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The Bay Area Air Quality Management District is on track to accelerate its mandate for Natural Gas Water Heaters and Furnaces Replacement

 WHAT IS COMING?

The Bay Area Air Quality Management District (BAAQMD) board is scheduled to meet on Wednesday, March 15, 2023, starting at 9 am, it will be open for public comment. Written comments deadline:  Tuesday, March 14th, 5 pm.

The link and agenda for this meeting are currently unavailable.  They will be posted here probably 48 to 72 hours before the meeting. (https://www.baaqmd.gov/about-the-air-district/board-of-directors/resolutionsagendasminutes?event=aad81128-2ffe-4cdb-9222-9eb86ac8b16b)  

At this meeting they will be voting on the following accelerated timeline (from the 2030 California Air Resources Board (CARB)) proposal for banning the sale, installation and replacement of all existing natural gas furnaces and water heaters:

1/1/2027 – No natural gas water heaters can be sold or installed in the Bay Area in all new and existing buildings including single family homes

1/1/2029 – No natural gas furnaces can be sold or installed in the Bay Area in all new and existing buildings including single family homes.

1/1/2031 – No natural gas water heaters can be sold or installed in new and existing building large commercial buildings in the Bay Area

Homeowners will be responsible for the cost impacts which could be as high as $60K (or higher).  While some refunds or incentives may be available, they are not currently available to all homeowners, and they will only cover a small fraction of the full cost of gas-to-electric conversion.  Some existing rebates and incentives programs are available to the installers – not the property owner– making it difficult for homeowners to negotiate and choose the best installer.

BACKGROUND

For additional background, on the State & BAAQMD Mandates that will Cost Homeowners more than $20-60K per household please see https://www.familieshomessj.org/blog.  At that site, you will be able to find information on cost estimates from the Santa Clara County Association of Realtor (SCCAOR) and estimates from San Jose City Staff. And see a copy of our past communications on this topic. 

ACTIONS TO TAKE  

You can communicate your concerns to the BAAQMD by emailing them to mhiratzka@baaqmd.gov. Please note the topic and the meeting date in your email. If possible, please send us a copy at FamilesAndHomeSJ@gmail.com. Again, written comments deadline:  Tuesday March 14th, 5PM.

1. Document your concerns to the Bay Area Air Quality Management District asking them not to accelerate the deadlines. Email mhiratzka@baaqmd.gov

2. Inform your neighbors 

3. Suggest your neighbor’s sign-up to receive our newsletters at https://www.familieshomessj.org/ in order to stay informed about this important and expensive issue.

SOME OF THE CONCERNS THAT CAN BE MENTIONED ARE:  

1. Significant Costs to Homeowners
   Up-front Gas-to-electric conversion costs for residential HVAC (heating, ventilation and air conditioning) and water heaters are significant ($20K to $60K or more depending on the scale of project.) 

2. Elapsed Time to Complete Replacement
   Gas-to-electric conversion may also require extensive electrical work. If panel upgrades, service upgrades, trenching, and/or plumbing re-routing are required, the time for replacing could be weeks.  You may have to move out of your home if your furnace or water heater is being replaced.
   
   Furthermore, the Wall Street Journal (WSJ) noted in a 2/28/2023 article that America Is Trying to Electrify. There Aren’t Enough Electricians. The article notes that this shortage of trained electricians will increase costs even further as well as delay projects. This will further increase home ownership costs.     

3. Heat-Pump Water Heaters Cannot Operate in Water Heater Closets
   Heat-pump water heaters require a minimum of 1000 cubic feet (typically a 10 ft x 10 ft room x 10 ft height).  Residences and commercial buildings with water heater closets—very common in older SJ homes with detached garages--do not have adequate space for current heat-pump water heater designs.  Homes and businesses with water heaters currently installed in a water closet will also be greatly impacted. A one-size-fits-all water heater mandate will be impossible for some homeowners to implement without sacrificing 1000 cubic feet of living space, re-piping, or other actions that will increase the cost even further.  

4. Rebate and Incentive Program Are Inadequately Funded
   None of the current rebate programs (that we reviewed) cover more than 10% of the expected up-front conversion cost to homeowners. Most of the programs are income based. Some were already currently closed due to lack of funding. Generally, an incentive or rebate will be considered taxable income.  While additional incentives and rebates may be coming in the future, they will not adequate cover the full costs forcing homeowners to refinance or assume personal loans, if they can qualify. 

5. Grid Reliability
   Grid reliability and electric power supply are not adequately addressed. Several opinion pieces and industry reports document current and coming issues with the US electric grid.  (See: SOS for the US Electric Grid, Can the Power Grid Handle a Wave of New Electric Vehicles?  The U.S. Electric System Is Leaning on Customers to Avoid Blackouts – just a sampling of articles on grid issues.  With unaddressed grid reliability issues and increasing electric power rates, homeowners may find it necessary to install solar and battery systems to address the inevitable electric shortage.  This will further increase home ownership costs.     

New State & City Mandates will 

Cost Homeowners more than $20-60K per household! 

 Mandated Replacement of all Natural Gas Furnaces & Water Heaters in the next few years.

The San José City Staff is studying a “Burn-Out Ordinance” for natural gas furnaces and water heaters for ALL EXISTING commercial and residential properties (including single-family homes, duplexes, and multifamily units) no later than 2030.  

On September 22, 2022, the California Air Resources Board (CARB) proposed a statewide ban on sales of Gas Heaters, Furnaces, and Water Heaters by 2030.  (see: CARB Announces Ban on Sales of Gas Heaters, Furnaces, Water Heaters by 2030 - California Globe).  

Bay Area Air Quality Management District (BAAQMD), which includes San José, is considering a ban on the sale and installation of gas furnaces and water heaters as soon as 2027.

All three of these public entities have significantly under-estimated the up-front cost for gas-to-electric conversion, while simultaneously over-estimating future operating cost savings.

The City Staff’s report to the City Council is expected in Fall 2023.  The Council is expected to provide additional direction to Climate Smart city staff (climatesmart@sanJoséca.gov).  It is expected that a “Burn-Out Ordinance” will be proposed (probably with an implementation date sooner than 2027).  This activity is being driven by the City of San José Climate Smart goals.

WHY ARE WE CONCERNED?

We have received cost estimates for replacing natural gas fueled furnaces and water heaters with electric powered heat-pumps from several reliable sources: the Santa Clara County Association of Realtor (SCCAOR); FHSJ members who obtained quotes from HVAC contractors or actually installed these upgrades.  Based on actual implementation costs and quotes from qualified installers, FHSJ estimate that a single-family home (SFH) cost to convert from gas-to-electric would range from $30K to $60K or more. 

A few of our concerns are listed below – but just a few:   

1. Significant Costs to Homeowners
   Up-front Gas-to-electric conversion costs for residential HVAC (heating, ventilation and air conditioning) and water heaters are significant ($30K to $60K or more depending on the scale of project.) 

2. Elapsed Time to Complete Replacement
   Gas-to-electric conversion may also require extensive electrical work. If panel upgrades, service upgrades, trenching, and/or plumbing re-routing are required, the time for replacing could be weeks.  You may have to move out of your home if your furnace or water heater is being replaced. 

3. Heat-Pump Water Heaters Cannot Operate in Water Heater Closets
   Heat-pump water heaters require a minimum of 1000 cubic feet (typically a 10 ft x 10 ft room x 10 ft height).  Residences and commercial buildings with water heater closets—very common in older SJ homes with detached garages--do not have adequate space for current heat-pump water heater designs.  Homes and businesses with water heaters currently installed in a water closet will also be greatly impacted. A one-size-fits-all water heater mandate will be impossible for some homeowners to implement without sacrificing 1000 cubic feet of living space, re-piping, or other actions that will increase the cost even further.  

4. Rebate and Incentive Program Inadequately Funded
   None of the current rebate programs (that we reviewed) cover more than 10% of the expected up-front conversion cost to homeowners. Most of the programs are income based. Some were already costed due to lack of funding. Generally, an incentive or rebate will be considered taxable income. 

5. Grid Reliability
   Grid and electric power supply were not adequate addressed in the City’s March 2022 study. We have not seen adequate information from PG&E, SJCE, and/or the Climate Smart City Staff regarding grid upgrades and improvements that would be necessary to handle the additional load caused by the conversion of natural gas appliances to electric appliances.
   
   With unaddressed grid reliability issues and increasing electric power rates, homeowners may find it necessary to install solar and battery systems to address the inevitable electric shortage.  This will further increase home ownership costs.     

Several homeowners and/or Board members of FHSJ have met with Climate Smart City Staff expressing our concerns.  Based on these discussions, we are developing a list of recommendations.  In our next communication to you on this topic, we will summarize our recommendations. 

In the short term, we suggest the following:

1. Inform your neighbors 

2. Suggest your neighbor’s sign-up to receive our newsletters at https://www.familieshomessj.org/ in order to stay informed about this important and expensive issue.

Mandatory Natural Gas Elimination in 

All San José Buildings/Homes by 2030 

– Public Input Due by 3/11/2022 –

The City is accepting comments, until 3/11/2022, on its EXISTING BUILDING ELECTRIFICATION PLAN. Per the plan: “Because voluntary action by property owners will not be sufficient to fully electrify San José ’s buildings by the City’s 2030 carbon neutrality goal date, new laws that require electrification for every building sector will be necessary.” (pg. 47)

This means the elimination of all-Natural Gas (NG) appliances including fireplace inserts, ovens, cooktops, furnaces, water heaters, clothes dryers and back-up generators by 2030. 

Per the report: “The total cost of electrifying all residential buildings in San José by 2030 is an estimated $2.7 to $4.7 billion.” (pg. 9) (Of course, this does not address any supply chain issues, inflation, or available labor issues that may increase this number.)

FHSJ analysts calculated the cost (in today’s dollars) to the average homeowner to convert an existing gas furnace to an electric one, convert all other gas appliances to electric, and upgrade their electric panel to be at least $50,000 per home. As currently written, the average homeowner will be responsible for the bulk, if not all, of this cost in the next eight years to comply with the proposed law. Under this proposed City policy, all gas appliances and heaters—including ones in good working order—must be eliminated in all homes by 2030.

Please review the report, presentation and complete the Existing Building Electrification Plan Feedback Form by 3/11/2022.

Contact your Councilmember requesting more public meetings to explain the program and request an increase in the time period for public comment.

Single-Family Residential Zoning in San Jose: 

What are the REAL numbers!

For over a year, the San Jose Planning Department has repeatedly made this alarmist claim about single-family zoning in our city: 

“94% of residential land is designated for single-family houses.” 

These claims were published on the city website and used by city staff in multiple public presentations during the year-long debate over “Opportunity Housing.” The intended inference is that San Jose has no available land to accommodate much-needed housing growth.

Of course, the well-funded special interest groups pushing to eliminate single-family zoning citywide echoed these exaggerated claims, and even made them more extreme!

This “94%” claim was repeated in every forum where single-family zoning was discussed, and these claims were given further legitimacy by the New York Times, Spotlight and other media.

But what is the source for these ‘94%’ claims? Have they been confirmed and verified, or is it a convenient fiction used to promote radical zoning policy changes in San Jose?

The analytics team at Families & Homes SJ (FHSJ) decided to take a deep dive and examine the actual zoning distribution in the city. We utilized the city’s own comprehensive zoning database, which identifies the property size and zoning designation for every parcel in San Jose. The public can access this database here:

https://gisdata-csj.opendata.arcgis.com/datasets/CSJ::zoning-districts/about

The FHSJ analytics team examined every entry in the database—more than 12,000 individual zoning parcels. Each parcel is designated “commercial,” “open space,” “industrial” amongst other unique zoning categories. Residential parcels are designated “residential” (R) or “planned development” (PD) with a “residential” PD sub-code. Parcels that are zoned exclusively for single-family homes are designated R-1.

So, what did we find?

Just 34% of all San Jose land today is zoned for single-family (R-1) homes, not 94%. 

And if we consider R-1 zoned land as a percentage of All residential (including planned development residential), we see that R-1 single-family zoning consumes just 74% of all residential zoned land in the city [60.9 / 81.8].

We call on the planning department to immediately correct the highly misleading claim that 94% of residential land in San Jose is exclusively for single-family homes. This false claim contributed to the acrimonious debate over ‘Opportunity Housing’, creating an emotional and divisive environment for serious housing policy discussion.

Single-family Zoning has now been outlawed in California

As of January 1st  2022, all R-1 properties in the state can now legally accommodate up to 4 housing units without any planning review or public comment from neighbors or city staff. Single-family zoning has been eliminated statewide forever in California by SB9. But this radical change to statewide zoning is very unlikely to offer any relief to working- and middle-class families seeking affordable housing. SB9 contains NO provision for affordable housing, and a comprehensive San Jose planning department analysis proves that SB9 will result in ZERO affordable housing construction in the city.

To overturn SB9 citizens can join the statewide ballot initiative to restore zoning decisions to local government:

https://ourneighborhoodvoices.com/

Our Call to Action for San Jose

Adding a few duplexes every year to existing low-density single-family neighborhoods cannot possibly satisfy the pent-up demand for additional housing in the Bay Area. The only way to achieve a measurable impact on housing availability and cost is by developing large-scale high-density housing projects. 

In 2022 San Jose must redouble its efforts to implement the city’s long-standing high-density Urban Village strategy. The city’s 2040 General Plan projects housing growth 400,000 new residents by fully implementing the Urban Village strategy—an incredible 40% population growth in just 20 years. We call on city leadership and planning staff to re-focus their efforts in 2022 on Urban Villages, and away from divisive, counter-productive and time-consuming efforts to chip away at single-family zoning. We also call on city staff to be a source of fair, honest and verifiable data for all citizens of San Jose.

SB9 Will Devastate San José’s Tree Canopy