03/10/2025
Wow, more regulations…….
THE MANDATE
On March 15, 2023, a regional government body called the Bay Area Air Quality Management District (BAAQMD) adopted amendments to their “Rules” that carry the weight of law - “Regulation 9, Rules 4 & 6”, banning the sale or installation of gas water heaters on January 1, 2027, and gas furnaces on January 1, 2029.
THE PROBLEM
Few people (including those in government) recognize that in order to switch from gas appliances to electric appliances, the vast majority of homes must undergo expensive electrification renovations that could cost anywhere from $50,000 to $250,000, or more. These renovations enable the home to handle the “electrical load” required by new electric appliances. The cost of the electrical appliances, themselves, is only a drop in the bucket compared to the extremely high cost of the conversion renovations. The older the home, the more expensive the cost to electrify the home. Homes built in the 70s or 80s can easily cost $100,000+ to electrify.
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.
CURRENT REPLACEMENT COSTS
The estimated cost to replace both gas furnaces and water heaters with electric systems can range from $7,000 to $15,000. Costs can vary based on the size of the home, the type of electric appliances chosen, and regional labor rates. It is advisable to review your home and act early before the cost goes up in due time!
Here are the 9-county Bay Area Counties:
ALAMEDA, CONTRA COSTA, MARIN, NAPA, SAN
FRANCISCO, SAN MATEO, SANTA CLARA, SOLANO, and SONOMA.
Note: This change is crucial for everyone involved in the real estate community to understand, as it could potentially affect both the title and escrow processes. Please make sure to inform your clients and partners about this new law and consider how it may affect your transactions in 2027 & beyond. Keeping everyone in the loop will help ensure a smooth closing. Source: https://www.sccaor.com/electrification/
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Salinas, CA 93901
The Santa Clara County Association of REALTORS® (SCCAOR) exists to meet the business, professional and political needs of its members and to promote and protect private property rights.
