Glossary

Submetering (Direct-Metered Utilities)

Also known as: Direct Metering, Individual Metering

The installation of individual utility meters at each unit so that a resident's actual water, gas, or electric consumption is measured and billed directly by the utility or a third-party submetering billing company, rather than allocated by formula as under RUBS.

Submetering is generally the preferred long-term solution to master-metered utility cost relative to RUBS: it bills residents on actual measured usage, documented to meaningfully reduce consumption — particularly water — once residents see and pay for their own usage, and it avoids the allocation-formula legal exposure RUBS carries in many jurisdictions. The tradeoff is upfront capital cost and construction disruption, since retrofitting an occupied building with individual water submeters is markedly more expensive and invasive than installing them during new construction, which is why submetering is a near-universal design standard for new multifamily development but a selective, ROI-underwritten retrofit decision for existing-vintage acquisitions. Owners evaluating a retrofit typically compare submetering's installed cost and payback period against simply adopting RUBS, which captures much of the same reimbursement-income benefit at a fraction of the capital cost but without submetering's conservation effect or reduced legal-risk footprint in stricter states.