Boiler Based Hot Water in Multi-Family Housing

Recently I got into a discussion about the above topic that is somewhat business related and somewhat non-business. I thought I would research it and discuss history, problems and solutions in this format.  First boiler based hot water system in multi-family housing appeared in the 1960’s and 1970’s.  It was seldom installed after the late 1970’s.   My reading shows that many of these systems are still in use and others have been replaced with in unit water heaters.  I would like to explain how boiler based hot water works.  Instead of each unit having its own heating system, the complex has one (or more) larger units that heat water and transport the water through a piping system to individual units.

Builders and developers like this system, they only had to pay for one large unit, instead of dozens or hundreds of individual systems.  The advantage to these systems ends at this point.  Moving water from a boiler to the end user thousands of feet away, allows the water to cool and requires a very long and wasteful period to obtain hot water.  Wasted water has three costs first the cost of heating the water, the cost of the water itself and the cost of system repairs and updates on the transport system and boiler. Developers of these property had no interest in the operating cost and appeared happy at the savings this system offered.

All machines require repairs and replacements, the problem with boiler based hot water in multi-family housing is just that.  Boilers last a long time; I have seen some in operation more than seventy-five years. Despite the long life, they are not very energy efficient and the increase in cost of natural gas makes them very expensive to operate. Operating cost also increase, because few companies service boiler systems.

Second problem is transporting hot water through pipes.   Repairs to pipes can range from a few dollars to several thousand dollars.  The cost of repair is determined by time spent accessing the pipes and finding the leak.  leaks, with no tear out and having access to the pipe, the leak might be a few hundred dollars to fix.   If you have to tear out a wall for repairs, the cost might be a thousand dollars or so.  Underground pipes may require digging with heavy machinery, replacement of sidewalks, curbs, parking lots and landscaping and these repairs may cost in the tens of thousands of dollars.   The issues posed by piping is the life cycle.  Many people thank pipes are working and will last forever are wrong.

Often a method using Nitrogen is used to locate underground leaks.  Professional companies are required to complete this test and analysis.  Once leaks are determined, repair cost can be determined.

Researching the life of copper, lead or plastic pipes, most sources will tell you they have a life cycle of fifty years.  After this point the cost of running an underground boiler system becomes very expensive.   The pipes will require regular repair and or replacement.  Some owners have new piping put inside of existing pipes; this process is called bursting.  Other owners make the capital investment to replace the system with stand along units. In multi-family buildings using one large hot water heater per building is often the most cost-efficient solution.  Other multi-family solutions include individual units for each apartment or condo.

When the time comes to make large capital investments in the boiler system, doing your homework and having skilled experts complete a plan is paramount to the success of the project.   When designing a solution cost, water and energy cost, should be reviewed along with all options for the project.

Gold Home Inspection

Marty Goldsmith is a Kentucky Licensed Home Inspector # 266196, and Certified Professional Inspector # 21060317, that provides home inspections in the Louisville KY area.  I also have considerable experience in real estate investments and house flipping.  I have knowledge of several of these systems in Louisville, many of them work and operate well and yield higher operating cost. I also know of other systems that have not been property serviced and have operation cost that are not manageable.  In future blogs I will do an analysis of repair cost versus replacement.