Electrification Mandate – Santa Clara County Association of REALTORS®

Overview

There is a regional government body called the Bay Area Air Quality Management District (BAAQMD) that can pass laws for the 9-county Bay Area. In March of 2023, this agency banned gas water heaters and furnaces. There are 2.5 million residences in the 9-county Bay Area. The vast majority of homes will need some renovation to make them suitable for all-electric major appliances. While the cost of replacing a home’s gas major appliances with electric can cost

$10,000 or more, the cost of renovating a home to be able to accommodate the increased electrical demand can cost substantially more – $50,000 to $250,000. The construction costs dramatically exceed the cost of the electric appliances.

Even if every homeowner had the $50,000 to $250,000 necessary to renovate their home to make it all-electric, there are not enough contractors to electrify the approximately 2 million residences that need to be updated in the 9-county Bay Area.

The Law

Starting on January 1, 2027 (less than 2 years from now), it will be illegal to purchase or install a gas water heater in the 9-County Bay Area. Starting on January 1, 2029, it will be illegal to purchase or install a gas furnace.

Scenario

On January 5, 2027, an elderly couple on a ﬁxed income notices that they have no hot water because their water heater is broken. The ban on gas water heaters went into effect 5 days earlier. They call a plumber to replace their water heater – they are informed that the law now prohibits replacing their gas water heater, and they must switch to electric. They call their REALTOR® to get a referral for a contractor who can do the renovation. The contractor is overwhelmed with people facing the same situation and is unable to get to their job for at least 6 months (and another 6 months for permitting and PG&E). Meanwhile, he is able to give them a quote – since they live in a 1950s home in the Willow Glen neighborhood of San Jose, they will need extensive work to be done to convert their home to all-electric. Due to the electriﬁcation mandate, work that would have cost $50,000 just a few years earlier costs nearly twice as much – their quote is $96,500.

About the BAAQMD

The BAAQMD has a 24-member Board of Directors composed of elected officials from Bay Area cities and counties. Counties included in the 9-County Bay Area: Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, and Sonoma.