses of this technology. For instance, property managers can prequalify potential new residents and offer them an agent-less tour by pre-programming the network to open a home to guests via password. At 15 minutes before the appointment, the technology could program the lock to work with the code, set the thermostat at a desirable temperature, turn on welcoming lights, and tune in a stereo to the guest’s favorite kind of music. All that would be missing is the chocolate chip cookies baking in the oven, although that could probably be arranged through smart technology, too.

One thing the industry is discussing, he said, is privacy of the residents. “We’re not going to display an occupied unit’s information,” he said. “The property manager is not able to see that the resident in 302 has her thermostat set to 82. We are very cognizant of privacy, so we’re taking a cautious approach.”

But the aggregate data could prove useful, he said. For instance, the system can tell a property manager that 85 percent of the residents are home at 6:30 p.m. on Tuesdays, which means that might be a good time to schedule a community meeting.

The future

In the U.S., smart home technology in apartments seems to be gaining the most traction in the West Coast region, Johnson said. In places like Seattle and San Francisco, people come home from their jobs at Amazon, Microsoft, Facebook, Twitter, and Google, and they want the latest gadgets in their home just like they have at work. “The consumers are expecting it — you have a much more technology-focused consumer regionally,” Johnson said.

But another population he sees as a potential early adopter of smart home technology is the elderly. That could very well affect parts of Florida known as havens for retirees because of the mild climate.

“Where I see a lot of value is in active-living or assisted-living communities,” Johnson said. “The applications here are just immense.”

For instance, some communities monitor the wellness of their residents with low-tech methods like placing a sliver of wood in each door. The manager then walks the property to spot doors that haven’t been opened and pays residents at those homes a visit to be sure they’re OK. Instead, Johnson said, smart technology can determine whether the resident has used a toilet, water heater, or pedometer device in the past 24 hours and alert property managers only when they detect a predetermined period of inactivity in a home.

Builders of single-family homes are experimenting with all kinds of other uses of smart technology. The Lake Nona mixed-use community in Orlando, for instance, has one of the few smart model homes in the nation that focuses on health-related technology, according to The Orlando Sentinel. Features include cork floors, air filtration and water purification systems, a vitamin C shower, variable lighting that helps with the circadian rhythm, an alarm clock that mimics sunrise, aromatherapy, a pedal desk, and iPads that provide access to local healthcare facilities for telemedicine. Prototype kitchen appliances are designed to help residents select healthy menus. Smart toilets act as mini-laboratories, testing urine for health conditions.

It might take a while for features like those to reach the multifamily market, where investing $250 in each thermostat control device wouldn’t show a quick return on investment, experts say. But eventually renters will come to expect more from their homes.

“This is the future,” Johnson said. “Some really fun stuff — and good value.”

Editor’s note: This column originally appeared in the Spring 2017 issue of Multifamily Florida magazine.