What is Deferred Maintenance and How Much is it Costing US Building Owners?
According to Rick Biedenweg, the President of Pacific Partners Consulting Group, “every $1 in deferred maintenance costs $4 of capital renewal needs in the future.” While the seemingly obvious solution is to fix problems as they arise, the primary reason for deferring maintenance is cost. Deferred maintenance can have various meanings, but often is related to covering real problems with cosmetic or temporary solutions.
Another element of deferred costs when making repairs or replacements is choosing lower cost options for short-term savings. Windows are a perfect example with a wide range of starting costs, but all windows are not created equally. A low-cost window could result in more maintenance costs down the road than a higher cost choice. Some higher end options may provide additional savings in the form of energy efficiency or tax incentives. This could also apply to other examples such as HVAC systems and lighting systems. For example, in Washington, D.C. one building’s HVAC system upgrade contributed to an energy reduction of 35%, which saves nearly $800,000 annually.1
Deferred maintenance comes with many negative impacts such as possible safety hazards, compliance issues, expensive emergency repairs, harm to productivity, and system failure. The cost of delaying a necessary repair quickly adds up. According to Building Owners and Managers Association (BOMA), repair and maintenance account for about 15% of total expenses.2 Additionally, identifying and improving building operational problems can help reduce energy use by around 25%.1 Solving an issue as soon as possible by repairing or replacing what is necessary can lead to more cost savings and lower total energy use.
1. Cloutier, Deb. (2018). Optimizing Energy Performance: Going Beyond No- and Low-Cost Solutions. Building Owners and Managers Association (BOMA) International. Retrieved June 2, 2022, from https://www.boma.org/BOMA/Research-Resources/News/Sustainability___Energy_Management/Optimizing_Energy_Performance_Going_Beyond_No_and_Low_Cost_Solutions.aspx.
2. Lin Koo, W. & Van Hoy, T. Determining the Economic Value of Preventative Maintenance. Jones Lang LaSalle. Retrieved June 2, 2022, from https://gridium.com/wp-content/uploads/economic-value-of-preventative-maintenance.pdf.