The California Apartment Association and San Francisco Apartment Association are opposing zero-emission water-heater standards for the Bay Area that they say could force costly electrical and structural upgrades when gas units fail.

In an Aug. 13 joint letter, the associations urged the Bay Area Air District to broaden exemptions, delay implementation and study the economic effects.

Under the Air District’s forthcoming rule, covered water heaters manufactured after specified dates could not be sold, purchased or installed unless they produce no nitrogen-oxide emissions. CAA and SFAA say that would make electric heat-pump models the default replacement when covered gas units fail, although working units could remain in service.

The Air District is considering amendments to Rule 9-6 that would delay the standards and add exemptions. CAA and SFAA say the proposed relief does not address the costs and feasibility problems facing existing rental housing.

The rules cover properties within the Air District’s jurisdiction: Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo and Santa Clara counties, southwestern Solano County and southern Sonoma County.

Air District staff have proposed moving the compliance date for smaller residential water heaters — those rated at 75,000 BTU per hour or less — from 2027 to Jan. 1, 2028. For larger systems above 75,000 and up to 2 million BTU per hour, which are commonly used in multifamily buildings, the proposed date is Jan. 1, 2033, two years later than under the current rule.

The proposal would also create exemptions for certain space and electrical constraints, qualifying low-income or housing-cost-burdened property owners and other circumstances. The draft requires an exemption certificate before a noncompliant unit may be installed. CAA and SFAA said the amendments offer only temporary relief for ventilation, ceiling-height and electrical constraints because each exemption would permit just one noncompliant replacement. Any later replacement would have to meet the zero-nitrogen-oxide standard, even if the same building limitations remain.

Replacing a gas water heater with a heat-pump model can require electrical panel upgrades, new wiring, utility coordination, permits and work involving lead-based paint or asbestos, according to the associations’ Aug. 13 letter.

The Air District’s own regulatory analysis estimates that a standard heat-pump water-heater installation would cost about $3,500 more than a gas replacement. Completed Bay Area projects examined by the district ranged from $2,900 to $38,800, with the most expensive cases generally involving space or electrical constraints.

The Air District’s analysis lists federal, state, utility and local rebates available as of March 2026 while cautioning that availability varies with funding cycles and program capacity. The associations’ letter says the costs can extend beyond the appliance and may include electrical upgrades serving an entire building.

Emergency replacements remain a concern

Hot water is a habitability requirement under California law.

Under the draft amendments, a licensed contractor could obtain an exemption certificate and install a noncompliant gas water heater temporarily while a permanent replacement is arranged. The contractor would have to ensure the temporary equipment is removed within 12 months and report the installation to the Air District.

CAA and SFAA want a clear emergency process that permits permanent gas replacements when electrical or structural limitations make an immediate conversion impractical. They also requested broader exemptions for existing multifamily housing where electrification would require substantial infrastructure work.

CAA, SFAA seek new economic analysis

The associations also asked the district to conduct an enhanced socioeconomic analysis of the water-heater rules before adopting the amendments.

The Air District is developing a new policy governing socioeconomic reviews. The proposal calls for closer examination of compliance costs, regional economic effects, impacts on businesses and workers, and less costly regulatory alternatives.

The associations said the district should apply that approach to the pending water-heater amendments and use it to guide additional exemptions and implementation extensions.

CAA also maintains that the zero-emissions requirements are preempted by federal energy law. The association has raised the same legal theory in its challenge to a similar South Coast Air Quality Management District rule.

The Bay Area Air District closed public comments on the draft amendments Aug. 13. Its board is tentatively scheduled to consider the proposal in November.