I know that everyone loves a good groundhog prediction. I mean, what is not to love about a large burrowing rodent telling you what the weather will be (with greater accuracy than the Farmer’s Almanac or a meteorologist)? However, I don’t want to dwell on predicted weather patterns, I want to talk about catastrophic weather events. The Polar Vortex, snowmageddon, the Pineapple Express, Interthread NameX here. Weather that shocks us and impacts our insurance through catastrophic damage.
We had twenty-three of these events in 2023, which is a noticeable increase from the eight events we have seen on average annually since 1980. These events cost millions in damages and brutalize our bottom lines. What is more, they seemingly support the misconception that utility expenses are uncontrollable. Our multifamily industry clings to the notion that, due to catastrophic weather events, we cannot actively control our utility expenses. It is like we trip while carrying a plate of donuts, one accidentally goes in our mouth, and we subsequently use that event to justify consuming an entire pie.
Yes, it is true, even a prescient groundhog cannot always anticipate the epic weather events that affect us. That does not mean that the utility expense category is uncontrollable. We do not budget for having a property fire, but that does not mean we treat insurance costs as uncontrollable. We actively engage to reduce and manage these costs as much as possible. Why should we treat the utility expense category differently?
We should be able to predict, manage and reduce what is our utility consumption and spending. We choose and install the fixtures, we plant vegetation to create curb appeal, and we run our equipment as much as we choose. It is ours to control. So let’s not blame the groundhog, mother nature, or something else for our choice to not manage or to ignore our expenses.
