The California Apartment Association, along with a coalition of housing providers, business organizations, and workers, has filed a lawsuit against the South Coast Air Quality Management District, challenging a new rule that effectively bans certain gas appliances in favor of electric alternatives.
The coalition argues that the district’s so-called zero-NOx rule will impose significant costs on rental property owners and drive up expenses for renters. The lawsuit, Rinnai America Corp. v. South Coast Air Quality Management District, was filed in the U.S. District Court for the Central District of California.
The lawsuit contends that the rule, which seeks to eliminate nitrogen oxide emissions by mandating electric appliances, will burden housing providers with substantial retrofitting and maintenance costs. The South Coast Air Quality Management District, which oversees air quality in the South Coast Air Basin, including all of Orange County and urban areas of Los Angeles, Riverside, and San Bernardino counties, approved the rule earlier this year. Tom Bannon, chief executive officer of CAA, said the regulation particularly harms smaller, independent housing providers.
“The South Coast Air Quality Management District’s zero-NOx rule places an especially heavy burden on mom-and-pop housing providers, who are being forced to invest thousands of dollars and countless hours just to comply with yet another costly mandate,” Bannon said. “These providers already face extensive regulations, and this new requirement makes it even more difficult and costly to provide housing. We are deeply concerned that this rule will push some of these small housing providers out of the market altogether, reducing the supply of rental housing at a time when California can least afford it.”
The coalition also argues that the rule disproportionately affects affordable housing providers, making it harder to keep rents reasonable while discouraging investment in new rental housing.
Broader trend of gas appliance restrictions
The lawsuit comes amid a growing trend in California to phase out natural gas in buildings. Berkeley in 2019 became the first city in the nation to prohibit gas infrastructure in new buildings, a policy that inspired similar mandates across the state. However, these efforts have faced significant legal challenges.
Earlier this year, the U.S. Court of Appeals for the Ninth Circuit struck down Berkeley’s gas ban, ruling it conflicted with the federal Energy Policy and Conservation Act. The court found that local ordinances restricting natural gas appliances were preempted by federal law. According to reporting by the Columbia Law School blog on climate change, this ruling has influenced other jurisdictions, including Sonoma County, which paused enforcement of its all-electric building code after the court’s decision.
Implications for housing providers
Housing providers say mandates like the South Coast Air Quality Management District’s zero-NOx rule further complicate operations in an already challenging regulatory environment. Retrofitting properties to comply with such rules often requires expensive upgrades, including replacing gas appliances, rewiring properties, and upgrading electrical panels. These costs, according to CAA and other critics, could reduce housing supply and make affordability even more elusive.
“The Ninth Circuit has already struck down similar policies, and we are confident the court will once again protect housing accessibility in this case,” Bannon said.
Diverse coalition opposes rule
The California Apartment Association is joined in the lawsuit by organizations representing various industries, including the California Restaurant Association, the California Pipe Trades Council, and the California Hotel and Lodging Association. Manufacturers such as Rinnai America Corporation and Noritz America Corporation are also part of the coalition, underscoring the wide-ranging opposition to the zero-NOx rule.
The lawsuit claims the district’s rule not only conflicts with federal energy laws but also runs counter to the court’s recent decision on Berkeley’s natural gas ban. The law firm of Reichman, Jorgensen, Lehman & Feldberg, which also brought the successful challenge in Berkeley, is representing the California Apartment Association and several other coalition members in the lawsuit.
