The amended Air District rule still requires most replacement water heaters to be zero-emission, but it adds a year and carve-outs that staff estimate could cover about half of the region’s households.
Bay Area homeowners whose gas water heater gives out in the next 14 months can replace it with another gas model. After that, many still can.
The Bay Area Air District’s board voted 16-1 on Nov. 4 to amend Rule 9-6, the 2023 regulation that set a zero-nitrogen-oxide standard for residential water heaters. The amendments push the start date from January 2027 to January 2028 and create exemptions that, by staff estimates, could cover roughly half of households in the nine-county region, according to KQED and CalMatters.
San Francisco Supervisor Shamann Walton voted no after raising affordability concerns, and Benicia Mayor Steve Young abstained, CalMatters reported.
What the rule requires, and what it does not
The standard applies only when an owner replaces a water heater. It does not require anyone to remove a working appliance or stop repairing one, and it does not cover stoves, dryers or fireplaces, the Air District said in its Nov. 4 announcement. In practice, the models that meet the standard are electric heat pumps.
Starting in January 2028, these owners can still install gas:
- Low-income owners, defined as those earning under 80 percent of area median income or enrolled in programs such as Medi-Cal or CalFresh, and owners who spend more than 28 percent of income on mortgage and property taxes. The district estimates about 20 percent of households qualify; owners attest through an online portal.
- Homes without the space or ventilation for a heat pump, and homes with electrical limits such as a panel under 100 amps or a new line longer than 50 feet. These one-time exemptions, which require a contractor’s documentation for electrical limits, cover an estimated 20 percent of installations.
- Owners of units of 30 gallons or less, about 10 percent of sales, and of mobile-home water heaters.
Multifamily buildings, deed-restricted affordable housing and certain large or specialized units have until Jan. 1, 2033. A separate 2023 rule phasing out new gas furnaces, set for 2029, was not part of this vote.
The case for the rule, and its cost
“Water heaters are a significant source of air pollution in the Bay Area, and cleaner alternatives can help people live longer, healthier lives,” said Dr. Philip Fine, the district’s executive officer. The district says pollution from gas water heaters and furnaces causes as many as 85 premature deaths and 15,000 asthma attacks a year in the region. A spokesperson told CalMatters the amended water heater rule alone would prevent up to 16 premature deaths and 21 new asthma cases a year and avoid $90 million in health costs, while acknowledging that the exemptions could put roughly half of the originally projected pollution cuts out of reach.
“The Board raised real questions about cost and implementation in May. Staff did the work, and the rule we adopted today reflects what we heard,” said Lynda Hopkins, the board’s chair.
A heat pump water heater costs about $3,500 more to install than a gas model, district staff estimate. It uses a third to a quarter as much energy, but because electricity often costs more than gas in California, bill savings are smaller. Up to 120,000 Bay Area households replace a water heater each year; a district consultant estimated the amended rule will cost them about $372.8 million a year, after about $60.8 million in energy savings.
Property owner groups remain opposed. Adam Pearce, president of the California Rental Housing Association, told CalMatters the rule “kicks the issue down the road” and would win “a lot more buy-in over time if it was incentive-based.” Joshua Howard of the California Apartment Association said the district “needs to recognize the true cost of the mandate.” Supporters on the board said the changes answered those concerns. “Let’s face it, the exemptions are big enough to drive a truck through,” said John Gioia, a Contra Costa County supervisor.
What groups that help low-income owners say
Rebuilding Together East Bay Network, a nonprofit that repairs and modifies homes for low-income residents and backed zero-emission rules, said the exemptions and the delay should be read together. Taken together, J.W. Frye, the group’s chief executive, wrote in an emailed response to The Inquirer, they protected low-income families and those with space and energy constraints “the ability to opt out of these requirements,” and “gave the time for additional outreach and education to ensure that families understood the requirements.”
He described the households the group serves as squeezed already. “The folks that we serve are cost pressured between paying their essential bills around food, transportation, and housing and often we find low-income households not having the resources to replace hot water heaters at all and just go without hot water in the home when their appliances go out,” he wrote, adding that this was “nothing to say of the roughly $3,500 in additional costs.” The group plans to work with local block grant programs, utilities and the district’s BayREPAIR program to use the rule’s exemption process “to help identify low-income homeowners (those who would be exempted) and pipeline them into these funded programs for electrification and heat-pump technologies.”
1-888-Heat-Pumps, an Emeryville installer that the nonprofit copied on its reply, called the amendments “the most important step forward towards Healthier Homes and a Healthier Planet in more than a decade in the Bay Area,” in a response that Owen, of the company, said he had written. It noted that the rule exempts low-income owners and that “if they want a Heat Pump Water Heater, the price is generally twice that of a Gas Water Heater.”
Incentives may narrow that gap. The Bay Area is expected to receive about $55 million a year in heat pump incentive funds over the next few years, according to estimates from SPUR, the urban policy group.
The Air District’s communications office did not respond to The Inquirer’s questions on Monday. Owners can find the compliance timeline, exemption categories and rebates on the district’s Building Appliances web page.
Desmond Akers covers the cities and counties of the greater Bay Area, from Oakland and San Jose to the Peninsula, the North Bay and the East Bay suburbs, for Around the Region. More from Desmond Akers
